Brazil Economic Conference · Amway’s Next Growth Target – The Entrepreneurial Potential of...
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1 ver. 1 Brazil Economic Conference Amway’s Next Growth Target – The Entrepreneurial Potential of Brazil Odmar Almeida Filho President, Amway Brazil Oct, 2014
Transcript of Brazil Economic Conference · Amway’s Next Growth Target – The Entrepreneurial Potential of...
1 ver. 1
Brazil Economic Conference Amway’s Next Growth Target – The Entrepreneurial Potential of Brazil
Odmar Almeida Filho President, Amway Brazil
Oct, 2014
Presenter
Presentation Notes
Key in Region/Function name in Title page and in footnote (select View/Slide Master/; find Master Title Slide and edit text box at bottom left)
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Amway: #1 Direct Selling Company in the World
Operating in 100+ countries $11.8 Billion in 2013 21,000+ employees 3 Million+ Amway Distributors worldwide 450+ unique high-quality products Headquartered in Ada, MI Manufacturing in California, China,
Vietnam and India* Organic certified farms in Washington
State, California, Mexico and Brazil (Ubajara, CE)
90% of Sales from Overseas Markets
90% of Sales from Overseas Markets
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Amway is For Entrepreneurs
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Amway is For High Quality Products
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Amway is For Innovation
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Amway is For Entrepreneurs
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Brazil – The Country of the Future?
?
2009 2013 2017
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What we All Know: the Callenges of a Brazilian Entrepreneur
The Tax Burden of Small Businesses • 1/3 shut down <3yrs due to heavy tax burden • 70% pay 20%+ of revenue in taxes • 63 types of tax to keep up with and pay • 290,000 new tax rules from 1998-2012
The Logistics Burden
• Vast territory, with unkempt roads and insufficient railway coverage • World Bank Logistics Ranking: 41st position • Logistics Costs: 15.4% of GDP (USA: 8.2%; Europe: 9%)
Small Businesses - Source: Instituto Brasileito de Tributação e Planejamento Source: BDO RCS Auditores World Economic Forum Ranking on Labor Competetiveness
The Labor Burden • Tax on Labor: +82% over Gross Wage • Dated Labor Laws (1943); 100% Unionized by law • World Economic Forum Ranking (Labor Law Competitiveness): 107th out of
147 countries.
Presenter
Presentation Notes
Key highlights and learning from the 2015 plan
9 Region/Function Name
400+ Employees, 30,000+ Distributors/Entrepreneurs in:
Headquarters (Sao Paulo)
Stores
Distribution Centers
Processing Plant (Ubajara, CE)
World’s Largest Organic Acerola Farm (Ubajara, CE)
Brazil – Amway’s #1 Development Market
$100Million Investment 2013-17
2013 2025
Presenter
Presentation Notes
Moving to our WTP choice #3, Brazil as you may know is the size of a continent – roughly the size of all Western Europe – and with as much demographic diversity as Russia, China, and India So we will take a staggered approach, rolling out in 3 waves In Wave 1 we will build the South and Southeastern Regions. The population here is urban, educated, of Western European descent, and the region concentrates more than 60% of BZL’s current GDP. In comparison, it is 2x the size of Thailand, with an economy that is 4x bigger. There are close to 3,000 cities in this region, but we are focusing on the 19 metro-markets that represent the bulk of its economy. Within those, we selected 1 market (São Paulo city) to be our “proof of concept” market, where we test and validate our strategies/plans before expanding. In Wave 2, we expand into the 5 key metro-markets in the Northeast, also known as the “China of Brazil” for its rapid growing economy. The region represents 25% of BZL’s GDP, up from 15% just 5 yrs ago - so, expanding rapidly. In Wave 3, we expand into the 6 key metro-markets of the North and Central West, thereby adding a new market that represents 15% of BZL’s GDP. It is vast and scarcely populated, where most people live in 6 metro markets to which we are expanding. Back-up: Strategic geographies get Competitive Home Delivery timings and costs, BSA support, and Full Field Engagement (KAM, training) Non-strategic markets get basic HD service, no BSA support, no Field Engagement Market expansion rank order: based on economic potential (measured by IPC Indice de Potencial de Consumo) Trigger for expanding into a market: sufficient leadership interest (1-5 Platinums), economic potential (IPC), DS potential (i.e. demographics), resource availability, Trigger for opening an ABC/Shop: 5-10 Platinums, $1M to $2M in sales
10 Region/Function Name
Brazil – Amway’s #1 Development Market
• Worlds Largest Organic Farm for Acerola Cherry • Facility in Rural Northeastern Brazil (Ubajara, CE) • Produces & Exports ingredients for Amway’s product globally • 300 Direct Employees from local community • Partnership with local Elementary Schools on sustainable
farming and nutritional education
• Training & Education for 20,000+ Distributors/Entrepreneurs every year
• Leadership and management skills • Functional skills – Selling, Marketing, Finance • Business planning
Social Contribution
Presenter
Presentation Notes
Moving to our WTP choice #3, Brazil as you may know is the size of a continent – roughly the size of all Western Europe – and with as much demographic diversity as Russia, China, and India So we will take a staggered approach, rolling out in 3 waves In Wave 1 we will build the South and Southeastern Regions. The population here is urban, educated, of Western European descent, and the region concentrates more than 60% of BZL’s current GDP. In comparison, it is 2x the size of Thailand, with an economy that is 4x bigger. There are close to 3,000 cities in this region, but we are focusing on the 19 metro-markets that represent the bulk of its economy. Within those, we selected 1 market (São Paulo city) to be our “proof of concept” market, where we test and validate our strategies/plans before expanding. In Wave 2, we expand into the 5 key metro-markets in the Northeast, also known as the “China of Brazil” for its rapid growing economy. The region represents 25% of BZL’s GDP, up from 15% just 5 yrs ago - so, expanding rapidly. In Wave 3, we expand into the 6 key metro-markets of the North and Central West, thereby adding a new market that represents 15% of BZL’s GDP. It is vast and scarcely populated, where most people live in 6 metro markets to which we are expanding. Back-up: Strategic geographies get Competitive Home Delivery timings and costs, BSA support, and Full Field Engagement (KAM, training) Non-strategic markets get basic HD service, no BSA support, no Field Engagement Market expansion rank order: based on economic potential (measured by IPC Indice de Potencial de Consumo) Trigger for expanding into a market: sufficient leadership interest (1-5 Platinums), economic potential (IPC), DS potential (i.e. demographics), resource availability, Trigger for opening an ABC/Shop: 5-10 Platinums, $1M to $2M in sales
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A Fast Growing, and Young, Middle Class A Large Economy, Growing in Global Importance
Amway – Why Brazil? Large and Massive Growth Potential
2011 GDP Rank
1.USA
2.China
3.Japan
4.Germany
5.France
6.Brazil
7.UK
8.Italy
Brazil Population by Income Levels (%)
2006 2011 2014 2020 A/B
C
D
145M
E
30% between the age of 18-34
2050 GDP Rank
1.China
2.USA
3.India
4.Brazil
5.Russia
6.Japan
7.Mexico
8.Indonesia
GDP ($US) GDP ($US)
$2.5T
$9.7T
Sources: EXAME Publications 11
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A Core Market for Consumer Goods
A Top 5 Global Direct Selling Market
Amway – Why Brazil? Thriving Direct Selling Sector
Direct Selling Sales (US$ B) % Global Category Sales in Brazil
Sources: WFDSA; Euromonitor
30 24
16 13 12 6
US Japan China Korea Brazil Mexico
CAGR 13%
10%
2%
6%
Beauty Care
Health & Nutrition
Home Care
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Amway – Why Brazil? The People Factor
One of the most Entrepreneurial countries in the world:
Source:Amway Global Entrepreneurship Report 2014
Higher positive attitude towards entrepreneurship More eager to own their own business
Top reasons for wanting to start their own business
38% Independence from employer; being my own boss 36% Self-fulfillment, potential to materialize my own ideas” 27% Secondary, supplemental income 19% Better balance of career, family, leisure 10% Alternative to unemployment
Presenter
Presentation Notes
Key highlights and learning from the 2015 plan
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Amway – Why Brazil? The People Factor
An enormous Entrepreneurial potential
Source:Amway Global Entrepreneuship Report 2014
However, one of the highest “Entrepreneurial Gaps”:
51% Leadership and management skills (decision making, customer mgmt., leading/motivating employees)
43% Basic functional skills (finance, marketing, IT) 38% Business planning, scenario analysis, competitive analysis And more Brazilians (30%) have sought these skills through training, than the Global average (23%)
…and because key skills are missing:
…because the environment is not favorable:
∆ 38pp
Presenter
Presentation Notes
Key highlights and learning from the 2015 plan
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Summing it all up
It’s well known and documented that Brazil is a very challenging market, with Tax, Labor and Logistics burdens to address
What makes it a priority investment market for Amway are:
– Massive growth potential
– Thriving Direct Selling sector
– Brazilians’ Entrepreneurial potential
Presenter
Presentation Notes
Key highlights and learning from the 2015 plan
16 ver. 1
Brazil Economic Conference Amway’s Next Growth Target – The Entrepreneurial Potential of Brazil
Thank You!
Odmar Almeida Filho President, Amway Brazil
Oct, 2014
Presenter
Presentation Notes
Key in Region/Function name in Title page and in footnote (select View/Slide Master/; find Master Title Slide and edit text box at bottom left)
