Molzi's insights into Brazilian ecommerce


January 6, 2021

Since Brazil lowered trade barriers in the early 1990’s, trade and foreign investment have grown significantly. However, competition from international sellers still remains low on Brazilian marketplaces. This leaves Brazilian ecommerce as an untapped resource for major brands looking to expand their global reach.

Selling into Brazil is not so clear cut as selling elsewhere though. The Brazilian shopping culture is very different to what a US or EU brand might be used to and will lead advertisers and account managers to make edits to a listing that would entice shoppers outside Brazil but that does not capture the attention of the Brazilian consumer.

To prevent sellers from making the same mistakes as others before them have, we have put together everything worth knowing about the Brazilian ecommerce landscape and what to expect when selling into the 5th largest country worldwide.

Brazil – The basics
  • Brazil is the biggest country in South America and holds the largest population in Latin America at 211 million people. If you are able to create a foothold within Brazil, you will have access to one of the 10 most populous countries in the world.
  • It is important to know that Brazilian Portuguese is the native language. This has subtle differences between original Portuguese including grammar and spelling but a Brazilian consumers will notice it straight away and most likely view the product as dodgy. It is also important to note that some English words have been adopted as part of the language so it is best to ensure that you use a translator who can transcreate your listings or risk your products reading in broken Brazilian Portuguese.
  • Over half of the population is Roman Catholic so it is imperative to consider how your content may read to such a religious audience. On occasion, international brands have unintentionally insulted entire communities due to misunderstanding cultural relevance. Doing so will affect brand sales but may even have a lasting impact on your reputation within Brazil for years to come.
Brazilian ecommerce
  • There are approximately 112m digital shoppers in Brazil which is approximately 66% of the entire Brazilian population. This is expected to rise to 123.4m by 2024 and make up almost 70% of Brazil’s population.
  • With the number of Brazilian digital shoppers increasing by 10% by 2024, it is evident that Brazil is becoming an ever more fruitful market to sell into. In fact, Brazil accounts for over 1/3 of all Latin American ecommerce sales.
  • Brazilian eCommerce revenue is actually growing much faster than expected. It was forecasted to reach $21B by the end of 2020 but reports indicate that it will in fact make $27B. By 2024, there will be an increase of ecommerce sales by 60% and Brazil is reported to accumulate  $43.29B in retail ecommerce sales.
M-commerce in Brazil
  • Brazilian mobile ecommerce accounts for over 1/3 of online transactions. This year, it made up 42% of total Brazilian retail ecommerce sales and by 2024, it will make up 48.5%. Brazil accumulates the largest m-commerce sales within Latin America. This year, it is estimated to make up 36% of overall LATAM Retail m-commerce sales but will increase to 40% by 2024.
  • Brazilian consumers are becoming ever more mobile-focused. Brands who consider mobile first are guaranteed to see increased sales than those who do not. In fact, 78% of Brazilians say they prefer to buy via an app over any other payment option due to the channel’s speed and simplicity. International brands who focus on the mobile shopper will ultimately see more conversions because customer experience will be better.
Brazilian ecommerce shopping behaviours
  • Brazilian consumers are generally more conservative with their spending than other countries. They tend to have more reservations when buying goods online that aren’t essential. However, pricing plays a massive part in swaying their concerns. Over half of Brazilian shoppers are influenced to shop online when offered vouchers. This means promotions are integral to success in Brazil.
  • Brazilians also place great emphasis on the benefits that they are getting from a product. This means on page content must be focused on the benefits of the SKU.
  • It should also be stated that Brazilians are generally loyal to a brand if they have found one that they enjoy. Pricing becomes less of a sore point once consumers know that they like what they will get.
Seasonal holidays to keep in mind
  • Carnival (12th-17th Feb)
  • Valentine’s Day (June 12) – different than in Europe
  • Black Friday (26 November)

Molzi Tip – Different local holidays are celebrated in different parts of the country. The south of Brazil, with its long history of German immigration, marks Oktoberfest whilst Brazilian folklore influences the festivals of the northern part of the country.

Brazilian marketplaces & logistics

The largest ecommerce sites in Brazil based on estimated monthly visitors (as of September 2020)

  1. Mercado Livre – 237.9 million
  2. OLX – 25 million
  3. Americanas – 98.5 million
  4. Amazon Brazil – 93 million

The top 3 most popular Brazilian e-commerce categories in 2019

  1. Fashion – 49%
  2. Electronics – 37%
  3. Beauty, Perfume & Health – 24%
  4. Grocery – 21%
Amazon Brazil

Amazon Brazil holds the most successful Prime user % growth in Amazon history. The membership in Brazil has grown by a massive +80% since Prime became available in Brazil in 2019.

This is, in a large part, because Prime provides several benefits for one price. Amazon Prime in Brazil consists of full access to Prime Video, Amazon’s music, games, books and magazines and most importantly free shipping. Approximately 43% of Brazilians are encouraged by free shipping options which Prime provides. Moreover, the membership costs much less than it does in the US, again making the service seem a bargain.

Molzi Insight: Due to its close proximity to the US, Brazil tends to mirror similar trends seen within the United States. With this in mind, Amazon is likely to become an ever more popular platform for Brazilian shoppers.

Taxation

International merchants should be prepared to for significant tax and regulatory hurdles, including high import duties in Brazil. Taxes on imports range from 30% up to 120%, so it is important to understand the total import costs to determine overall product pricing.

Due to the size of the country, current transit times for packages, once the product arrives in Brazil, can range from 3-70 days depending on where customers reside. Shoppers who live within a major metropolitan area such as São Paulo tend to expect the same fast delivery that US & EU citizens do. However, those living in the ‘interior’ (rural areas) are accustomed to longer delivery times. Brands should therefore not see a long wait time as a deterrent to doing business in the centre of Brazil as rural consumers are aware of the longer wait, some of which can take as long as 2 weeks.

The effect of COVID-19 on Brazilian ecommerce

It would be remiss not to mention the impact that the global pandemic has had on Brazilian ecommerce this year. Brazil was originally struck hard with the virus and became the first Latin American country to report a confirmed case on February 26. The country’s varying lockdown measures, which include the closure of nonessential businesses, have had a significant impact on the country’s retail industry.

Brazilian commerce grew 40% during the first few weeks of the pandemic and the number of new online shoppers has grown an extra 12%, due to lockdown. Due to this, there is a 65.7% growth in online orders this year that has been credited to the effect of the COVID pandemic.

Categories that have show the most expressive percental growth since COVID-19 were Food, Pets, and Beauty. However the most popular categories have been Pharmacy & Health (67%), Grocery (65%) & fashion (44%)

Despite lockdown, 86% of consumers in Brazil are still intending to prioritize online shopping and do not intend to lower their expenses for Christmas 2020.

Brazilian ecommerce and Molzi

With an office located in Brazil , we have employees on the ground that understand Brazilian culture and the know how to ensure your sales there are a success. With fluent Portuguese speakers to ensure that copy is transcreated for a Brazilian audience, selling into Brazil has never been more easier with the help of Molzi.

Bridget Morrow, Chief Client Officer

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