Dimitri Meets Brazil

Shopping & Souvenirs

Thu, 13 Oct 2011 10:52:51 -0400

So here’s the insider info on shopping in Sao Paulo:

This city offers a pretty extensive and dynamic array of choices when it comes to shopping, from high end boutique stores to small, local craft shops. If you are looking for the high end shopping destinations, Avenida Paulista has some very expensive retailers. Near the avenue is the Jardins area, very well known for its high end boutiques and very impressive, delicious restaurants. Rua Augusta and Rua Haddock Lobo are very popular shopping streets, filled with a number of international brands catered to expensive clothing, jewelry, and gifts. In downtown Sao Pualo, there is a local market selling lavish, handcrafted items such as purses, belts, etc.

Me standing outside of Shopping Paulista, near Avenida Paulista

There are a number of shopping malls that includes many boutique shops and gourmet dining. Some of the malls I recommend are Shopping Paulista, Shopping Ibirapueara, Shopping Morumbi, and Shopping Patio Higienopolis. Stores are shopping malls include clothing, shoes, accessories, jewelry, bookstores, electronics, cell phones, and pet stores. Also many nice restaurants and cafes are located inside.

If you’re looking for something specific, there are certain streets dedicated to a certain industry. One I’m familiar with is Rua 25 de Marco, which is a huge commerce hub, especially for electronics. This street has probably the most lowest prices relatively in comparison to other parts of Sao Paulo, selling computers, TV’s, iPods, calculators, watches, etc. However, it’s also flooded with mock products and illegal imitations, so buy with caution.

If you’re looking for an Asian market, go over to the Liberdade district, a heavily Japanese-dominated neighborhood, boasts as a popular destination for Asian influenced trinkets and goods. On Sunday, there is a fair that goes on where Asian-influenced cuisine can be tasted and many artisans set up hundreds of booths selling handcrafted items.

Another fair to be considered would be the one located at Praca da Republica, it has one of the best handcrafted textiles from local artisans, and also original artworks from local painters and artists.

What should you bring back as souvenirs? That’s seriously up to you, but I’d suggest you include a pair of Havaianas flip-flops, they’re so comfortable and you’ll have more choices in design for a cheaper price here in Brazil than anywhere else in the world.

Enjoy!

Pros & Cons of Outsourcing to Brazil

Tue, 11 Oct 2011 10:15:06 -0400

Pros & Cons of Outsourcing to Brazil:

Came across this article, it’s really focused on the IT industry but after reading through it, you could definitely apply it to other business areas. It offers great insight on the business culture.

What Makes Brazil An Attractive Outsource Hub?

Mon, 10 Oct 2011 10:23:00 -0400

In one of my previous posts, I mentioned how Brazil is an economy that was high in resources and manufacturing. Another aspect about Brazil is that over the past decade, its universities has been churning out quality professionals in science and technology. With 8 out of 10 of the country’s top science and engineering schools located in Rio de Janeiro, producing 14,000 Ph.D graduates a year, Brazil is becoming an attractive outsource destination due to a rising expertise in BPO and call centers, scientific/technological business parks, and the backing of a national government providing support for financing and R&D credits.

Well that’s pretty much the same picture as in India and China, two countries enjoying the global outsourcing pie…..and Brazil wants a slice of that! But how does the land known for golden sands and lush green forests attract investors?

Consider this though:

It takes a whole full day and night just to reach India or China, factor in the jet lag and find yourself terribly exhausted and very unproductive. Not to mention another 24 hours just to fly back to the States.
You’re probably stuck in a place where the sun can’t cut through the pollution.
Even if you’re not traveling, you’ll have to stay up late at night to communicate with your teams in India or China.
Have fun dealing with the immense cultural differences both in the management practices and pop culture in India and China, that can put a dent on communication.

Benefits of outsourcing in Brazil:

Just like India and China: established IT services firms, a highly educated workforce, lots of engineering graduates, and tax & financial incentives.
Major cities such as Rio de Janeiro and Sao Paulo are within 1-4 hours of the same time zone as US companies, say goodbye to jet lags and the late night sessions.
Brazilians have a very good understanding of US culture and similar business culture, which means better collaboration.
A gorgeous country to visit!

Me standing outside of Catedral de Se

Brazilian Football

Sat, 08 Oct 2011 10:06:00 -0400

Source: Google Images

Football (or soccer as we Americans call it) is one of the most exciting aspects of Brazilian culture, being immersed in the game is an exhilarating feeling. From the city streets to the game on television, football is always a good topic anytime anywhere. However, with over 400 clubs in the country, the Brazilian football league system can be quite confusing to grasp. After being lectured by my fellow co-workers, here’s the gist on understanding how the system works:

Source: Google Images

The Brazilian Football Confederation (in Portuguese, Confederação Brasileira de Futebol or CBF) is the governing body of football in Brazil. It administers the Brazil national football team, both men’s and women’s. It organizes the Copa do Brasil, the national championship, played by 64 teams representing all 26 Brazilian states and the Federal District, from February to June.

In global competitions, Brazil has received the following honors:

World Cup: 5 times (1958, 1962, 1970, 1994, and 2002)

Copa America, the South American Championship: 8 times (1919, 1922, 1949, 1989, 1997, 1999, 2004, and 2007)

Confederations Cup: 3 times (1997, 2005, 2009)

Source: Google Images

Now the system in which Brazilian football is organized consists of a series of interconnected leagues, falling under two pyramids, State and National. State and national pyramids are independent of each other but clubs compete in both in the same year. Both pyramids consist of different hierarchical levels. State pyramids are regulated by each respective state’s football federation, with their own schedule, own regulations, and own rules. For example, I’m currently in the state of Sao Paulo, Campeonato Paulista is the professional league which consists of 20 clubs, has its own rules and rankings. The 4 most popular and strongest teams are Corinthians, Palmeiras, Sao Paulo, and Santos.

The national pyramid is regulated by the CBF through it’s own national ranking system. The best placed teams in the state championships as well as the best ranked clubs in CBF’s ranking system compete in the Copa do Brasil. Played from May through December, with Copa do Brasil contested between February to June through a 64-team knockout tournament, kind of like March Madness.

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Now here’s how the National pyramid works:

There are 4 leagues, teams compete only within their respective leagues:

Série A (the top 20 clubs)

Série B (20 clubs)

Série C (20 clubs)

Série D (40 clubs)

At the end of each year, the 4 worst performing clubs in each league gets demoted to a lower level, while the 4 best performing clubs get promoted for Série A, B, C, and D. Meaning, the 4 worst in Série A falls into Série B the next year; and the 4 best in Série B move up to Série A the next year. So it is possible to rise and fall in the ranking system. For a club not good enough for any of the Séries, they would have to win their respective state championship to qualify for Série D, and later work their way up to Série C and so on. The most recent club to do this rose to Série A in such a manner was Ipatinga in 2008, but later got relegated to Série B in 2010, and Série C this year.

As you can see, the national pyramid is a highly contested system, which would explain why Brazilian football and their players are so highly regarded as one of the world’s best.

Watch out for the World Cup 2014!

Source: Google Images

3 Tips Americans Should Know Before Doing Business In Brazil

Fri, 07 Oct 2011 10:12:00 -0400

Alright, haven’t posted for awhile. Been working and crazy busy. But after a few business dinners, chatting about random stuff, football being the most popular subject, I’ve noticed 3 things I want to share about conducting business in Brazil, or at least in Sao Paulo.

1. It’s the Brazil Way, not the American Way!

We all know Brazil is an emerging country, however business leaders here get the attitude from Americans that they can come into town, set up shop, and do things as they go. In reality, this doesn’t work out. You really have to spend time to truly grasp the business models, ethics, and practices that are already in existence in Brazil. And it is in many ways different than back home in the US.

2. Develop relationships!

Brazilians want to get to know you as a person before they consider doing business. Why? Simple, they want to know who they’re working with. Imagine getting married to someone you just met, you have no idea who they are, and now you’re stuck with them. Success really depends on your ability to develop and sustain relationships with your business partners; and these relationships carry beyond the office. Brazilians are very social, once Friday comes around, instead of going home and most likely getting stuck in traffic, feel free to go straight to a bar to relax and catch chat with your co-workers or business partners. This is a great way to build trust and meaningful collaboration.

3. The emerging C-class!

Brazil is an extremely diverse nation. But the social structure in Brazil is much different than the US, people are mostly categorized into 5 different economic classes: A, B, C, D, and E (the A-Class being the wealthiest and the E-Class being the poorest). The middle C-class is the primary reason for Brazil’s emerging economic growth. This large part of the population is now emerging as a large demographic purchasing power. Affecting many areas of Brazil’s economy, in industries such as retail, banking, housing, and the increase of small/medium businesses.

Just tips on what I learned on doing business here!

Brazil and other BRIC Nations stepping up to Financial Crisis

Tue, 20 Sep 2011 19:08:00 -0400

Brazil and other BRIC Nations stepping up to Financial Crisis:

I haven’t posted for such a long time, been so busy over here but I had a debate with my friend back in the States on how Brazil is going to be a global player. He disagrees but I believe this article pretty much proves my point. Brazil is going to allocate $350 billion dollars in foreign reserves for the Eurozone financial crisis, enough said!

Brazilian Manners

Fri, 09 Sep 2011 16:31:52 -0400

It’s been a week since I’ve set foot in Sao Paulo and I want to point the surprisingly pleasant manners that Brazilians have. First off, greetings such as hellos, goodbyes, and good afternoon (Oi, Tchau, and Boa Tarde respectively) are very commonly heard, even among complete strangers. For example, at my apartment complex, every time I step into an elevator with someone already inside, they will say Oi to me and Tchau during departure. I once had a short random conversation with someone about the Sao Paulo Corinthians and Rio de Janeiro’s Flamengos soccer match yesterday in the elevator, later found out from my cousin that it’s pretty normal for strangers to strike up random conversations. Now I understand why Brazilians are referred to as very warm and friendly people. Much different than the US, I wouldn’t say we Americans are cold cause I think we’re pretty polite, but it’s definitely a small cultural difference.

When being introduced to other people, there’s always a smile and a greeting. In male to female interactions, there would often be a simple kiss on the cheek, something I was caught completely off guard. But don’t get carried away thinking that they have a crush on you, a kiss on the cheek is very common in these types of situations.

“Licenca” (the shortened form of “Com licenca” for Excuse me) is very commonly heard among everyone in any situation. It’s very common to hear someone saying licenca during crowded areas such as the subway. Back in the US, at least in my opinion, people are polite but in places such as the airport, subway, metro buses, and anywhere with claustrophobic conditions for that matter, you’re lucky if someone even bothers to say excuse me after you’re pushed out of the way.

So these are just some of the minor differences in everyday manners that I’ve experienced. Remember to greet people or you’ll come off as a rude individual.

Rio or Sao Paulo for Business?

Mon, 05 Sep 2011 23:07:00 -0400

Rio or Sao Paulo for Business?:

This article has some interesting points. Since I’m currently in Sao Paulo and to be honest, it really depends on what type of business you’re in. If you are pursuing something within the financial industry, then Sao Paulo is where you need to be. Paulista Avenue is a huge financial hub. But as the article mentions, Rio’s is for you if you’re interested in tourism, energy, infrastructure, and creative industries like fashion or film. So take your pick!

In the US, we’re associate graffiti more with vandalism...

Sun, 04 Sep 2011 01:36:00 -0400

In the US, we’re associate graffiti more with vandalism rather than another form of cultural expression. Graffiti in Sao Paulo, Brasil where I took some of these photos is more like urban art. Since most of us are more familiar with the large-letter tags, although there is a lot in Sao Paulo but graffiti art here is much more prevalent; where abstract, surreal, psychedelic, and geometric paintings colorfully co-exist. You only need to drive a few blocks and you’ll encounter its thriving graffiti culture. It really gives off a creative vibe around the city, Sao Paulo is definitely its own dynamic melting pot of Latin America. Since traffic jams are common and really frustrating, it’s nice to look out your window and see a nice piece of urban mural.

Brazil May Be The Country Of The Future

Tue, 30 Aug 2011 13:48:59 -0400

Brazil May Be The Country Of The Future:

Dr. Mary Gershwin wrote a great article on how we shouldn’t ignore Brazil as a strong economic contender. Brazil is already a leader in Latin America and may well be a global leader in the next 10-20 years.

"One’s destination is never a place, but a new way of seeing things."

Sat, 27 Aug 2011 10:00:05 -0400

“One’s destination is never a place, but a new way of seeing things.”

-
Henry Miller

Retail Details

Mon, 15 Aug 2011 16:12:00 -0400

Last Tuesday, Aug. 9th, a local Brazilian financial newspaper reported Wal-Mart Stores, Inc (NYSE: WMT) is in talks to acquire the Brazilian unit of French retailer Carrefour (CA.FR). Now the details of the deal, such as the price of acquisition, haven’t been provided yet, but sources say Wal-Mart has brought in UBS (NYSE: UBS) for the talks.

Now what does this really mean? Brazil is currently the 7th largest consumer market. Now factor in the rapid rise of the Brazilian middle class, declining inflation rate, the ease to extend credit (20% annual growth), job growth (6.2% unemployment rate), and the growing demand of non-durable consumer goods (consumer confidence of 5.4%), there is a huge growth of sales within the retail sector. Among the wide variety of stores, electronics, pet shops, and even e-retailing, supermarkets account for the majority of the Brazilian retail industry. According to Bloomberg.com, Brazil now leads the top global markets for retail expansion. So for foreign investors, this opens a door full of opportunities.

Currently, Wal-Mart holds the 3rd largest retailer in Brazil, following Carrefour in second and market leader Grupo Pão de Acucar.

Wal-Mart’s Brazilian Profile:

Penetrated Brazilian market in 1995
Total Retail Units as of June 30, 2011: 484
Wal-Mart Supercenter and Sam’s Club (74 stores)
Todo Dia, a neighborhood-friendly store for Brazilians, a strategy called small box retailing (133 stores)
Bompreco, an acquired Brazilian unit from Ahold, a Dutch retailer back in March 2004 (99 stores)
Sonae, an acquired Brazilian unit from Sonae, a Portuguese retailer back in December 2005 (178 stores)

As you can see, Wal-Mart is increasing its Brazilian market share through building up their successful strategy of small box retailing and various acquisitions. Carrefour had more than 500 stores at the end of 2010. If Wal-Mart were to acquire Carrefour’s Brazilian unit, it would become the largest and leading retailer in Brazil.

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Sources:

http://investinbrazil.biz/industry/retail-market/retail-market-industry-brazil

http://www.marketwatch.com/story/wal-mart-in-talks-to-buy-carrefour-brazil-unit-2011-08-09

http://www.bloomberg.com/news/2011-08-11/brazilian-june-retail-sales-rose-0-2-from-month-earlier.html

http://walmartstores.com/AboutUs/259.aspx?p=246

http://walmarthelp.com/wal-mart-is-said-to-explore-bid-for-carrefour’s-brazilian-retail-business-bloomberg/

Updated: Aug. 19, 2011

CIA World Factbook

Fri, 12 Aug 2011 13:52:00 -0400

CIA World Factbook:

Awesome resource if you want a concise and general overview of Brazil rather than Googling through amounts of data and facts. Wikipedia works but it takes time to read through all that literature. CIA World Factbook has updated information on pretty much any country, as well as a wealth of facts and figures.

3rd Largest PC Market

Tue, 09 Aug 2011 15:15:00 -0400

With reports of the PC market underperforming due to over-saturation and intense competition, many firms are considering looking elsewhere to boost revenues and profits. And that place is Brazil, now considered as the 3rd Largest PC Market in the world, following the US (#1) and China (#2). Investors and financial analysts are concerned about the slowing market for PCs, putting some blame on Apple’s iPad and other factors. However, in July, Intel (NAS: INTC) released their earnings report with better-than-expected results and outlook.

CEO Paul Otellini describes that Intel has this “channel revenue” where their channel sales grew by 17%, that helped the company’s PC division grow by 11% during the quarter because demand for PCs remain healthy in developing countries such as Brazil. Latin America as a whole has seen a 12% growth in the PC market. The way channel revenue works is through indirect sales channels to smaller companies that make PCs with lesser-known brands geared toward specific markets.

The rise of the PC market in Brazil can give credit to Positivo Informática (BM&F Bovespa: POSI3), a homegrown brand that nobody has heard of outside of Latin America. But in department stores where the Brazilian middle class do their shopping, Positivo has the largest share of the retail market (29.9% as of 2009), and sells more computers (16.1% of total PC sales) than the next three players combined.

With a growing middle class, there are a lot of families looking to buy their first computer. To gain an understanding of the PC market, unlike the United States, where a family may have multiple desktops/laptops, one for Dad, Mom, Junior, and little Mary, the PC is shared by the entire Brazilian household, rather than it being a personal device.

Positivo is 10th largest computer manufacturer in the world. But why hasn’t other manufacturers such as Dell and HP been able to imitate the same success as the largest manufacturer in Latin America? A factor to consider stems from the Brazilian government enacting policies creating a favorable environment for Brazilian companies. Positivo enjoys a tax structure that only requires them to pay 2.75% while foreign PC manufacturers pay an average of 43% in taxes. This is a significant competitive advantage and one where Positivo expects the Brazilian government maintaining in the future.

The cheapest of Positivo’s desktops are easily affordable through financing of 50 Reals, or $30 Dollars a month. To illustrate who are buying up PCs, construction workers and those who clean houses can buy a computer for their family. As you can see, the bulk of the PC market remains with the growing middle class.

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Sources:

http://allthingsd.com/20110720/intel-ceo-were-big-in-brazil-and-lots-of-other-places/

http://news.cnet.com/8301-13860_3-9920786-56.html

Updated: Aug. 9, 2011

What is BRIC?

Tue, 09 Aug 2011 13:08:00 -0400

No, it’s not a typo for construction-building materials…that would be brick.

BRIC is an acronym for the economies of Brazil, Russia, India, and China. According to Investopedia.com, Goldman Sachs first used the term BRIC in a report from 2003, stating that these four emerging countries will have wealthier economies than most of the current major economic powers by 2050.

When using the term BRIC, please be aware of that BRIC is used as a collective description to describe the four economies, not each individual nation. China’s economy is manufactured-based and India has moved up the economic ladder to be more of a services/IT-based economy. While both Brazil and Russia are dominant as suppliers of natural resources and raw materials. I believe nowadays, when businesses refer to BRIC, it’s now used as a more generic marketing term, especially discussing foreign expansion opportunities.