Brazil E-Commerce: Why Selling On Amazon Won’t Cut It

Despite recent economic and political turmoil, the Brazil e-commerce market is thriving. It’s one of the fastest growing markets in the world, and the most important in Latin America. It’s not all plain sailing though. Here’s what you need to know to sell online in Brazil.

‘Brazil is not for beginners.’

This remark from the late, great Brazilian composer Tom Jobim is not something you want to hear when you’re launching your Brazil e-commerce site.

But it’s true. The Brazil e-commerce market is different – to succeed, you’ll have to significantly adjust your existing strategy.

It’s worth the effort though. The potential is huge.

In 2017, Brazil made up 38% of the entire Latin American e-commerce market. In the last 30 days alone, 45% of Brazilians bought something online. And by 2022, the market will be worth over $31 billion.

So don’t be put off. Not only is Brazil e-commerce financially rewarding now, it’s also a sound investment for the future. Taking the time to get it right will pay off.

Here’s how we’ve learned to dance to the Brazilian beat.

PAY PALS

Brazil’s financial infrastructure is very sophisticated, and works differently from many other countries. This affects how customers pay for online purchases.

In 2017, 64% of customers used credit cards to pay for online purchases. And half of e-commerce sales were paid for in instalments. This isn’t a quirk – Brazilian shoppers expect it. Even high earners prefer using their credit card to pay in instalments, as they can keep their money invested as long as possible.

If you’re a luxury brand, bear in mind you’ll need to change your customer profile. 70% of luxury products bought online are paid for using credit card instalments, opening up the sector to much of the middle class, who otherwise wouldn’t afford it.

This is an essential step to success in the Brazil e-commerce market – especially for more expensive products. If you don’t currently offer customers credit elsewhere, partner with a bank or adjust your payment structure to accommodate it.

All that said, Brazilians appreciate choice. Credit is king, but 16% of shoppers still use PayPal, and 20% prefer payment slips, probably due to concern about online fraud. So make sure you offer your customers plenty of options.

GO NATIVE

Brazil is a protectionist country and import taxes can be high for foreign brands. One way to get around this is by making your products in the country, or partnering with local manufacturers.

Of course, this will take time and research to get right. But if you’re making a long-term commitment to your Brazilian launch, it will keep costs down. Burberry, Apple and Nissan have all done just that.

English proficiency is low in Brazil, so localize both your e-commerce store and post-sales support into Brazilian Portuguese before going live. It’s not just a nice-to-have – it will generate more sales. 70% of Brazilians regard Portuguese support as important, and six out of ten would change brands for it. 16% even said they would switch to a brand with Portuguese support at any price point.

SAVE THE DATE

Black Friday. Cyber Monday. Christmas. Easter. Like the rest of the world, Brazilians spend big during the holidays. And they especially love holiday savings. More than half of Brazilians are price sensitive – for the right price, they’ll even change their brand loyalties.

Holidays and sales should therefore play a key part in your Brazil e-commerce strategy. But bear in mind the Brazilian dates for many traditional holidays are different from the UK:

• Valentine’s Day is 12 June.
• Mother’s Day is the second Sunday in May.
• Father’s Day is the second Sunday in August.

Several celebrations are also unique to Brazil, like Carnival (officially, the Tuesday before Lent, but celebrations can last for days) and Children’s Day (12 October). Add these dates to your calendar to give your marketing an authentically local campaign.

MARKETPLACE WARS

Thanks to improved internet connectivity, mobile commerce has skyrocketed in Brazil in recent years. The market is expected to double from $5 to $10 billion by 2021, making a mobile-ready app or site crucial to success.

You should also consider selling your products on the local e-commerce marketplaces. Netshoes, Americanas and Submarino are among the top online shopping sites used by Brazilians, and all of them come from Brazil.

But if you only sell your products on one e-commerce platform in Brazil, choose Mercado Livre. Known as MercadoLibre in the rest of the world, the Argentinian e-commerce site is wildly popular in Brazil, which accounts for over half its global revenue.

If you don’t want to commit to the Brazilian version just yet, you can dip your toe in the e-commerce waters by selling on MercadoLibre. The site uses a concept called Cross Border Trading, which allows international sellers to cover all the regions in Latin America.

Although Brazil is also a key market for e-commerce giants like Alibaba, eBay and Amazon, they’re not used as widely as the home-grown sites. Amazon is actually a relatively new player in the market. They only launched their full service in 2017. Before that, they just sold books.

FINAL THOUGHTS

Success in the Brazil e-commerce market comes at a cost. To make a long-term impact, you may need to rethink your business model to allow credit and give your brand an authentically local flavour. The short-term pain is worth the long-term gain, as the opportunity for your brand is huge – and just keeps getting bigger.

Setting up shop in Brazil? Get in touch. Our local team of market consultants can provide the expertise you need to establish yourself in the market.