Small Businesses in Brazil Seek Ways to Reach Loyal Customers

RIO DE JANEIRO, BRAZIL – For years working as a popcorn vendor outside two schools in Brasília, Adilson Campos, 36, was taken by surprise on March 12th, a Thursday, when he left home with his cart and found the doors of the educational institution closed.

The decision taken by the governor of the Federal District, Ibaneis Rocha, to fight the spread of the coronavirus, caused the overnight extinction of the only source of income for Adilson, his wife, and his two-year-old daughter.

“At the time there were still few cases, I believed that in two weeks the schools would reopen and today I have no idea. Even when the children come back, I think people will be afraid. How will they eat popcorn on the street if they need to wear a mask?”, wonders the popcorn vendor.

To survive these almost two months without work in the midst of the pandemic, Adilson relied on a support network set up by the students’ parents. “We eventually became friends and they called me wanting to help. At first they were making donations, but those of us who are used to work don’t want to get paid for free, right?”, he explains.

That’s when they suggested that he should start a credit system for the future. “People pay me, and I keep score on a little list. It’ll be a pleasure to deliver all that popcorn when everything’s back to normal. It’s due to their help that I’m not struggling,” says Adilson, who has so far been unable to receive the R$600 emergency aid from the government. “The request is under consideration, but I don’t think it will ever be released”.

Just like self-employed workers, small and micro businesses have also sought solutions so that they – particularly the non-essential ones – survive with the help of an already loyal clientele.

A survey by the Brazilian Micro and Small Business Support Service (SEBRAE) released in April, which interviewed 6,080 entrepreneurs from all over Brazil, showed that in addition to difficulties in accessing credit, small businesses also face a drop in revenues.

Approximately 88 percent of the entrepreneurs interviewed saw their sales drop, with an average loss of 75 percent. The study also showed that more than 62 percent of businesses either temporarily suspended activities or permanently closed their doors. Among the 38 percent that remain open, most have changed their operations, implementing deliver only, operating exclusively online, or adopting short working hours.

To circumvent this moment of such sharp drops in revenues, entrepreneurs in the food and beauty sectors invest in vouchers and discount coupons to be used when the confinement period is over and in online fundraisers.

L’Oréal Professional Products, in partnership with Trinks and Stone, launched the website “Beleza Amiga #juntospelosalão”, which offers the early purchase of vouchers to be used in registered salons when the period of social distancing ends.

In the food sector, several collaborative platforms are also trying to sustain establishments with cash flow. The website ‘Apoie um Restaurante’ (‘Support a Restaurant’), for instance, includes more than 3,500 establishments throughout the country and grants a 50 percent discount on consumption after isolation.

Developed by Stella Artois, the project allows customers to purchase R$100 (US$20) vouchers paying only R$50, as the beer brand will cover the difference to the establishments. Along the same lines operates ‘Ajude um Boteco’ (‘Help a Pub’), in which Bohemia will grant discounts of up to 50 percent on the purchase of vouchers to the over 10,000 registered bars.

The ‘Bar do Biu’, in the West Zone of São Paulo, was founded more than 40 years ago and is currently trying to overcome the impact of the crisis created by the pandemic, but it is struggling. At first, the bar decided to open a delivery system, which was previously non-existent but did not have much demand.

“Demand was scarce and I was forcing 12 employees to take risks on public transports. The cook, Dona Edi, who is my mother, was also worried because she is over 60 and is in the risk group for coronavirus infection. So I decided to close down,” says Rogério Gomes da Silva, owner of the bar along with his parents.

The establishment is registered in ‘Ajude um Boteco’ and has already sold 41 vouchers, totaling a collection of R$4,050. “It’s money that will help pay the fixed costs, like rent, until we are able to reopen again. I’m making a loss on products I bought, but I’m selling the drinks at cost price through Whatsapp. I’ve offered it to friends, I’m working by word of mouth,” he explains.

The 12 employees’ contracts were suspended by the owner through the government’s BEM (Emergency Benefit) program, which will pay unemployment insurance to workers in micro and small businesses.

Chef Izadora Ribeiro, of Isla Café, has bet on a collective fundraiser to preserve the restaurant. She launched the ‘Cozinha de Combate’ (Fighting Kitchen) project, which helps needy communities and, in turn, keeps the establishment running, even if at no profit.

The goal is to produce more than 12,000 meals and distribute them to street dwellers in downtown São Paulo and also to vulnerable people in the Brasilândia favela. In April, more than 3,500 people were fed with donations ranging from R$20 to R$600 and the establishment was able to pay the employees and fixed costs. In May, three other restaurants joined the project.

The crisis faced by bars and restaurants also reflects on the companies supplying fresh food. ‘Mar Direto’, which sells fish and seafood to famous establishments in São Paulo, had to reinvent itself when the demand for restaurants plummeted.

“Only ten percent of restaurants are left,” says Domingos Fiorino Llorca, one of the partners of the 15-employee company. The solution was to sell smaller quantities on delivery.

“I had friends, kitchen chefs who called saying they wanted to help, that they could buy the fish from us instead of going to the supermarket. So it’s all by word of mouth, using Whatsapp, and afterwards we created an Instagram account,” he says.

The concept of starting to sell to customers at home was not new. However, Domingos explains that there is currently no profit from the operation, but he hopes to increase sales. “We’re a short-legged mouse trying to climb a step. We used to sell 15kg to a restaurant in one day. The dynamic has changed,” he adds.

Businesswoman Luísa Souza Santiago, 31, had to reinvent herself to survive in coronavirus times. She and a partner own a party dress rental company, a store in Belo Horizonte and another in São Paulo.

“We started a bazaar of semi-new dresses that we rented and decided to sell them to have some revenue. As the prices are inviting, it ends up attracting more people”, explains Luísa. Part of the profit will also be allocated to charities. The company started to provide a personalized service via video call for questions.

With a drop of more than 70 percent in sales, the entrepreneur also decided to launch a brand with a product that is more accessible and easier to sell. She began to sell online a skirt that can be worn on a daily basis.

“It is a cheaper piece and was another way to raise cash and maintain the service and sewing employees. Our goal is not to give up, get through this moment, keep the employees engaged and optimistic, we are putting all our efforts into maintaining the jobs”.

Luísa knows that the pandemic has removed from the agenda the parties which drive her business. “We won’t have crowds anytime soon,” Luisa acknowledges. Creativity is the only chance to survive for now.

Source: El País