ADVANCE – Advance Your Business

In Brazil, bad is good

Posted in Uncategorized por Dagoberto Hajjar em 21 de outubro de 2013

Mais uma publicação em minha coluna internacional:

Over the course of 2013 we conducted three market surveys to identify the perception of ICT business leaders regarding the Brazilian economy and its impact on ICT market. The surveys were carried out in April, July and September and had significantly different outcomes.

The leaders’ expectations with respect to the GDP growth were 2.5% in April, 1.6% in July, and 1.9% in September. In April, 11% of the interviewees said the yearly GDP would grow by more than 10%. At first we thought that there was an application error with our online questionnaire, so we phoned them to confirm the data.

In the July and September surveys, the answers were very close to the average and to market analysts’ expectations. Apparently, the political manifestations that occurred throughout the country in June and July made ICT business owners to learn about the economy and its impact on their businesses.

The leaders’ expectations with respect to ICT sales growth were 10.3% in April, 3.2% in July, and 3.7% in September. However, most of the interviewees said that they believed their companies would grow more than the market average, which demonstrates a good dose of optimism…or hope.

In July, we asked them about their sales results for the first half of the year. I believe that many companies still hadn’t calculated their results, and 39% said they had had good or excellent results in the first half, based on their perception. In September, after the results were calculated, only 16% said they had had good or excellent results in the first half.

The second half will be challenging for 28% of the interviewees, who believe they will have bad or terrible results. However, we also have 28% who think they will have good or excellent results in the second half. Every time we face a period of crisis, we see money moving and changing hands – better prepared businesses “steal” market share from those that are unprepared.

We asked business leaders if they believed that selling technology products and services to small and medium businesses (SMB) would be an alternative strategy in the crisis, and 72% said they did, since this is a very large and technology needy market. Now, surprising enought, 42% of the interviewees decided to go the other way to face the crisis: they seek for larger customers instead of SMBs. Confusing? Well, I think I can understand and explain it.

In early 2012, we began talking about crisis, but no one really took any actions. At the end of 2012, businesses started to be concerned and took a number of emergency, palliative actions, believing that the crisis would be short term. In 2013, we realized that the economic crisis would be MUCH longer than originally expected. We will have another 3 or more years of low GDP growth. It is therefore not possible to survive from palliative actions only. In order to face the crisis, businesses will need to buy technology (ICT) to gain operational efficiency, reduce costs and increase sales.

That’s why we see larger companies including the purchase of technology (ICT) in their 2014 budgets. SMBs, in Brazil, still haven’t felt the effects of the crisis as deeply as larger companies. SMBs will feel the impact of the crisis during 2014 and will probably include ICT as a priority in their 2015 budgets.

The worse the crisis, the better for those who sell ICT products and services. The crisis will boost ICT sales for large companies in 2014, and for SMBs in 2015.

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