DEKO Persists in the Market of Brazil

From Retail to Wholesale

Brazil features huge market capacity and economic development potential and this country is a market worthy of international business opportunities. Brazil is the country with the largest area, the largest population, and the most comprehensive resources in Latin America. According to a survey report, power tools and hardware tools account for a large proportion of Brazil's imported products from abroad.

Status Quo

DEKO is a scaled producer of power tools, tool kits, welding equipment, and measuring tools serving homeowners, DIYers and professionals. Brazilians are no strangers to the DEKO brand. DEKO TOOLS first entered the Brazilian market by running direct-operated online stores on the e-commerce platforms--Mercadolivre and AliExpress.

From the analysis of the market environment of hardware tools and power tools, Brazil is in demand for both high-end and cost-effective hardware tools and power tools. Also, Brazil is a price-sensitive market. Most manufacturers and consumers regard price as one of the primary considerations for purchasing hardware tools and power tools. Therefore, hardware tools and power tools exported from China to Brazil are very popular locally due to their attractive price. Thanks to DEKO’s approved quality and reasonable price, DEKO hardware tools and power tools managed to find a rightful place in Brazil, where this brand has succeeded in competing with many other leading tool brands.

Future Development

Power tools only with price advantages are easily eliminated in the increasingly competitive Brazilian market. The users of power tools in Brazil are mainly professionals and factories. If their power tools stop working, they are accustomed to sending them for repair. Brazilian people attach great importance to the after-sales service of the power tools. After-sales services are favorable for opening up sales channels and DEKO provides consumers with a two-year warranty. During the warranty period, DEKO provides consumers with free maintenance services and spare parts to extend the service life of tools.

In a world that features so many competitions, selling power tools and hardware tools in only one method can be regarded as self-destruction. Up-to-date companies are aware of this and innovate with the help of local tool distributors or wholesalers. So does DEKO. Transforming from only running online tool retail shops into working with local tool distributors and wholesalers is a bold move for DEKO TOOLS. However, local tool distributors and wholesalers are more familiar with the local markets and they have more credibility among local people.

Driven by Brazilian manufacturing companies to improve production efficiency and product competitiveness, the purchase of hardware tools and power tools with higher technological content is bound to increase gradually. In addition to the cost-effective performance, DEKO invests in R&D. As we all know, lithium-battery cordless power tools and brushless power tools will become the future trend of cordless power tools. DEKO strives to keep up with the next generation and developed both cordless brushed series 20V UNV and cordless brushless 20V DXBL series. What’s more, the main parameters of DEKO can be compared with the international power tool brands in terms of maximum speed, torque, weight, price, and warranty period.

Background Information

From the perspective of market application, the wages of Brazilian plumbers, painters, carpenters, and other laborers are cheaper than those in Europe and the United States. Generally speaking, if the house needs to be repaired or renovated, Brazilian families generally entrust the decoration company. Only 10% of Brazilian families are used to renovating their houses by themselves. Therefore, ordinary families have less demand for power tools. They are generally used to purchasing hand tools. Men mainly buy screwdrivers, wrenches, hammers, saws, etc., while women mainly buy small gardening tools such as shovels and sprinklers.

Power tools are mostly purchased by professionals and factories, and are mainly used in the construction, automobile and furniture industries. Brazil's automobile manufacturing industry is very developed. There are nearly 80 million vehicles and nearly 90,000 auto repair shops in the country. It is one of the main markets for hardware tools. In addition to the large scale of the automobile manufacturing industry, there are 16,000 furniture manufacturers in Brazil, half of which are concentrated in Parana, Santa Catarina and Rio Grande do Sul states in southern Brazil, and the demand for related hardware tools is also very large. The construction, automobile and furniture industries in Brazil have a considerable demand for hardware products and power products. The main sales channels are traditional retailers, building materials and hardware chain stores and supermarket chains.

According to the data released by the Brazilian Tool Industry Association, there are currently about 150,000 manufacturers, wholesalers and retailers in the Brazilian hardware industry, mainly located in the southeast of Sao Paulo and Rio, of which there are about 2,100 manufacturers in Sao Paulo state.

From the perspective of sales channels, Brazilian hardware tool and power tool manufacturers and importers usually use salespeople or websites to sell their products to traditional retailers, chain stores and supermarkets.

Traditional hardware retailers: There are 105,000 building materials and hardware stores in Brazil, 78% of which are small hardware retailers with a store area of less than 1,000 square meters. 72% of Brazil's building materials and hardware sales come from small and medium-sized hardware retailers, which are the main sales channels for building materials and hardware.