The danger of duties? Here’s how Spanish brand Munich managed to develop sales in Brazil, despite the protectionist measures the South American country adopts.
Green-gold protectionism
Brazil (population 216 million) is the world’s ninth largest economy and has been a potential market for the global fashion industry for years. Hindering its development, however, are tariffs that make imported products much more expensive than those manufactured locally. A policy that, over time, has favored the development of the domestic industry. In the 1950s, for example, major automakers such as Volkswagen, Ford, Fiat and Mercedes opened manufacturing plants in Brazil in order to gain access to the local market. Similarly, companies in the fashion industry followed.
The story of Munich
“Twenty years ago my father saw there was an opportunity and, on his own, looked for a distributor”, Xavier Berneda Martín, who represents the third generation of the family at the brand’s helm, recalls to Modaes. But duties required Munich to charge prices that made the goods out of reach for Brazil’s middle class. Spanish brands such as Mango or Desigual gave up. But Munich did not, and found a solution. Opening a shoe factory in Brazilia was too much. But for the past three years, the entity has been working with a local entrepreneur, with whom it signed a licensing agreement to produce items for distribution in the country. And now, Mr. Berneda explains, it plans to develop direct retail. “Brazil is today the fastest growing market”, Berneda confesses.
The four recommendations
The Spanish entrepreneur gives four recommendations to those who want to approach a new market. The first: “Know the country and adapt to it”, The second: “Develop a plan, with a strategy, set up the structure, operations and collection”. The third: “Turn to a partner or distributor and choose countries that, legally, offer guarantees”. And the fourth: “Protect the brand”. Munich closed 2023 with sales equal to 81 million euro, up 9% on 2022. The company increased sales by 82% since 2019, thanks in part to Brazil.
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