Doing business with Latin America. Gabriela Castro-Fontoura

Чтение книги онлайн.

       6. Pound depreciation

      Without entering into detailed currency analysis, it is important to emphasise that the depreciation of the pound against local currencies; the US dollar and the Euro means that UK exports in Sterling will be comparatively cheaper today to Latin American importers than they were a few years ago.

      However, if you are importing from Latin America, you will have noticed that their products will seem more expensive now than they were in the past (not just because of currency issues but because of labour costs and other considerations). This is affecting Latin American exports, for example those of Brazil, and governments are setting out ambitious policies to encourage exports. Sometimes the flipside of this is that they also want to discourage imports (see section below on protectionism).

      An interesting aspect of this is that Latin Americans in the UK (students, business travellers and tourists) are finding that the UK is relatively cheap. Many Brazilians have told me, for example, that buying clothes in London is cheaper than in Sao Paulo (this is because of currency issues but also tax and import duties in Brazil). Many have told me that it is cheaper to dine in London (one of Europe’s most expensive cities) than in Rio. I can tell you from personal experience that the cost of living in Buenos Aires (Argentina) and Montevideo (Uruguay) is actually not that dissimilar to that of the main UK cities, taking into account rent, clothes, food and transport. I remember that ten years ago you could get a hotel in Buenos Aires for £30 and a meal for two for £10. This is not the case now!

      Remember that those foreign nationals buying from you in the UK make you an exporter. One great way of thinking laterally about these markets is to target Latin American consumers in your own country – you will be helping the UK economy and your own business, and you also have the fantastic opportunity to conduct some market research in your own back garden.

      One last point to bear in mind regarding currencies is that even if you are not an expert in currency markets, it is important that either you or someone in your business keeps an eye on what is happening to these currencies. A shock to the Brazilian real, for example, if you are heavily exporting to this country, will impact on the exchange rate (with the US dollar or Sterling) and will no doubt affect your bottom line. Is there anything you can do about it? Probably not, since this is outside your control, but what you can do is be aware of changes and plan accordingly – I will deal with currency risks in more detail later.

       7. Major events

      Without doubt, one of the main reasons why the UK, and the world, is looking at Latin America is that many businesses have their eyes set on two of the biggest events in the world, both taking place in Brazil. That is the FIFA World Cup in 2014 and the Olympic Games in 2016. I will deal with the opportunities attached to these events later.

      However, these are not the only two events Latin America will be seeing in the next four years. Any regional event, such as the Copa Libertadores, in a continent of over 600 million people, is likely to attract plenty of attention. And don’t forget that the FIFA World Cup Qualifiers are already taking place.

      It is not just about football. Other sporting events such as Formula One and tennis attract large audiences (live and via TV/internet). How can you tap into this? Latin Americans are football mad (the author included) and are also likely to watch the English Premier League and the UEFA cup, for example. What does this mean to you?

      Outside sport, there are some major events. For example, there is a major fashion week in Sao Paulo every year that attracts worldwide attention. There are specialist trade shows, from mining to franchising, that are established gatherings for a specialist crew. And a telenovela (soap opera) can bring a whole country to a halt, such as Avenida Brasil, which has 46 million regular viewers every night.