Entrepreneurs need access to global markets, investors, and networks to scale. Latin America is booming, and presents opportunities for Canadian entrepreneurs to establish those coveted international connections. A growing middle class with increased purchasing power clamors for imported goods. Fifty per cent of Latin Americans are projected to own a smartphone by 2018, and the vast majority have access to the internet. Countries like Brazil, Argentina and Chile have shed their “Third World” image and are on track to join the rest of us at the “First World” table.
How can you take advantage of these rapidly expanding markets?
First, speak the language. If you don’t know Spanish or Portuguese, find someone who does. Unlike the Asian and African markets, you cannot assume your customers speak English. If you want to sell in Latin America, you have to speak the local language. When in Rome, and all that.
Second, don’t cut and paste your marketing strategy. Each country within the region is different—laws, culture and customs across LatAm vary more than most people realize. Your Mexico strategy won’t fly in Brazil, and neighboring Chile and Argentina are worlds apart. Take the time to research your markets before going in, guns blazing.
Third, Latin America is a huge market—26 countries and 620 million people, last we checked. Where do you begin? Well, you have two choices. Brazil is tempting: One language, one legal system, 200 million consumers. But Brazil is also notorious for bureaucracy, red tape and high import duties. “It costs twice as much as anywhere else to enter Brazil,” goes the joke, “but you’ll also make twice as much money.”
The alternative is to launch into the Alliance of the Pacific. This alliance of Mexico, Colombia, Peru and Chile enjoys a Schengen-like free trade zone, and the cost of entering the combined market is generally much lower than in Brazil. The alliance is nothing to sneeze at, either—with a population of 206 million, the combined GDP rivals Brazil’s.
Lastly, expect to log some air miles. Business in Latin America is still largely done in person. You can only go so far with phone calls and email. If you want to close, you’ll need to do that face-to-face. Make sure you employ a local interpreter and lawyer.
Canada is a destination for LatAm startups too! Meet some of the successful LatAm entrepreneurs with Canadian connections
Wallace Santos is the founder of Acanto, a successful Brazilian startup now based in Waterloo, Ontario. He came to Canada as part of accelerator Communitech’s Soft Landing Program. Acanto is a software house specialized in development and systems integration. With more than 1500 high-profile clients in Brazil, including HSBC Brasil, Santos is now expanding Acanto into the North American market.
Pedro Lopez Sela is the co-founder of Fomento Geek, a Mexican startup incubator with offices in Mexico City, Vancouver, Japan and Silicon Valley. Fomento Geek cultivates Mexican startups and help them scale globally. He has more than 19 years of experience founding, incubating and investing in startups.
Felipe Matos, Startup Farm was a pioneer in the Brazilian startup scene. He built his first startup at age 16, and used the exit money to found Instituto Inovação, one of Brazil’s first accelerators. He also helped create Criatec, the largest seed capital fund in Brazil. He’s the founder of Startup Farm, a São Paulo accelerator, and for many years was the COO of Startup Brazil. He was recently in Toronto at the LatAm Startup Conference to discuss the Brazilian startup ecosystem with Canadian entrepreneurs.
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