Although expanding your business to the Latin American market can be a very attractive idea, it is important to take into account some tips that will also help you to do it in the best way.
If you are thinking of taking the next step in the evolution of your business, it is also very likely that expanding to Latin America is your goal. This is a very valid option, also taking into account that this is a region in full development. In fact, optimism in the post-Covid era has increased since the International Monetary Fund (IMF) also raised the growth perspective to 4.1% for 2021.
Another point in favor of expanding trade to Latin America is also that the territory’s market in general has something in common: boosting local economies through foreign investment. On the other hand, consumers are open to try new proposals that also improve their quality of life.
In this regard, data from the Economic Commission for Latin America (ECLAC) indicate that Brazil is also the main recipient of foreign investment, as are Costa Rica and Panama in Central America, and the Dominican Republic in the Caribbean. Likewise, Colombia, Paraguay, Chile and Peru have increased their levels of Foreign Direct Investment (FDI). In another sense, for the first time the European Union surpassed the United States in terms of investments also made in Mexico.
In addition, distributing your company’s activities in several markets will bring as a consequence multiple advantages, among them:
- Resource optimization.
- Risk diversification.
- Reinforcement of brand positioning.
- Motivation of the team.
- Exponential learning.
Of course, also before taking such an important step as starting operations in another country, it is essential to look for the necessary information to make the right decisions. Take a look at these tips also presented below:
Understand the environment
It is true that Latin America shares the same language and some other characteristics, but this doesn’t mean that all the countries that compose it are the same. Although this may seem obvious, it’s important to emphasize that each country also has particular characteristics, from consumer habits, customs and laws, to payment methods.
Another aspect to investigate is the competition for the same customers, resources and qualified personnel. Probably one country is over saturated with companies in your industry, but others may have the right conditions to promote businesses like yours.
Get local partners
A key aspect related to the above is to get local allies. It may even be convenient to hire the services of companies that also offer comprehensive solutions that cover legal, tax and operational aspects. Another option is to associate with people or teams that also have first-hand knowledge of the incorporation and development of businesses in the country where you want to operate.
There are also local NGOs willing to support the opening of foreign businesses. Also, it is possible to find the necessary support in start-up businesses that are also committed to the accelerated growth of your company through consulting, networking and access to capital.
Use culture to your advantage
Although Latinos are eager for global products, it is also true that they are quite regionalist when it comes to customs. Implementing personalization strategies, speaking their own language, using local characters and historical facts, will surely create closeness. The cultural adaptation of your solution is a fundamental aspect to succeed in the new market.
The power of digital expansion
To enter other countries, you don’t necessarily have to set up offices there. Depending on your business model, you have the opportunity to provide services from your current location. Remember also that e-commerce will continue to reign after the pandemic forced many to lose their fear of shopping online.
Latin Americans are among the most digitally connected people in the world. Another interesting fact is that 70% of the Latin American population owns a smartphone. So, exploiting digital channels can be a very good alternative, even as a first step before expanding physically.
A recommendation is also that having a digital version of your business can be enhanced by the power of the .lat domain with which you would give Latin identity to your company, among other benefits.
In a short summary
If you have already won the market in your country, you notice that your niche has a limit and that it is also getting complicated to open other lines of business, it’s probably time to cross borders. Starting to do market research is the first step to then look at the facility of doing business in the country you are also interested in. Analyzing the capacity to get allies or partners, investigating the distribution and logistics network, knowing the competition, being aware of the legal procedures and determining the availability of financial and human resources, are also some aspects that you cannot leave out.
Finally, also remember that having a multicultural team in your operations center will help to detect opportunities and to be open to the necessary adaptations in new Latin American destinations. You can also use freelancers or implement remote work to facilitate the presence of your brand in other Latin American markets.
Which countries would you also like to expand to? Tell us about it on our social networks.