Businesses in Israel are turning towards Latin America to enjoy growth. As the country’s growth comes in slower than expected with drops in exports and a decline in consumer spending, some entrepreneurs have decided that looking outside of their country, and choosing international expansion, will help them to increase profitability and take their business to the next level.
If you’re a business in Israel and you’re thinking about expanding overseas, then we’ve put together some top tips for growing your brand in Latin America. Read on if you’re ready to tap into a lucrative new market, with millions of potential customers that are waiting to buy from you.
Why Latin America?
If you’re looking for a new country to expand into, then you may first think of Western giants like the United States, the United Kingdom, and Canada, but the truth is that it’s not always easy to grow an audience in such territories and compete with established businesses that already have strong brand awareness and market share. Choosing growing markets, and markets that have yet to fully materialize, is a more sensible idea, especially if you’re a small or medium-sized business and don’t have millions of pounds to spend on marketing and business development.
With an economy worth almost $5 trillion US dollars, Latin America is one country that you simply cannot ignore. It’s home to more than 600 million citizens, and what makes it such an exciting territory is that it has a growing middle class, meaning there are millions of people who have a disposable income to spend on products and services that you can provide. Indeed, more than 50 million citizens have joined the middle class in the past decade, and that number is set to continue to rise as the countries enjoy increase GDPs, growth and huge investments.
Entering the market now, before your competitors from Israel and the world get a chance, will give you headway and allow you to develop business relationships and grow your market share. Countries such as Mexico, which has set a goal to grow 6% every year, and Panama, a country that has doubled its GDP in the past ten years, are truly exciting for entrepreneurs like you.
Forming a new company
If you want to expand into Latin America, then one of the first things that you’ll need to do is look at company formation. Indeed, setting up a new business will require some capital, and it means you’ll need to look to employee some people local to the country you’re launching in, but the low barriers to entry and low salaries mean that you should be able to set up without spending too much money. Some countries in Latin America require overseas investors to bring with them a set amount of money to prove that they can invest in the country, whilst others expect for you to hire a minimum of five employees within your first year, to be sure you understand the rules and regulations before getting started to reduce the chances of fines or being banned from trading.
Embracing the Latin American culture
Once you’ve decided to move into Latin America to start your own business, or to expand your already established business in Israel, the next thing that you should do is to understand the cultural differences of your country to Latin American countries. The political tension between Isreal and Latin America was finally squashed when Prime Minister Netanyahu made a visit to the territory in 2017 and has since opened doors for businesses wanting to enter the market.
From a cultural perspective, though, Latin Americans are pretty similar to you and I. Indeed, they put their family at the heart of everything that they do, but primarily practice Christianity, with 90% of the population reported to be of Christian faith. The countries enjoy sports and visual arts and have a rich and diverse film, dance, theatre, and music industry. Food is also important to Latin Americans, with lots of maize-based dishes, like tortillas and tamales, and spices, salsas, and condiments like guacamole and pico de gallo. If you’re planning to move to the country, even temporarily to start your new business, then make sure you experience everything the country has to offer and embrace the culture to maximize your brand’s appeal.
Something else that you should consider is sobremesa, table talk that happens at the end of meals. It’s an unwritten rule in the country, and it’s great for businesspeople who want to take the time to get to know other key figures and promote their products and services. At least in the early days of your venture into Latin America, you should embrace sobremesa and attend as many networking events and conferences as possible to put your company on people’s lips.
Localizing your products
If you’re importing your products from Israel and want to sell them to consumers in Latin America, you should first do your market research to determine just how well suited they are to the market. Indeed, it may be that you need to change your packaging to appeal to a new audience, or completely redesign your product so it looks different from that of a competitor.
It’s important that you treat every country differently so packaging and a marketing campaign in Mexico may not be right in Colombia, for example. The same can be said for your company branding, literature and website – tones, attitudes and cultures means that something that may have worked in your native country may be inappropriate or outdated in Latin America, or elsewhere in the world, so work with a business advisor and marketing specialist to finalize your messages and plans before you make any big decisions or make ill-informed branding mistakes.
Expanding into Latin America can be incredibly lucrative for your Israeli business, but it’s important that you take the time to get to know the audience and market before you make the jump. Whatever you decide to do, we wish you the very best of luck!