Brazil, the largest country in both South America and the Latin American region. It’s the fifth largest country in the world by its population and geographical area. Brazil is of course known for samba, colorful festivals, and its energetic population. Also, Brazilian football is a touchstone for almost all football fans in the world. Many Brazilian football players, such as Pelé, Garrincha, Ronaldo, and Kaká, made history in World Cup Championships. Brazil is also known for its beautiful celebrities. Adriana Lima, Gisele Bündchen and Francisco Lachowski are only some of them. Even the president of Brazil is quite popular and loved by Brazilians.
Brazil is also a founding member of the United Nations, the G20, CPLP, Latin Union, the Organization of Ibero-American States, the Organization of American States, Mercosul and the Union of South American Nations. Brazil is a regional power in Latin America and a middle power in international affairs.
This beautiful, energetic country is growing without restraint. So how about Brazil’s economy?
- GDP: $2245.67 billion US dollars
- Growth: %0.10
- Brazil’s GDP value represents %3.62 of the world economy.
- Inflation: %5.9
E-commerce Market in Brazil
The Brazilian economy doesn’t shine in the same way, compared to a few years ago. It is far from the high growth rates before 2010 which came up to 7.5%. On the other hand, the e-commerce market continues to expand independently from the overall economic situation. The 5th country in the world for its internet usage, Brazil, had 99.4 million users online in 2014 with a %49.8 of internet penetration.
In 2014, the e-commerce market expanded at a remarkable rate of %24. According to e-commerce intelligence firm E-bit, 51.5 million unique consumers shopped online in Brazil, last year. 10 million of them have made their first purchase over the web last year. One of the most tempting marketing strategies, Black Friday, has contributed to last year’s growth. And the uncertainty about the economy prompted Brazilians to look online for better prices.
Top 6 Consumer Trends in Brazil
Over the last ten years, almost 30 million Brazilians have joined the middle class. This expansion in the middle class changed consumers’ behavior in time.
- Usage of credit and debit cards are growing in popularity and accessibility and mobile payments are on the rise.
- Consumers embrace sustainability.
- International influence on consumption habits is increasing.
- Consumers appreciate the popularity of social media, the internet and they focus on technology.
- Society’s dissatisfaction with government investment is growing.
- Growing middle class increases consumption levels.
Current and Future Stars of E-commerce Market in Brazil
Undeniable truth about the e-commerce market in the world is that the source of this rapid growth in Latin America’s market is led by Brazil. As we gave place to Magazine Luiza in our blog earlier, which is one the most successful online retail companies from Brazil, is a good projection of the e-commerce market’s performance. There are also many American e-commerce companies which take advantage of the boom in Brazil and in Latin America in general.
Also, as a conclusion of rapid growth in internet penetration proves that 2015 seems to be a big year for the e-commerce market in Latin America, Asia, the Middle East, and Africa. Brazil, as the fifth fastest growing e-commerce market in the world, will assertively protect its position in 2015, too. New ideas and solid management give many Brazilian technology companies a chance to thrive in 2015. According to Tech in Brazil, there are some special e-commerce web sites that we should keep an eye on. Dafiti, Hotel Urbano, GuiaBolso, Bebê Store and NetShoes are some of them.
M-commerce in Brazil
Last year, the e-commerce market in the world represented a tipping point in mobile commerce investment. Since mobile devices have easier access to every segment of customers, m-commerce became more and more popular. It is no surprise that the companies decided to follow this potential by investing. Failing to provide a mobile-friendly shopping experience could just place online retail companies in a really bad position. We can explain the boom in Brazilian e-commerce market with their performance in m-commerce too.
Brazilian mobile payment company, Pagtel and Mobi.life from the group E.life, asked 480 Brazilian mobile users about their mobile shopping habits. According to their study:
- %67 of Brazilian mobile users made mobile purchase in 2014. This number was %57 in 2013.
- 60% of Brazilian mobile shoppers used store websites, 37% used intermediate services like PayPal or Buscapé, 32% used app stores like Google Play and 24% used shopping application.
- 54% say they access banking services via smartphones and 22% use tablets for online banking.
How About Entering the Brazilian Market?
Brazil generates most of the Latin American e-commerce market. For example, 299 out of the top 500 e-commerce sites of the region are from Brazil and it has the %59 of the market. It’s also the largest mobile market in the region, with more cell phones than people. Yet, the cost of entering the Brazilian Market is much higher than the rest of Latin America. So if you are thinking about entering the Brazilian Market, here are the facts that you should know:
There are 7 different taxes, which are cumulative, on your income.
If you are an online store and decide to use cloud services outside of Brazil, be prepared to pay 40% on top of the invoice as an additional tax.
Brazilian law subject a condition of working hours. No one is allowed to work for more than 44 hours a week without receiving additional pay, and all employees are entitled to a 13th-month salary and 30 days of paid vacation per year, costing employers additional 40% in payroll tax.
The Top 10 Products That Brazilians Buy via E-commerce
Even though e-commerce is getting more and more popular in the world, we see differences when it comes to consumer preferences. In some countries, such as Argentina or France, travel products are the best-selling ones in their e-commerce market. Or in Columbia, statistics show that electronic products take place on the top. According to the Instituto Latinoamericano de Comercio Electrónico, clothes and accessories are the hot products in Brazil’s e-commerce market and it’s followed by:
- Cosmetics and perfumes
- Tech products
- Cell phones
- Home décor
- Sports and leisure products
- Toys and games
- PagBrasil is the premier online payment processing service in Brazil designed for Brazilian and international e-commerce platforms.
- According to PagBrasil, Brazilians tend to use national payment methods for about 90% of their online purchases.
- ”Boleto Bancário” is the leading push payment method for both businesses and consumers.
- Payments with debit cards and online transfer payment methods are growing in share.
- Debit cards were recently made available for online payments; therefore, it’s still a novelty for the e-commerce market in Brazil.
- By the end of 2013, 64% of all Brazilians over 18 years had a debit card, while 50% had a credit card, which underlines the importance of debit cards in Brazil.
Brazilian’s economy has been growing since 2006. It has been only 2 years that worlds 7th biggest economy have started to show a small pace. All in all, the growth of the Brazilian economy and the potential of the e-commerce market in Brazil are unstoppable.
Although entering the Brazilian Market is not an easy ride, it does offer big opportunities to grow really fast for those who dare. With a predicted online retail growth of more than 20% in 2015, Brazil will continue being one of the outstanding opportunities for online retailers in Latin America and the world, even though the market will be always tough.