IE Intercambio is a fast-growing study abroad agency operating across Brazil, that has benefited from both its idea to start a franchise network and the economic boom in Brazil. Its young President, Patrick Guimaraes, spoke to The PIE.
The PIE: How did you start in the industry?
PG: I started my company in 1997 and the first year of my company we didn’t sell any packages so maybe I should have given up after that year but I didn’t!
The second year we brought one programme to Brazil – work & travel – via the J1 visa programme in the USA; we were the pioneers of this programme in Brazil. That’s how we were different from the other companies. We registered the name Work Experience in Brazil so when people think about work experience programmes they think about our company.
The PIE: And what attracted you to international exchange as a business?
PG: I got involved with exchange programmes because I did my high school year with AFS in California in 1993 and after I came back I worked as a volunteer for AFS for six years and I fell in love with exchange programmes and also the opportunity to meet people from all over the world. .
The PIE: Was it hard in the beginning to start the business?
PG: Yes, very hard. Especially because we were competing with very big names and we were not from a main city. Our head office is in Vitoria and there’s a reason for this. Vitoria has a better quality of life so our staff members are happier to live and work there instead of living and working in huge cities like Sao Paulo or Rio de Janeiro.
“In the beginning I needed to lie about my age!”
As I said, during the first year I didn’t sell any packages so in the second year I invited my business partner, Eduardo, to join me. We were both law students so we met at the law school. We started a company called IE in March of 1998. I was only 20 years old at the time so I was really young when I started the company. It’s funny, in the beginning I needed to lie about my age! People used to ask me – How old are you? – I used to say 28 all the time. Now I want to be 28 again but I’m 35.
The PIE: And so tell me about IE’s growth, when did you decide to adopt the franchise model?
PG: We started with the franchise model five years ago. And we are seeing very good growth. We now have 39 offices. And, we expect to have 65 office in 2014 and this is because we have a very open relationship with all our franchisees. It’s very clear they know what we [do], they know their commissions so it’s a win-win relationship.
“Now we have 39 offices and that’s tremendous growth because three years ago we had 12”
The PIE: And why did you decide to go do the franchise route?
PG: We can select good people, local to that city and they have the local relationship in that city.
The PIE: That must be quite a challenge in Brazil because it’s such a big country.
PG: It is. In order to cover the whole country we would need to have 88 offices. One day we may get to this point. But we have a goal to have 65 by 2013. Now we have 39 and that’s tremendous growth because three years ago we had 12 offices. In fact we are slowing down the process slightly. We need to maintain the quality and we are deciding to open four new offices every semester.
The PIE: How do you maintain the quality of your partners?
PG: We invest a lot in technology; we do a lot of online training. We run a workshop with national and international partners once a year and we hold franchise meetings every six months. Plus our the operational manager visits the franchise offices every two months.
We also have a quality department that tries to investigate the level of satisfaction of our clients before they apply, after they apply, after they come back.
The PIE: We hear Brazil is booming. Is that the case? [more>>]
PG: Yes, the economy is really booming. We have what people call class C that’s a new middle class in Brazil, so we have 50 million people who can afford exchange programmes now, but two years ago they couldn’t.We’re expecting a growth this year of 30%. In the first two months we already grew business by over 35% and January and February are very slow months in Brazil because of Carnival!
The PIE: And in terms of where your clients are wanting to study and why?
PG: The main destination is Canada because the visa process is easier and there are study/work opportunities. Also the prices are cheaper than some other countries. The second is the USA, the third, the UK and the fourth, Australia.
“In the first two months we grew business by over 35% and January and February are very slow months because of Carnival!”
The PIE: And the visa system in the UK hasn’t put clients off too much?
PG: Yes a little bit because when they were allowed to start work it used to be better because a lot of students, especially university students they like to go to some countries where they can study and work [afterwards]. And this reduced the number of people who wanted to go to the UK.
But the UK is also very attractive for people. Once you go there to learn English you have the British accent so, it’s a very popular destination.
The PIE: How much of your business remains work experience?
PG: Years before 50% of our business used to be work experience. Nowadays not that much because the US economy is going down, people don’t go for the work anymore to make money.
The number one [area of demand] is language programmes and we are still seeing a very large increase for junior programmes, postgraduate courses and programmes for people over 40 years old. They used to think here in Brazil that only teenagers could do an exchange programme. Now they’re learning that they can do a programme also.
“Once you go there to learn English you have the British accent so, it’s a very popular destination”
The PIE: So are these rich Brazilians who don’t work?
PG: Yes, probably someone who’s already retired and they want to go and stay three months in a country and learn English and also do some extra-curricular activities such as photography. This sector is really growing.
The PIE: And how do you promote your brand IE Intercambio in Brazil?
PG: Yes this year since we are growing so much we are doing a national television campaign and also advertising in some national magazines. Now that we have a national brand with 39 branch offices we’re doing national marketing.
The PIE: And where do you see the future in the next few years?
PG: I think the market in Brazil will grow until.. I think the highest peak for exchange programmes will be in 2016.
The PIE: Why is that?
PG: We have done some research. Especially for class C, because we have a lot of people who don’t even know that they can afford exchange programmes or that is possible for them. So that’s why we are investing in telling them in national magazines and television so people can realise that it’s not so difficult (or expensive) to do.
“The main destination is Canada because the visa process is easier”
We offer payment instalments, which are very common for Brazilians so, Brazilians think that if they can afford the instalment, they can afford something. We were the ones who started to offer this instalment plan, we were very aggressive on this.
