eCommerce is on the rise in Brazil, with online retail spend increasing from $15 billion in 2010, to an expected $36 billion in 2016, which represents 4.3% of total retail spend in this market.
With these figures reflecting a substantial shift in consumer behaviour in Brazil, and with the country now ranking in tenth place for retail eCommerce sales worldwide, thanks to the expansion of consumer credit and an increased trust in mobile commerce, there is a significant opportunity for sellers across the globe to capitalise on this growing market.
Below we have compiled some top tips for selling into South America’s biggest eCommerce market, as well as an overview of the top Brazillian marketplaces you should be considering.
Tips for Selling in Brazil
Understand Consumer Behaviour in Brazil
As with any market, consumer behaviour will differ significantly and prior to selling into a new territory, you will need to do thorough research.
While the leading Brazilian marketplaces will have their own marketing and advertising options, and provide you with the ability to optimise your listings for increased visibility, if you are selling into Brazil from your own eCommerce site, it’s worth keeping in mind that Brazilian customers tend to start their product search on a search engine, and as such you should consider paid search options.
It's also worth considering that the most commonly purchased items include apparel, shoes, consumer electronics and books.
Research Payment Options
Payment preferences are also a key factor to consider, with over 30 payment options available in this market. It has been found that around 73% of all eCommerce transactions are made by credit cards, 18% by Boleto Bancario, which is similar to an invoice issued by a bank, and the remaining 9% are from other payment methods.
The good news is that for marketplace selling, you will be limited to the options that the marketplace supports, however you will need to investigate what these options are and what you need to know and do to prepare for selling into this market.
You should also be aware that it is common for Brazilians to finance their purchase by paying in instalments, and you will also find that the majority of marketplaces will support this.
As such, if you are selling directly into Brazil without the support of a marketplace, offering credit terms will be extremely beneficial to your business. We would, however, recommend investing in a payment service provider such as PagBrasil, which offers international merchants up to 12 instalments and an advanced pay-out of the entire payment amount, assuming 100% of the risk, should a customer fail to pay any of the instalments.
Test the Waters With eBay GSP
While we will cover some of the dedicated Brazilian marketplaces below, another way to reach this market is through eBay’s Global Shipping Programme. With over 200 million Brazilian buyer’s visiting eBay, representing 36% of all online buyers in South America, there is a huge opportunity for simply enabling international shipping to Brazil through your domestic listings. What’s great about eBay GSP is that they will fulfil your products, and will handle customer queries, taking full responsibility for any complaints regarding the shipment or delivery of the product(s).
Find a Reputable Logistics Provider
Brazil is still very much a developing market in the eCommerce landscape, and as such there are still some challenges to the country’s logistics infrastructure. We would therefore recommend that you identify a reputable logistics partner that is familiar with delivery in Brazil. It is also recommended that you effectively track your products.
What is certainly beneficial about this market, is that returns rates tend to be low at 4%, compared to other international markets, however as with anything this could of course change over time.
Understand the Tax Structure
Unfortunately, tax is a complex matter in Brazil, with taxes on imports ranging from 30% up to 120%, and it is important that you understand the total import costs to determine your pricing.
That said, with huge opportunities in the market, it is still one that should be considered as part of your international growth plans.
The Top Brazilian Marketplaces to Consider
Mercado Livre operates in 13 different countries, largely in Latin America, and is one of the most visited sites in Brazil, making it a great marketplace to consider.
The marketplace itself is referred to as the eBay equivalent in Brazil, and covers a wide range of product categories, including vehicle accessories, clothing, consumer electronics, sports and fitness equipment, and health & beauty.
It also has a range of options available to sellers, including Mercado Shops, which is their eCommerce solution, enabling merchants to create their own website, which is integrated with the marketplace and social networks including Facebook and Twitter. There is also the opportunity to advertise on their site, through their Product Ads system.
Mercado Livre further operate a safety payment system, MercadoPago, which is a benefit to both sellers, particularly international sellers, as well as the customers themselves. Specifically, by adding MercadoPago in your listings, as a seller you can enable buyers to choose from a range of alternative payment methods.
Americanas.com is another popular online retail site in Brazil, with more than 200,000 products listed, across a wide range of categories – homeware, fashion, consumer electronics, books, baby products and so on.
Owned by Brazil’s largest web merchant, B2W Digital Inc, Americanas.com has over 45 million monthly visitors, and provides a high-quality technology platform, consisting of a highly optimised checkout, search functionality, SEO capabilities and catalogue. The site also enables a high level of security, with fraud analysis conducted at the time of purchase.
To apply to sell on Americanas.com, merchants are encouraged to submit a supplier registration form, where they will then be assessed by the marketplace’s commercial team.
Due to being owned by the same company as Americanos.com (B2W), Submarino.com operates in a very similar way. Its innovation and technology make it a popular platform for reaching a Brazilian customer base, and with an extensive range of product categories – consumer electronics, fashion, homeware and even hotels and flights – it could be another great marketplace to consider.
The marketplace also operate a Submarino Card MasterCard, available to customers across Brazil, and the card’s many benefits further help to entice customers to the site.
Extra.com is another marketplace worthy of consideration, with over 26 million visitors per month, purchasing across a wide range of product categories. The site is owned by leading eCommerce player Cnova, who also operates leading French marketplace CDiscount, as well as other popular Brazilian marketplaces such as Pontofrio and Casas Bahia.
There are also no monthly costs or membership fee, however you should keep in mind that like with many other Brazilian marketplaces, customers on Extra.com do have the option to make their payments in instalments.
Casas Bahia, another Cnova marketplace, has a strong brand recognition in Brazil, with over 17 million monthly visitors to its site. While Casas Bahia traditionally specialises in furniture and home appliances, like the other aforementioned sites, the marketplace does also sell a wider range of products, including sports and recreation goods, fashion, watches and health and beauty products.
Ultimately, Brazil is a great option for any merchant looking to expand into a new market. Despite its challenges, it is a rapidly evolving market with significant opportunities for success.