A daring project that teams up Ponto Frio, Volkswagen, and Tenta to go after the US$10 Billion Brazilian immigrants transfer home every year
July 11, 2007
Via ISTOE Dinheiro
In Brazilian President’s own words, those are “silent investments” in Brazil with which “the immigrant’s family can make a decent living and buy their own home” says Luis Inacio Lula da Silva.
A group of companies, led by entrepreneurs Samuel Goldstein and Ricardo Bellino the man who brought Elite Models and Donald Trump to Brazil, intends to break the barriers and unite the trade borders between the U.S. and Brazil, and also with Japan and Europe in the near future.
Along with Ponto Frio, (a fast growing chain of home-appliances/electronics chain of stores), Tenda, (the largest real state contractor focused on the low-income target), and automobile manufacturer Volkswagen, Bellino will launch Casas Brasileiras,
It’s a US$ 15 Million initial investment in a chain of stores in the US that will allow the Brazilian immigrant to buy anything from electronics to a house for his future use or for their relatives back home. “Our goal is to open 10 stores and gross one billion dollars yearly within the next five years” says Bellino.
Construmex, a Mexican company that developed a similar operation targeting the Mexican immigrant, inspired the concept.
Recent studies show that the 5 Million Brazilians who live abroad send a monthly average of US 500,00 to Brazil. “The immigrant may struggle to make ends meet, but the money for the family in Brazil is sacred, says Jose Carlos Meihy, history professor at the University of São Paulo and author of books on the Brazilian exodus. The problem lies on the fact that not always the remitted money is used appropriately, in accordance to the sender’s wishes. “One sends money for a new family refrigerator, and it ends up being spent in superfluous goods, instead” says Meihy.
That is why Casas Brasileiras presents itself as a great alternative. At any of its stores the immigrant will be able to pick and buy a product from a participating company’s virtual catalog, and pay for it in Brazil.
How? There will be a money-transfer agent at the premises, which will allow the immigrant to make a purchase and pay for it with no remittance fees. And the goods will be at his family’s disposal at the participating company’s store in Brazil. “ We know there is a market and plenty of consumers eager for this type of operation,” says Manoel Amorim, president of Ponto Frio, on his first interview as CEO of the company, only a few minutes after signing the agreement to join Casas Brasileiras venture.
“Without a doubt, it is a great opportunity, and our goal is to gross US$ 100 Million in this business”. Ponto Frio enters the game with great appetite; after all, it defeated giant Casas Bahia in the dispute for a place in the project. The priority had been given to Michel Klein’s
Company, but Ponto Frio stole the ball and scored the winning goal at the last minute.
“They made us an offer we couldn’t refuse” say Bellino. The trade applauds the smart move made by the Rio De Janeiro Corporation.
“This is great business for any retail company,” says Claudio Felisoni de Angelo, from University of São Paulo’s PROVAR, an institute that studies the retail market. In special for Ponto Frio, a company that will, in one single strike, pump up it’s close to US$ 2 Billion billings by 6%. Besides allowing the Brazilian immigrant to pay abroad products that will be collected in Brazil, Casas Brasileiras, business plan includes another innovation that may well introduce a new paradigm to the Brazilian market. The idea is to transform each of the participant’s points of sale into an agency where the immigrant’s family member can cash the money sent by it’s counterpart overseas.
Which means, an immigrant will remit any amount of dollars to Brazil, and his family will be able to withdraw the money at one of the participating company’s stores, rather than at a bank, by means of a special debit card issued by Casas Brasileiras.
“The mechanism is still being evaluate by our consulting firm Ernst & Young” says Henrique Alves Pinto, CEO of Minas Gerais contracting firm Tenda, that builds popular housing for low-income buyers, specially in regions with large concentration of immigrants’
Families, such as Governador Valadares, Juiz de Fora and others. “Any action that will increase public flow in our stores is very welcome”.
One can have an idea of what this possibility may represent, by looking at Wal Mart’s numbers. Through a deal cut with money-transfer agent Western Union, Mexican
Immigrant’s family members may withdraw cash at the supermarket’s cashiers.
All numbers added, it’s a great deal for Wal Mart, since 30% of all the withdrawn money ends up being spent right there at the store.
Each of Casas Brasileiras stores will have a web-terminal through which the immigrant will be able to video-conference with his family members and friends in Brazil, who will use an identical equipment located at the participating companies’ stores.
Another innovative strategy is the Company’s intention to form an Amway-style network of sales representatives throughout the United States. “We hope to count on 250 thousand salespersons,” says Bellino.
The Opening of the first store in New Jersey’s capital Newark is expected to take place in November. Other stores will open shortly after in New York, Boston, Framingham, Washington, Atlanta, New Orleans, Houston, Miami, and in the near future, Japan and Portugal.
The launching of the brand, however, is schedule for September 2nd, during the Brazilian Day, an event that draws over 1.5 million people to the streets of Manhattan.
Casas Brasileiras’ marketing strategy includes advertising on Globo and Record networks international channels, as well as on Brazilian community oriented newspapers.
While Ponto Frio has a penguin for mascot and Casas Bahia, a little “cangaceiro” (a sort of Brazilian northeastern cowboy), Casas Brasileiras chose the figure of an energetic and well-spirited parrot. Celebrities endorsements are within the plans and negotiations are under way with a top talk-show host and a very popular Brazilian country band.
Because of the project’s magnitude and the presence of major players, automobile manufacturer Volkswagen became very interested in joining the group.
“We are studying the best way to sell cars through Casas Brasileiras,” says Marcelo Olival, Volkswagen’s Marketing Director. “The idea is being very well received within the company, and it will be a great deal if we can reach this consumer right at the source.”
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