Online platforms create opportunities for new companies abroad, experts say

06/30/2022

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Expansion of e-commerce has created opportunities for new companies to venture into exporting — Foto: Ana Paula Paiva/Valor

The growth of internet sales — and a favorable exchange rate — drove commerce into a boom of new exporting companies with continuous sales to other countries. The number of those companies increased to 15,770 last year from 14,490 in 2019 — up 8.9%.

Commerce expanded nearly two times faster (16.5%) than the average and accounted for nearly one-third of the total number of regular exporters in 2021. The manufacturing sector remains the leader, with 9,400 companies last year, but its growth from 2019 to 2021 was smaller, at 2.8%. The data are from the Center for Foreign Trade Studies Foundation (Funcex).

For specialists, the expansion of e-commerce has created opportunities for new companies to venture into exporting. According to a survey by economist Daiane Santos and statistician Henry Pourchet, with Funcex, companies debuting in shipments overseas totaled 5,270 in 2021, 26% more than in 2019, before the pandemic hit Brazil. Again, commerce, with 2,500 companies, led the pack, with an increase of 45.8%. Industries added 1,960 companies, with an advance of 17.2%.

The devalued exchange rate, although not considered as a guarantee or as the only condition for the increase in shipments, also served as a stimulus, at the same time that the health crisis forced companies to improve their logistics structure, making the transportation and delivery of products more efficient and faster, said Ms. Santos.

The survey shows that in 2021 exporters totaled 30,960 companies, but only about half are regular exporters – those that made shipments every year during the period studied since they started selling overseas.

According to the survey, commerce was already gradually gaining more space among continuing exporters as the number of exporters grew. In 2000, the manufacturing segment accounted for 65.8% of regular exporters while commerce represented 24.5%. Ten years later, those shares were 64.8% and 27.9%. Last year they closed at 59.7% and 32%, respectively.

The data show the great interest that the foreign market arouses, especially from smaller companies that can serve certain niches in which small importing companies seek small suppliers, said José Augusto de Castro, head of the Foreign Trade Association of Brazil (AEB). The growth of trade over time among regular exporters, however, shows that the industry has more difficulty in sustaining its shipments, often taking advantage of favorable cycles or more irregular export opportunities.

Mr. Castro also considers that although the devaluation of the real may have created a temporary advantage for the surge in the number of companies, the exported values are concentrated by relatively few companies. The number of exporting companies in the agribusiness sector, he points out, exemplifies this well. In a sector in which newcomers are less common, regular exporters historically stand at around 300 companies. In 2021 there were 302, which represented about 2% of all regular exporters. In terms of value, the shipment of agricultural products last year accounted for 20% of the $280.8 billion exported by Brazil.

Ms. Santos and Mr. Pourchet say in the survey that the most recent export momentum was influenced by government stimulus policies and also by the economic situation. Between 2009, the first year after the international financial crisis, and 2014, the number of exporters stabilized at around 21,000 companies.

With the contraction of the domestic economy between 2015 and 2018, there is an increase in the number of companies entering the export base, with a new level of about 25,000 companies at the end of this period. In the last four years, there was a more vigorous year-over-year growth, maintained during the pandemic period.

Ms. Santos foresees that the number of regular exporters and opportunities will increase further amid the reorganization of the international trade in search of resilience and supplier diversification. “But it is not possible to rely solely on exchange rate devaluation to encourage new companies to export or help sustain shipments by newcomers,” she said. To do so, she stresses, it is necessary to have support from programs that encourage exports, including guidance and qualification for companies.

*By Marta Watanabe — São Paulo

Source: Valor International

https://valorinternational.globo.com/