Sunday 04 December 2016

The Phenomenon of Online Shopping in Brazil

This post was originally posted on consumerACTIONism, a blog by Edelman’s Consumer Marketers.

While mature market consumers have been very familiar to online shopping for many years, Brazilians are facing their ecommerce booming right now, a trend that has been started around ten years ago. It is estimated that Brazil has spent R$ 20 billion (US$ 11, 5 billion) with online purchases in 2011, 35% more than 2010, not considering car sales, airline tickets or online auctions. Last Christmas shopping grabbed R$ 2, 20 billion (US$ 1, 26 billion) of that amount, a seasonal record.

Ecommerce fast growth is not an exclusivity of Brazil. Forrester Research survey firm forecasts that the most traditional markets for online shopping – the United States and Western Europe – will lose ground for emerging economies by 2015. It is expected that the Brazilian share of this type of shopping will rise to around 3% of all world commerce – or USD 22 billion out of USD 702 billion – over the next three years.

Although this figure may seem small if compared to the size of the Chinese market projection -expected to reach 22% of all the ecommerce worldwide – Brazil is considered one of the countries with the greatest potential for online sales. Today there are 30 million people who shop online among 91 million internet users. Considering a population of 190 million people, the country development – the 6º biggest economy in the world – and the greater access of high-speed internet and smartphones, this market will surely take gigantic proportions.

Trends

Usually, the most common popular sold products online in Brazil are books, beauty and personal care items, electronics and fashion. But experts point out the evolution of this type of trade for other products in the coming years and also more niche segmentation.

Collective buying sites – such as Groupon, Clickon and Peixe Urbano – are huge in Brazil right now. There are over 1,200 companies selling deals that range from varicose treatments to sushi. This type of business started on 2010 and earned R$ 91, 4 million (USD 51 million) last December, and now the market goes through acquisitions and fusions movements.

Social networks also have a major impact on online purchases for Brazilians, as we are social creatures by nature. A recent case of success is the F * Hits female blog platform, which concentrate 25 of the top fashion and lifestyle bloggers in Brazil. They’ve launched its own e-commerce store, investing in the concept of “social commerce” where participants have support from their style icons to guide their acquisitions. To join this exclusive shopping club, users must be approved.

Big companies too are learning how to use online opinion leaders to leverage their sales. L’Oreal recently declared that a very important part of their marketing budget is dedicated now to blogs in Brazil – advertisement, goodwill events and sponsored content in the package.

Challenges

For foreign companies who want to invest in e-commerce in Brazil, one of the challenges to be faced is credit card frauds – 1% of all payment transactions online are fraudulent – and distribution logistic issues.

Still, there is a vast open sea for those who want to navigate the possibilities Brazilian web can offer.

Image credit: alles-schlumpf

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