The e-commerce market in Brazil is huge, but companies aiming to operate in the country must understand peculiarities regarding buying habits and Brazilian payment methods.
The Brazilian e-commerce market is the world’s tenth largest and the largest in Latin America, with over 120 million purchases in 2018. The average ticket is above US$100.
According to a study conducted by Webshoppers, online purchases grew 12% in the first half of 2018 compared to the prior-year period. The study by Ebit/Nielsen was published by Exame, a leading business magazine in Brazil. However, companies from abroad that want to capitalize on Brazil’s vast marketplace must understand how Brazilians pay when buying online. The most important factor is that 95% of e-shoppers use local payment methods, which enable them to purchase anything from a local e-commerce site in local currency.
On the other hand, when a Brazilian e-shopper wants to buy directly from a seller located, for example, in China, Canada or the United States, they will need an international credit card, which 95% do not have. Is this an insurmountable problem? No. The good news is that there are payment solution providers that enable international sellers to charge in Brazil, in local currency, just like local businesses.
That is how some of the world’s most popular and growing businesses, such as music streaming services, electronic e-commerce and SaaS, operate. They find a local payment partner (gateway) and FX bank that enable them to sell their goods and services in local currency, so that people can pay using local credit cards, as well as other payment methods, such as debit card and bank payment slips.
In short, foreign companies seeking to expand their offering to Brazil without adapting to local payment habits can sell only to one out of 33 online consumers, while those who activate local operations can reach the other 32 as well.
Is there room for growth?
Clearly, the Brazilian market is an opportunity for any e-commerce or SaaS company. Although from time to time the country experiences economic headwinds, not all recent crises have been strong enough to keep e-shoppers from buying more and more. According to Webshoppers, 55 million internet users made purchases online in 2017, up from 48 million in 2016. In the case of cross-border e-commerce, over 20 million Brazilian made purchases from international e-commerce platforms thanks to new local payment solutions. Is there room for growth? Definitely. Some 65% of Brazil’s population of 210 million has access to the internet and the country is one the most engaged in social media and mobile browsing.
The growth of the e-commerce market is not as dependent on macroeconomic variables as the commodities market, for example. This phenomenon is likely due to the profound change in consumers’ shopping habits. With access to a smartphones, consumers now have the convenience of the internet to make purchases. In other words, people continue to migrate from physical to online stores regardless of what happens at the macroeconomic level.
Many industries also have accomplished outstanding results. Simplo 7, a specialized e-commerce platform, reported top performers in two different industry rankings.
The first ranks marketplaces by sales volume growth:
Fashion and accessories: 14.8%;
Perfumery and cosmetics: 12.2%;
Home decor: 10.6%;
Home appliances: 10.3%;
The second ranks marketplaces by revenue growth:
Home appliances: 18.8%;
Home decor: 8.3%.
Brazilian e-shoppers’ appetite for e-commerce and mobile apps continues to grow. To really tap this potential market of over 70 million e-shoppers, online international merchants should better understand the local payment dynamics to make the most of the country’s sales potential for years to come.