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HOME REGIONS Latin America › Building channels in Argentina and Brazil

Building channels in Argentina and Brazil

by Stuart Wilson, Wednesday 12 September 2012

DISTREE Latin America 2012 today offered vendors a unique opportunity to get up to speed on channel dynamics in Argentina and Brazil. Chanel Academy workshop sessions offered delegates access to the latest market data and a deeper understanding of important issues such as local tax systems and import regulations. The Argentina session was hosted by national channel association CADMI PyA, with the Brazil session moderated by national distributor association ABRADISTI.

Daniel Gutierrez, president at CADMI PyA, outlined the complexities of doing business in Argentina. With specific reference to the channel structure and expenses incurred by manufacturers looking to import products into Argentina, Gutierrez explored the difference between engaging with a local distributor and attempting to sell direct to a large in-country retailer.

“Wholesalers are very important in distribution due to the local regulations,” stated Gutierrez. “In fact they are the key to importing products because only a few retailers have the ability to do that by themselves.”

“Local manufacturing is becoming important, many products are affected by regulations and local taxes that complicate imports to a level where you can´t compete if you are not a local player,” he added. “This is particularly true for notebooks, mobiles, cameras, MP3 players, monitors, TVs and consumer electronic appliances.”

While the regulations in place appear to act as a barrier, Gutierrez argued that they were also an opportunity for vendors. After all, those that were prepared to overcome them and build a serious business within Argentina could develop a competitive market advantage compared to rivals not prepared to deal with the challenges.

Brazilian potential

Vladimir Franca, executive director at ABRADISTI, highlighted the huge growth potential that still exists in the Brazilian market. With a population of 190 million, Brazil is already the world’s fifth largest IT market, according to ABRADISTI.

Internet penetration is climbing steadily in Brazil and sales of mobiles and smartphones continue to climb year-on-year. ABRADISTI estimates that the Brazilian hardware sector was worth US$22 billion in 2011. Grey product remains an issue in Brazil as the government works to encourage local production and discourage the import of finished goods.

ABRADISTI urged manufacturers to carefully analyse the dynamics of the national market particularly in terms of the final cost of the product. For those working in a competitive product segment, local assembly is seen as the right choice at present.

Brazil offers a strong economy, solid GDP growth and an increasing base of consumers ready to spend on ICT and consumer electronics (CE) products. To effectively tap into this opportunity, vendors need to understand the complex tax regulations across 27 states and also contend with logistics issues in terms of covering such a vast country.

DISTREE Latin America

The 2nd annual DISTREE Latin America takes place on September 11-13th 2012 in Buenos Aires, Argentina. DISTREE Events expanded into the Latin American market in 2011, driven by demand from ICT and consumer electronics (CE) vendors for a regional channel development platform. DISTREE Latin America offers easy access to major buyers from across this vast region in one place at one time. www.distree-latam.com

DISTREE Latin America offers vendors a powerful and cost-effective platform to meet senior executives from major distributors and retailers from across this vast continent, accelerating channel development for all attendees. Follow DISTREE Latin America updates on Twitter www.twitter.com/DISTREE_LatAm

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