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Brazil: e-commerce growth set to double by 2019. Can your business take advantage?

With over 209 million citizens Brazil is the most populated country in Latin America, and it’s growing fast. Annual online shopping turnover in Brazil is increasing year on year at an astounding rate, from £4.4 billion in 2011 to a projected £10.4 billion in 2016.  This rate of growth is set to double by 2019, providing some excellent opportunities for UK businesses to start shipping their goods down to the South Atlantic. One of the key questions they’ll need to ask, however, is how Brazil interacts with the online world as a nation.

Brazil’s overall internet penetration currently stands at 56.8%. Compared to the UK’s 92% penetration, this may seem low but that figure represents 117 million Brazilian consumers. All things considered, Brazil is now the third biggest internet user in the world.  By 2019, it is forecast that Brazil’s internet penetration will be at around 60.2% and climbing[1].  This is good news for businesses looking to explore the marketplace.

A TNS Infratest survey commissioned by Google in early 2016 asked 550 respondents aged 18 and older how they preferred to access the internet. Of those respondents, 59% said they would rather use a smartphone or tablet, with only 12% preferring to use a desktop PC or laptop. This means businesses aspiring to enter the market will need to ensure that websites are mobile-friendly, and that all marketing collateral is fully responsive.

E-commerce grows despite consumers’ online security concerns

The risk of fraud and lack of security in online shopping is a big concern for most Brazilian consumers. It’s therefore crucially important to consider online security measures when marketing any products or online services, allaying any fears consumers may have. Despite this very genuine concern, E-commerce sales still account for 3% of all retail sales, and this figure is expected to rise by 0.2% year on year until 2019.

“The risk of fraud and lack of security in online shopping is a big concern for most Brazilian consumers, the security measures applied by the e-commerce companies is of great importance to ensure online buying potential.” Gabriella, Oban LIME (Local In-Market Expert), Brazil

It’s clear that many Brazilians are still apprehensive about shopping online, more so than here in the UK. Brands should consider a strategy that actively seeks to establish trust, perhaps even getting an accredited security standard such as Blindado, which includes a logo showing when the site was most recently tested, and displaying these on site.

Ability to pay in installments is almost ubiquitous

In Brazil, anything can be bought with credit cards and paid off in installments, from clothes and luxury toiletries to furniture and white goods. These purchases are often interest free and installments for something like a £100 pair of jeans can be spread out over a period of months. While new businesses will need to think carefully about how they position their price points, this does potentially offer an effective niche to be capitalised on.

Just over 60% of all household appliances in Brazil are bought online, making it the dominant e-commerce category in 2016. Clothes, consumer electronics, and luxury beauty products follow closely behind. This makes Brazil’s market fertile ground for businesses operating in these sectors, particularly with e-commerce set to double in the next 3 years.

The range of products consumers expect to see in Brazil is also very different to our expectations in the UK. For example, UK shoppers expect a huge variety of options from Amazon, but in Brazil, Amazon is used for games, books and apps only. This is a prime example of an existing brand that has had to market itself in a different way to make things work in Brazil.

Brands that have adapted to the Brazilian marketplace

According to UK Trade & Investment (UKTI), 400 of the world’s 500 largest companies operate in Brazil, including many UK businesses such as Rolls Royce and Experian, but what about online retail?

Amazon is currently the 6th most popular brand on Twitter in Brazil, with 2.47 million followers, despite only offering games, books and apps. This is largely due to some large budget video campaigns which play right into the hands of consumers. Brazil has the second largest number of YouTube users in the world, with 69.5 million registered users as of May 2016.  With language barriers an obvious challenge, this provides a mainstream route into market for British and US brands. Nissan, Burger King, Visa and Whirlpool all penetrated the Brazilian market with large video campaigns. More recently, Nissan has introduced a campaign on TV and online featuring Huck, a high-profile Brazilian talk-show host.

Hellmann’s, Colgate and Coca-Cola are examples of non-native brands that have also experienced huge success in Brazil with a strong focus on television ads (still accounting for two-thirds of Brazil’s overall ad spend).

Key takeaways before going to market:

  • Video is huge: Brazil has 69.5 million YouTube users, second only to the USA. Use Google’s display network to reach audiences.
  • Think mobile first: Only 12% of Brazilians prefer to shop on a desktop or laptop.
  • Take security seriously: Consumers need to be reassured about shopping online.

 

Contact us today to see how we can help your business explore new markets like Brazil.

 

[1] Brazil; Statista Market Analytics; 2015 to 2016  (https://www.statista.com/statistics/292757/brazil-internet-user-penetration/)