According to AVIXA’s Market Opportunity Analysis Report (MOAR), more than 80% of AV buyers in Brazil are poised to increase capital investments in the second quarter, with nearly half increasing spending on software and audio equipment.

Yet the context for this optimistic perspective is a region with a GDP expected to grow at 1.7%, in 2024, according to the World Bank. The factors of increased national debt, and the threat of recession, are countered by investments in infrastructure and education, as well as corporate competition.

The AV market is dominated by integrators and distributors except for displays, especially LEDs, which a handful of manufacturers produce in Brazil. The integrators range from a few large and medium-sized companies with greater than $5 million in sales to hundreds of small firms. A number of distributors represent imported brands and there is an active online market for direct purchase by end users.

Economic and market factors make Brazil a low-priced environment, with manufacturers and distributors constantly having to promote quality despite what users perceive as high prices. This trend is exacerbated by a complex and expensive import tax structure that detracts from margins. The integrators do not help this situation as they often build their margins on product rather than services, so end users do not see the services value and push back on product price.

Another factor is the influx of low-cost brands from China and elsewhere that are marketed as the same function at one-tenth the price. Not knowing the difference in quality, end users favor the lower cost.

The impact of the pandemic did not help. It drove the need for AV infrastructure but at low-cost, driving volume but not price. In today’s post pandemic “new normal,” Brazilians are going back to the office and live events are coming back gradually generating renewed demand.

According to the MOAR, more the 50% of AV end users in Brazil are investing in conferencing and collaboration, most of them in corporate offices. The second quarter data tracks with consistent patterns, where corporate is the largest AV market, followed by government, and education. In business, the emphasis is on having a quality collaboration capability to present to partners, rather than internal support. Such variations are to be expected in a cost sensitive environment.

IT is playing an increasing role in AV in Brazil, with most of the AV technicians reporting to IT rather than operating in their own department, according to the MOAR.  Regarding decision-making, however, purchase decisions are most frequently made by the owner, president, or CEO.

Many of the common trends in AV pertain to Brazil, as do a particular set of challenges that those in the market have become expert at overcoming to maintain steady growth.