Localizing for Brazil, a nation on the rise

Now seems to be a good time for Brazil, and not only because of its upcoming mega sporting events such as the 2014 FIFA World Cup and 2016 Summer Olympic Games. There is a strengthening of the economy and improved infrastructure investments to support global businesses, brands and colossal international events.

Thus, the country is now safer and more attractive for global companies wanting to do business in Brazil. It will be interesting to see how political and economic powers will combine with the nation’s passion for music and culture, sports and of course, the joyous Carnival of Brazil. A country dominated by the Amazon basin, Brazil is asking loud and clear: are we ready to support full-scale globalization?

Brazil is one of the BRIC economies (Brazil, Russia, India and China). BRIC was a term coined in 2001 referring to the countries that may shift global economic power away from the G7 economies, meaning the United States, Japan, France, Germany, Italy, the United Kingdom and Canada. Brazil is the largest national economy in Latin America and is now the world’s sixth largest economy, with a GDP of $2,253 trillion in 2012 and 2013 indicating a GDP rise in the region of 2%.

Recent research by PricewaterhouseCoopers indicates that Brazil will become the fourth largest global economy by 2050. With a population of 202 million and a steadily growing economy, combined with the aforementioned up and coming global sporting events, it is no great surprise that marketers and companies are looking to Brazil to seize business opportunities for product and consumer global market expansion.

For Language Service Providers (LSPs) this means more work on the horizon for localization of content into Brazilian Portuguese. As more global businesses enter the Brazilian market and as Brazilian consumers get even greater spending power, globalization managers and LSPs need to make sure they are ready for this key emerging market.

There are a number of well-documented downsides to Brazil’s spotlight, however, that pose both challenges and risks for market opportunists. Brazil’s ongoing antigovernment protests and demonstrations could erode global investor confidence and impair existing business operations. Today, Brazil has a very high cost of living and rising inflation. Brazil has a checkered history with rising prices, having suffered from hyperinflation in the 1980s and 90s. Economists tend to cast a wary eye on the fluctuating cost of goods.

Brazilians are tech-savvy consumers and demand is rising, pushing up prices. Meanwhile, Brazilians pay very high taxes to support high levels of government spending (20% of GDP) resulting in economic disparity and rising cost of living. The quality of life remains relatively poor in several regions. On the upside, unemployment rates are going down, thanks in part to infrastructure and service needs of the upcoming large sporting events.


Brazilian market

Global companies entering the Brazilian market can make the mistake of lumping Brazil into an overall Latin American localization entry strategy. Taking this approach can risk offending and even alienating potential consumers. When translating and creating content, it is important that the Brazilian culture is correctly understood and targeted.

Brazilian culture is shaped far more by African and European influences than probably any other Hispanic culture. Brazil is known for its glamorous image, with high consumption in beauty and fashion markets. A rising middle and working class means there is a growing demand for financial services and expanding technology. The unique characteristics of the Brazilian market spell out big opportunities across multiple sectors and industries — highly appealing to companies expanding their global market reach. Fully 81% of online shoppers in Brazil use social networks to search for new products and engage with brands, and according to comscore.com, Brazil is the world’s second biggest user of Twitter. Brazilian web users spend nearly twice the average time on Google as others worldwide. This is due to the popularity of Google’s social platform, Orkut.

Brazil is geographically divided into five regions, with each region having distinct market needs, almost like different countries. São Paulo, Rio de Janeiro and the south of Brazil are very “tech savvy” regions and are well connected to the internet. In northeast and central Brazil, traditional forms of media such as radio and television are more popular. However, we must be aware of the volatility of trends in such emerging markets — consumers can “leapfrog” from having no technology straight to owning a smartphone. Companies must anticipate this and adapt the right content and tools in advance.

Brazil is strictly a Portuguese-speaking country, with almost 100% of the population speaking Brazilian Portuguese. It is the language of daily life. Brazilian, African and European Portuguese have significant differences. They differ in spelling and context. The use of European Portuguese is unacceptable to Brazilians; thus for global companies, use of native speakers and language talents is crucial.

Welocalize recently conducted extensive market research on language services for BRIC nations. Due to the significance of Brazil as a rapidly emerging market, the latest study for English to Brazilian Portuguese language services unveiled expansive opportunities that lie in the Brazilian market and how it will impact the language services supply chain. The research team conducted a survey of seven existing English to Brazilian Portuguese language vendors, all based in Brazil, to discover the challenges they faced in 2013-2014.

When the respondents were asked about the top challenges they faced this past year (Figure 1), 86% stated that lack of quality resources was a key problem closely followed by increasing rates charged by native translators. One of the problems facing the Brazilian Portuguese language market is the fact that translation is not a highly regarded profession compared with the professional careers of doctors, lawyers and engineers. The survey respondents also cited inflation, the growing complexity of translation projects and pressure to reduce prices as key challenges.

A second key finding dealt with linguist attrition (Figure 2). Despite lack of resources presenting a challenge for the Brazilian vendors, 57% of respondents experienced attrition rates under 5% and none of the vendors reported losses of linguists exceeding 20%. Betty Galiano, CEO of Ocean Translations, noted that “Brazilian linguists are like the country they were born in, easygoing, relaxed, full of life, and they know how to live. Many work near the sea — they have moved from large industrial centers like São Paulo to improve their quality of life. In the past it was difficult to find reliable linguists; some never met their deadlines. Now, things have changed.”

The language rates for Brazil were found to be high. As language rates are made up of a number of internal and external business costs, there were a number of trends observed within the research.

High cost of living had a significant impact on rates. With the cost of living being very high in Brazil, this significantly impacted the rates charged by native translators. Similar comments were found relating to office overheads, especially for vendors based in the major cities of Brazil. The important business centers of Brazil are the megacities of São Paulo and Rio de Janeiro; Belo Horizonte, Salvador, Curitiba and Porto Alegre being other key economic and key employment centers.

Not only is Brazil going to be popular with sporting event tourists, it is becoming a popular destination due to the strengthening of the Brazilian real (BRL), which is up 27%. Interestingly, only 43% of vendors we spoke to calculated their costs and rates in BRL with 57% showing costs in US dollars. All language vendors surveyed sell their services in US dollars and 80% also sold in euros, which impacts the final language rate due to straight mark-up. Strengthening currencies attract tourists and businesses, leading to a forecast for a strong emerging global market for US and European-based brands.


Winning at the 2014 FIFA World Cup

With Brazil hosting this year’s football (soccer) championship and future Olympic Games, more than 200 countries and 180 languages will unite. An estimated 332,000 permanent and 381,000 temporary jobs will be created in preparation for the event. “The three-year build-up to the 2014 soccer World Cup will boost Brazil’s economy by 1.5% of its annual GDP,” said chief economist of Itau Unibanco Holding SA, Latin America’s largest bank.

Brazil expects to host more than 600,000 soccer international tourists and more than three million Brazilians for the tournament in June this year — a huge multicultural, multilingual party in Brazil. If ever there was a right time for Brazil to shine, it’s now. For businesses, it’s time to evaluate your localization strategies to ensure you maximize every emerging market opportunity.