For years, Brazil was the poster child of economic success. The world’s eighth largest economy grew for decades but various corruption scandals sent the country sliding backwards into a severe recession in 2015-2016, a period during which medical device imports shrunk considerably. Now Brazil is back, somewhat. Latin America’s largest economy started to claw its way out of the hole and the medical device sector grew nearly 3% in 2017. Although the worst seems to be over and GDP is slowly growing once again, the country is not without its share of institutional problems. Corruption is still endemic and its finances are problematic. Yet this country of 211 million people offers significant opportunities for American, European and Asian medical device exporters, especially after years of curtailed device spending.
Getting a basic understanding of the Brazilian medical device market
Despite beautiful pictures featuring sandy beaches and lush rainforests, nearly 9 out of every 10 Brazilians live in urban areas with the largest cities being São Paulo, Rio de Janeiro, Brasília, Salvador and Fortaleza. As such, an overwhelming percentage of Brazil’s 6,500 hospitals are located in the cities.
Compared to most Latin American countries, Brazil has a fairly robust domestic device industry. Manufacturing ranges from low-tech to high tech products – everything from medical device consumables and dental products to implants and complex capital equipment. There about 4,000 Brazilian medical device manufacturers and roughly 57% of them actively export their devices. A sizable number of multinational device companies have manufacturing facilities in Brazil. Despite this, according to ABIMO, Brazil imports 6x more medical devices and equipment than it exports with two-thirds of its imports coming from the US, Germany, China, Japan and Malaysia.
Radiology – 25x more imports than exports
Medical and hospital equipment – 15x more imports than exports
Lab equipment –12x more imports than exports
Implants – 5x more imports than exports
Consumables – 3x more imports than exports
Dentistry – 1 to 1 imports to exports
Finding medical device and IVD distributors in Brazil
The process of screening Brazilian distributors relies less on online research and emailing than you might expect. Using the internet to locate the very best among those 4,000 Brazilian medical distributors is an exercise in futility…unless you are fluent in Portuguese. English is not widely spoken and as such, distributors typically do not translate their websites into English. Also, Brazilians are convivial people and place a high value on long-term personal relationships. To truly thrive long-term in Brazil, you better plan on spending some time there.
Of course, before you can do that, you need to find qualified distributors. So how do you go about doing this if you don’t speak Portuguese and are located thousands of miles away? Yes, you can (and should) attend once-per-year trade shows such Hospitalar but with literally thousands of exhibitors, the chances that several high-quality distributors will flock to your booth are about as good as finding an avid Argentine football fan in Brazil.
What about online distributor directories? While they do exist, the information tends to be horribly outdated and you will still run up against the language and cultural issue if you attempt outreach via email or phone. What good is a list of 1,000 medical device distributors in Brazil if you have no way to start a dialog with them? And even if you do make contact, how do you know which ones are going to be excited about representing your device versus simply adding it to their catalog as a defensive measure against other regional distributors?
TIP: Don’t try using Google Translate to make contact with local distributors in Brazil. You will immediately label yourself as an amateur and distributors won’t take you or your company seriously.
Hire a local distribution expert in Brazil
The best option for locating and screening distributors is to hire a local distribution expert, ideally one located in São Paulo, the business and medical device capital of Brazil. These consultants have spent years cultivating distributor relationships, typically during their past roles as senior sales executives for device companies. Unlike you, their emails will get opened and read by their contacts and, as is the case in any business, warm introductions always produce better results than cold inquiries.
In screening a potential distribution consultant, here are a few questions you will want to ask:
How long have you been working in medical devices and in what capacity?
Do you have expertise in certain device categories?
Can you provide an overview of the search process procedure and what this entails step by step?
Can you give me referrals of 3-4 non-Brazilian medical device companies you have worked with?
Do you receive any referral fees from distributors for products you bring to them?
Does your company have a registration number (local CNPJ number)?
Are you registered as an exporter of consultancy services?
Obviously, some of the questions about compensation can be awkward but it is essential that you ask and that you check their references. If someone refuses to share references or uses the “can’t share due to confidentiality” excuse, that’s a red flag. You need to do your due diligence so you work with someone who is reputable and transparent about how they are paid. The last thing you want is to get unwittingly tangled in a kickback scheme or other shady business practices.
Luctor Medical has expertise finding Brazilian distributors
With more than 500 distributor search projects completed so far, we know exactly how to locate and screen medical device and IVD distributors in Brazil. Our native experts in São Paulo have deep connections in the industry and operate with the highest integrity. Contact us today to talk more about how we operate and how we can help you enter the Brazilian market for the first time, or replace an underperforming distributor.
About the author:
Gavin French is a Senior Consultant for Luctor Medical in Brazil. Based in Sao Paulo since 2011, Gavin was previously VP and General Manager of Latin America for Edwards Lifesciences. He brings more than 20 years of experience in the healthcare and medical devices industry and is fluent in English, French and Portuguese. Having lived and worked in the UK, France, Switzerland and Brazil, he offers a truly well-rounded international business perspective to his medical device clients.