Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week we head back to Brazil to learn about international eCommerce opportunities from Ebury’s CCO, Fernando Pierri.
Expanding a company is no easy feat – in order to be a global success, the need to understand each individual market is of paramount importance. Guidance into a market is often reserved for established institutions, making it harder for SMEs to grow at the rate they wish – however, Ebury looks to ease this struggle. It specialises in international cash management solutions including cross-border payments, FX risk management, and business lending, with its product offering helping businesses accelerate and simplify international finance.
With over 25 years of experience in the financial space, with experience in various markets across the globe, The Fintech Times sat down with Ebury’s CCO, Fernando Pierri to understand how the pandemic has impacted the global eCommerce trading market for SMEs and how the company plans to help.
Can you tell me about your role within the company and about Ebury.
I joined Ebury in March 2020 after spending almost 25 years working for different banks. I met with our CEO Juan Lobato on his trip to São Paulo and I was impressed by how he was developing a fast growing business around the globe and I thought we could do the same in Latin America starting with Brazil. In less than a year he invited me to run the sales team globally and the experience so far has been amazing.
Last year, myself and Claudia Bortoletto – Brazil’s country manager – were able to establish Ebury’s operations within Brazil as a gateway to the wider Latin America market as part of the Groups’ global strategy of reaching and expanding into new geographies where there is untapped demand for our services.
We now lead a team of 16 employees in São Paulo helping SMEs navigate the Brazilian market in their international activities.
What makes the Latin American market so different to Europe and why do so many companies want to get involved in it?
Latin America is an emerging market which offers great opportunities for European companies who are established in their market to invest and grow their business.
Significantly, it is also the fastest-growing region in the eCommerce market with a dramatic surge prompted by the pandemic. Brazil is the leading country driving this growth with Mexico and Argentina also seeing rapid developments in the sector.
Given that eCommerce is growing from a low base here we expect to see further penetration as more businesses set up to take advantage of this demand and more digital buyers emerge as e-commerce increasingly becomes the norm.
China is the biggest trade partner in this sector but there are great opportunities for European companies too to capitalise on this emerging trend. Ebury connects the Brazilian markets with these foreign sellers to increase access to the region and provide digital payment solutions to support their treasury needs.
What are some problems SMEs have historically encountered when trying to enter the LatAm market?
The Latin America market is heavily regulated and therefore is a more complex business environment than Europe or North America. This is obviously particularly true for businesses that are new to the region and therefore unfamiliar with these regulations and local practices.
Meanwhile, the traditional banking providers are increasingly withdrawing from the SME segment, making it even harder for these smaller businesses to access Latin America as it had previously been difficult and expensive to find trusted support.
Brazil also has a very volatile foreign exchange market which can expose businesses to the risk of damaging FX fluctuations while there are further specific operational and fiscal difficulties for European businesses to overcome.
This is why it is so important for European SMEs to have access to a specialist FX partner with a presence both in Latin America and the continent to support their activity.
How does Ebury simplify the complicated market for SMEs?
Ebury’s mission is to provide expert support for SMEs to satisfy their corporate banking demands given that traditional banking providers have started to retrench from this sector in favour of providing these services just for larger clients.
Our proposition is bespoke to individual clients and Ebury prides itself on the customer support we deliver with our extensive web of offices around the world ensuring that businesses can rely on local knowledge in all major financial centres.
The office in São Paulo is dedicated to supporting SMEs with their international activities in Brazil by creating a dedicated team with a deep knowledge of the market.
Bringing this expertise to businesses helps them understand and enter the Latin America market whereas it may otherwise have been too expensive or complicated to do business here.
What do Ebury’s roadmap and growth plan look like?
Our first step in entering into a new and complex geography was opening up the São Paulo office so that we were able to get plugged into the Latin America market. Since getting boots on the ground last May, we have proven that there is a strong demand and need for the services that Ebury provides.
For example, we initially concentrated on importers and exporters but our services are increasingly relevant to the eCommerce market, especially businesses and platforms with cross-border activities. We are also working to introduce our hedging solutions to clients working in the region to mitigate their currency risk and give them greater confidence to invest in their operations in Latin America.
Geographic expansion is a core component of Ebury’s global strategy as local expertise is so vital to the market-leading customer service we offer. As such we are constantly on the look-out for additional countries to establish a physical presence; the next stage of our growth in Latin America could be an office in Mexico to create a physical bridge between the region and the US.
Has the pandemic impacted the LatAm sector any differently to other regions? If so, has it benefited from this or not?
Latin America is facing broadly the same global macroeconomic headwinds affecting most other regions.
There are major economic and social changes as the world begins to wake up following the devastating impact of the pandemic, although emerging variants are a continued source of uncertainty for businesses.
Specifically relating to trade, the pandemic has driven rocketing worldwide shipping costs and volatility in supply chains which have impacted both importers and exporters.
These difficulties have only emphasised just how important it is for businesses to have expert partners situated across the world who can advise and support on a wide range of issues from FX risk management to full-service treasury solutions.
As we continue to move out of the pandemic we are looking at a normalisation of these factors which should hopefully drive a further boom in international activity.
