Too often, as digital marketers with English as our first or second language we tend to assume the USA is the panacea of all marketing efforts.
While it’s certainly true that the US is a big market, the experience of Hollywood showed us that international markets are not to be neglected and can bring in substantial revenues.
In fact, a few months ago I came across an article online discussing how increasingly since the turn of the millennium Hollywood studios make sensibly more money outside the USA for major movie releases (blockbusters typically gross 70% of their revenues outside the US these days).
Furthermore, the article argued that by 2018 (less than 2 years from now) China only will be a bigger market than the US for US-made movies.
It’s in this light (and following a chance meeting with my now Brazilian partner – Fernando at the last Marketing Mayem in Orlando) that for the past couple of weeks I was in Brazil in view of introducing Youzign to this exciting market.
I stayed in the heart of the Brazilian economy for this purpose, Sao Paulo and attended the excellent Afiliados Brazil conference as an exhibitor.
Here are 10 things we learned about this first venture into the Latin America’s powerhouse.
1. The Brazilian digital market is HUGE
Walking the walk: I spent two weeks in Brazil to understand the market and prepare for the Youzign Brasil launch this summer
To be honest, prior to meeting my business partner Fernando and visiting Brazil, I was completely ignorant about the fact that Brazilians were avid consumers of digital marketing products.
I was totally flaggerblasted when I found that million dollar product launches are not unheard of in Brazil…
In fact, the Brazilian version of the Product Launch Formula is rumored to have sold R$4,000,000 when they launched last year, in less than a week.
If you haven’t heard about it before, the Product Launch Formula is a famous internet marketing course developed by all-round great guy and marketing legend – Jeff Walker in the 2000s.
Brazilian marketer and former Jeff Walker and his student Erico Rocha bought the rights to launch it in Brazil, and is making a killing with it.
These are incredible numbers when you consider that the student might just be selling more of the PLF than the master these days (this doesn’t take anything away from the genius of Jeff Walker though, quite the contrary, actually).
Other smart internet marketing players like Ryan Deiss’ of DigitalMarketer and Adespresso have already stroke representation/licensing deals with local online marketing companies like Simplix already here.
Something is definitely happening here.
2. Brazilians have their own ways to pay online
One pitfall of what I would dub “post-colonial marketing” would be to assume that launching your product in Brazil (or any other world market) would amount to sticking a Paypal button, maybe translating your interface and accepting payments.
I mention it because discussing with Brazilians it was clear that a lot of US or European-based digital companies were falling into this trap.
Portuguese-based email marketing providers E-goi has over 100,000 customers in Brazil while Aweber and Mailchimp are still struggling to make a dent.
Reason why: foreign companies are unaware of local realities.
As you may know, outside of service-based economies like the US and Europe credit cards are not readily available for everyone. So if your product only accepts PayPal and credit cards you would be likely turning away 50% of your customers in Brazil.
The truth is… every country around the world is entering the digital revolution in its own way. And credit cards and PayPal might not be the ultimate global payment solutions when the dust settles, let’s say 20 years from now.
While mobile network companies are all the rage in Africa and are increasingly replacing old fashioned banks, in Brazil there is something called “Boletos” which are like vouchers issued by your bank which you can pay with online.
Another particularity of the Brazilian (and other Latin American markets, I noticed the same while in Colombia) is the heavy reliance on installments for online and offline shopping.
In fact, when you order a pizza at home in Brazil and you pay with a card you will be offered to pay it in installments, if you wish.
Thanks to a particular credit system, virtually anything can be paid in installments in Brazil and digital products is no exception.
The good thing is that as a seller you can choose to get paid the entire amount right up front (with a fee) or take the installments the customer choose to pay.
One of my Brazilian partners argued that this allows digital companies in Brazil to command much higher prices, which is going to be my next point.
3. Digital product prices are higher in Brazil
Maybe because of the installments system, it appears the price of digital products was routinely two to three times higher in Brazil. I found the same to be true in France too.
High prices are also maybe due to the fact that upsells are uncommon in Brazil; so you can charge more up front to make sure you get the same value from customers.
But the true reason of high prices is certainly a lack of competition. While the US and English-speaking digital markets is incredibly competitive, in other countries you can enter as being virtually the “only” solution in your niche.
The price differences between countries can give you some leverage, but note that to be a coherent global player you will need to be sensible about not overcharging customers based on their location.
Mainstream companies like Zara for instance, have sensibly lower prices in their home countries versus foreign markets (a blogger found that Zara was 36% cheaper in Spain versus Zara in Malaysia).
But if you charge $100 in the USA and $500 in Brazil for the same product (which is a realistic scenario I have seen in some cases) it might be hard to justify it to your Brazilian customers who find out about your US pricing.
4. Brazil has its own Clickbank (and it kicks asses)
Since Brazilians have their own ways of paying online it’s no surprise that Brazilian companies have developed their own versions of Clickbank (a digital product marketplace, payment and affiliate platform) over the years.
The clear leader in this market in Brazil is Hotmart, which feature set does not compete with some of its American counterpart (yet) but is catching up at a very fast pace.
In fact recently, Hotmart released their own smartphone apps which allows you to receive live sales notifications on your phone (a feature that some of its US competitors are clearly missing.)
Hotmart is also launching in Spain and France this year, which is an interesting trend of Brazilian digital companies expanding abroad.
I met with the Hotmart team in Afiliados Brazil and they mentioned they have 150 staffs already: it’s no small operation. Again, another hint at the size of the Brazilian market for digital marketing.
For non-digital products markets, there are also tons of CPA networks present. In fact at Afiliados Brazil there were at least 10 CPA networks with their own stands.
One of the network owners who specialize in health products (similar to markethealth.com) mentioned they were grossing several million Brazilian Real every month, promoting products like Acai Berry and other supplements on the Brazilian market.
5. Brazilians can’t get enough of digital products
The question is… do people actually want to buy digital products such as infoproducts, WordPress plugins, SaaS apps and the likes?
The answer is a resounding yes.
I know of a brazilian marketer who regularly buys white label rights to US based digital products, then translates the sales materials and send the offer to his customer list.
He routinely makes 100 to 300 sales for each products he translates. And these are not even always the “best” products to be honest.
So at this stage it is no longer a question of “would my product sell in Brazil”.
If your product sold in the US it will sell in Brazil. Not selling in this market is virtually akin to throwing money away, and it will become increasingly true as the Brazilian digital market evolves.
The main issue Brazilian digital consumers face is that most products are not translated to Portuguese. So what some smart Brazilian resellers do is 1) translate these products and 2) provide support for these in Portuguese.
Again, this is money left on the table by foreign vendors. If you can smarten up to translate your app and provide support in Portuguese, you’ll be making more profits than if you just leave it to a third party.
And you’ll be positioning yourself for incremental growth as more and more digital marketers appear in Brazil.
6. Brazil has affiliate marketing conferences with 1000s of attendees
Simple proof is the conference we attended, Afiliados Brazil, which gathered other 2,000 affiliates from all over Brazil.
The event had I would say 50 brands represented with their stands, amongst them – Youzign.
To give you a comparison, in my native country of France there isn’t anything like that. No conference in France can gather 2,000 affiliates in one place. Nor in Portugal, nor in Spain.
One other notable company to be present at this event was Udemy. In fact, I heard through the grapevine that Udemy is planning to launch in Brazil with the help of one of the local Clickbanks so that they can take payments from Boletos, instalments and the likes.
A smart move considering the payment issues Udemy would run into if they only used PayPal or credit card payments like they do in other markets.
7. You probably already have customers in Brazil anyway
As an exhibitor at Afiliados Brazil we had 5 free tickets to give away, so we decided to invite some of our Youzign customers to join us.
After a quick look through Intercom, it appeared we already had 150 customers in Brazil. So we went ahead and send an email to a segment of the most active ones, and we were pleased to have 5 Youzigners visit us at the event in Sao Paulo.
It’s always a good exercise to look at where your customers are from.
The people who buy from you despite the lack of a Portuguese translation are usually the highly educated ones with high English proficiency…
… And if these pioneers are already adopting your product, you can expect that many more will be happy to become your customers once you speak their language.
8. It’s not only for SaaS and infoproducts… Here are some surprising niches which are killing it in Brazil
To give you a broader perspective of the market, I wanted to share some of the niches that are very popular in Brazil at the moment.
When it comes to internet marketing, the Brazilian digital market is a lot like the US market 6 years ago, where the bulk of products is infoproducts and coaching products.
Saas and software application are VERY rare and high in demand, so if your product fits this category now is a good time to position yourself.
Outside the IM niche, two products were on the lips of a lot of Brazilian affiliates.
One was a product teaching Brazilian moms how to shop online for cheap baby clothes (?). This is a hit right now in Brazil, I’ll try to find a link.
The other product was a “learn English online” course that was extremely lucrative for affiliates.
Both were grossing in the millions per month.
Other popular niches included weight loss and import/export courses.
9. Getting your money out of Brazil might be more or less easy
If you are an online entrepreneur, you’ll be aware of the joys of selling online, taxes and the likes.
From what I gather, you can sell in Brazil in dollars and get your money out anytime (like most companies do).
But if you want to sell in Brazilian Real and take advantage of Boletos, instalments and all the particularities of the local system you will need to be a bit more creative.
From what I gathered you have two options: one is to use Eduzz which is very forward-thinking payment processor in Brazil.
Recently, they introduced a functionality that allows you to take payments in Brazilian Reales, then they hold your balance for a few days before sending it to your PayPal in any country you wish.
This is a great workaround and only Eduzz is offering this at the moment in Brazil. Hotmart was also looking into it as these companies understand that bringing foreign vendors in Brazil will greatly increase their bottom line.
The other option is to set up your company in Brazil. This is relatively cheap and painless, it cost about 1,000 Brazilian Reales and can be done in about 8 weeks.
I discussed this option with a local accountant and it’s likely the one we will go for for our ventures in Brazil (we are translating Youzign to Portuguese and launching Youzign Brazil in mid-August).
If you want to learn more about either of these solutions, hit me up as I am familiar with the owner of Eduzz and also the top accountant for digital products in Brazil: they can both help you get set up in Brazil in no time.
10. You need a Brazilian partner to make an impact
With all this said, I wouldn’t like to give you the false impression that setting up in a foreign country and such a unique market as Brazil is easy.
For one, the language barrier is the first roadblock. And then you got all the cultural finesses that you will never get unless you are born into the Brazilian culture.
But you are an entrepreneur, a go-getter so you must love complexity and challenges… right? 🙂
So my best advice if you are going to launch in Brazil is: 1) visit Brazil if you can and 2) get a Brazilian partner to help you launch and integrate this market.
I was fortunate to meet some really good partners in Brazil, and the general feeling is that this market is incredibly willing to open to foreign companies. This is mainly because the offers are not that strong in Brazil at the moment, so they are looking up to foreign markets for learning materials, but also productivity applications.
I like to believe that in the future a lot of people will work from home performing various services online, like we do at Youzign. Notice how many people bring their laptops to Starbucks lately?
This does seem to be becoming a global trend worldwide, with kids born with smartphones and 4G in their hands (even in low income countries) and a good chunk of the 200 million strong Brazilian population will be digital marketers in the future.
I did not do an indepth study of the digital market in Brazil (in fact, this is arguably the only article about it online in English) but to me in the next 5 years the market will be simply huge.
Based on the energy I saw at the event with 1000’s of enthusiastic digital marketers, knowing that big and medium sized companies are already making smart moves here (Digital Marketer, Udemy, Adespresso, Youzign : ) and according to my gut feeling, Brazil is no longer a market to be ignored at this point.
There are tons of very talented product launchers ready to help you take your business to Brazil, but if you need an intro I know of a couple of good ones I’ll happily introduce to you (I don’t get money for referrals).
So go ahead and take your business beyond borders, we are all humans after all : )
Hope this post was educative and helpful to your business, let me know in the comments.
Special thanks to Fernando, Dayanne and Rodrigo who kindly welcomed me and helped us get a headstart on our first visit to Brazil : )
Make it a great day,
P.S. Check out pictures of our Brazilian trip on Instagram
P.P.S. Are you already successfully selling in markets outside the US or are you considering doing so? Let me know your thoughts below!