Lessons to Brazil – Selling quality

Statistics say Brazilian industry is shrinking by the day. Some companies are putting employees on leave or closing their doors until the government and unions do something to protect them.

My dentist was hysterical last time I had a tooth treated because she was trying to purchase injections. She said the government quality inspection agency had cancelled the license for US injections and she was trying to get them anyway and failing miserably. She said she could simply not buy the Brazilian ones because they were terrible quality, and that the US ones had silicone and didn´t hurt her patient´s gums.

The reason Brazilian industry is dropping is because it is 10 years behind in terms of technology, innovation and quality, and it´s not because of lack of investment. Protectionism is always a backward path, always bad. Competitiveness is healthy and makes industries work harder. But most Latin American countries continue to prefer to protect their industries against the outside world.

In the 20 years I have lived in Brazil, the story is always the same. A new product comes out and is initially successful because it is good quality, eager to please and pleasing. Then, when sales go up, the quality drops and the company becomes greedy. Greed is inherent to companies and most global companies cut costs by exporting labour to China or India but quality has to be maintained or improved to please customers. In Brazil, they reduce quality because they can´t (or won´t) reduce labour costs or tax (which are both incredibly high and made burdensome by the government who claims to protect them) so good quality products become harder and harder to find. Instead of adopting the US mentality of selling more, they try to sell for more. A higher price is always the focus, never a higher quantity (we all accept lesser quality if the price is low) and quality is reduced to an absolute minimum.

There are exceptions of course, such as Natura, Alpargatas, Hering, Vale and other well-established companies, and they have a huge number of faithful consumers who would never trade the quality of their products for anything cheaper, which goes to show that all Brazilian customers are willing to pay for quality. Other companies truly try to maintain quality but cannot because the quality of raw materials is so bad. Fiorucci, for example, closed its factory in the town I live in because the quality of Brazilian thread (and other raw materials) is so bad. Grimoldi, an Argentinian shoe company, stopped manufacturing shoes in Brazil (cheaper labour) because Brazilian glue is so bad. Shoes that were known for their quality when produced in Argentina, would literally fall apart in your hand when they came from Brazil.

Foreigners who live in Brazil, who are accustomed to buying items with a basic usable quality are forced to ask friends and family to send them plugs, sockets, clothes pegs, thread, pins and needles (Brazilian ones get rusty although some claim to be stainless steel). Of course, lots of these products come from China and Taiwan, but the Brazilian ones are more expensive and just as bad.

In some cases, the bad quality gets to be dangerous. I once purchased a “cheap” iron (a well-known brand, the cheapest in the store but not cheap by my standards) that I had to stop using in the middle of ironing a shirt because it was releasing sparks and short-circuiting. Too many electrical items have exposed live parts that aren´t supposed to be live.

Lots of Brazilian housewives are waiting for a decent furniture company to open its doors. They are simply tired of wardrobes that can´t be moved because the parts never fit properly again and you can´t close the doors or drawers. The problem is that they are not cheap and there is no mid-option. It´s either BRL 400 or BRL 4000 for a decent quality wardrobe.

If Brazil truly wants to grow it has to create an real open market, allow companies to collapse and re-erect so they can compete and become better, following globally-accepted quality standards. Until they do, Brazilian industry will only sell to Brazilians who are starting to look elsewhere for the quality they expect.

2 responses to “Lessons to Brazil – Selling quality

  1. I am a foreigner who has been living in Brazil for the past 7 months with my new Brasileira wife. We have bought a number of new items for our apartment, and I have to disagree with some of your comments. We have been delighted with the quality of various locally made products, especially a new estante and a kitchen cupboard stand. We negotiated the estante for a very good price from a furniture store, and it arrived in 2 large parcels of shelves. A tradesman arrived and miraculously assembled it to its full size over 2-3 hours. It is now the proud centre of our home audio visual gear. The design and quality is faultless. Same for the kitchen unit which compactly stores a whole lot of stuff that was cluttered in various cupboards.
    I have bought 3 pairs of very good shoes, and my only concern is that sports shoes are not very waterproof. One shower and your socks are wet!
    I also have a locally made CD player which is fine. And lots of small items such as plugs and light fittings with no problems.

    I agree with your comments about protectionism. In the long run, every country has to develop robust products and industries which are internationally competitive. The country I came from lost its audio-visual and car manufacturing plants to imported competition many years ago. The result is the importation of superior products at considerably lower prices. Local manufacturers will survive if they develop products and systems that can compete, and eventually these can be exported too.

    My experience overall in Brazil has been very positive. My main problem has been grappling with the primeval and glacial banking system. It has taken months to get a cheque and savings account established, and I still cannot make transfers from one to the other. However, the bank staff I have been working through are always extremely friendly and helpful. The locals need to get away from the hour long queues and into cashless internet banking, but their appears little enthusiasm for that to happen! And I am not impressed by the highway robbery you are subjected too for buying pharmaceutical products. Monstrous prices, and a lot of shopping around is required.

    Your website/postings are most thoughtful and entertaining – keep it up!! -Boby

    Like

    • Thanks for the comment. Moving to a new country is like any relationship. At first you are in love and think everything is wonderful, but then you start to see the good and the bad. Like all countries, Brazil has its good and bad points. The inefficient, over complex way of doing things is almost bearable because the people seem to truly want to help you solve your problem (if they like you). There are good quality items if you check for well-known brands like Sony when buying a TV, etc. But if you try to but a local brand, you will encounter the electric shocks and faulty wiring. You might start to feel the frustration when you realize light bulbs last a fraction of what they lasted back home. That said, if you are willing to pay more for a global brand that you can trust, life is definitely simpler. Once you start earning your meagre salary in BRL and have to find cheaper options to make ends meet (which might never happen if you don´t have financial problems), then the problems start.
      I think some Brazilians have problems with internet banking because some are still not familiar with computers and internet (have you seen the queues for assistance?), while other still don´t trust internet banking or find it too complicated (you need to register, get code cards, etc, etc.). It´ll get there. I´m sure.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s