Brazil is the largest economy in Latin America and continues to experience rapid e-commerce growth, with a 16% year-over-year increase in 2021. While it is estimated that the global e-commerce market will grow more than 55.3% by 2025, reaching a value of more than $8 trillion, the Brazilian e-commerce market alone is expected to grow by 95% in the same period, reaching a combined transaction value of $79 billion.

Brazilian shoppers have embraced the convenience and special promotions often offered through e-commerce, creating opportunities for online stores to explore new possibilities for customer loyalty. Though 2022 posed great challenges due to the global economic climate, e-commerce became one of the main channels for engaging the Brazilian consumer.

The self-service segment (entertainment, tourism, durables, non-durables, and perishables) registered the highest growth in number of total orders and gross revenue; however, electronics remain the most popular e-commerce segment in terms of sales, representing 43.1% of all sales in 2021. Second in total number of orders is appliances and furniture (28.2 %), followed by fashion (10.3 %), health, cosmetics, and wellness (7%), home decor (5.5%), supermarket food and beverage (3.9%), and books (2%). Brazilians prefer to make online purchases via their smart phone rather than by computer, and the average purchase by Brazilians in goods via a smart phone is around $80.

The pandemic is the primary reason for such tremendous growth in online purchases.  The Brazilian government issued pandemic relief via digital wallets, providing millions of Brazilians with access to online retailers for the first time. The Southeast region of Brazil, where São Paulo and Rio de Janeiro are located, is the most important region for sales in Brazil. Together, this region has contributed 51% of the e-commerce market’s growth.

The primary reasons Brazilian consumers shop online include:

77% - Best Price

57% - Delivery Time

54% - Diversity of products

39% - Special promotions (free shipping, discounts, loyalty program, cashback, etc.)

Source: NielsenIQ

Three e-commerce platforms (all foreign) lead the competition for Brazilian consumers: Mercado Livre, from Argentina, registers 13.9% of total visits; the Singaporean company Shopee registers 10.1%, and the Brazilian branch of Amazon registers 6.8%.

Despite continued growth, the e-commerce market in Brazil can be difficult for U.S. companies to navigate without a local presence due to challenges involving customs, taxes, shipping, customer service needs, processing returns, and processing payments for cross-border sales. Sellers also need to be aware of local consumer laws that apply to any purchase completed in Brazil.

Cross-Border E-Commerce 

In 2021, Brazilian transactions for cross-border e-commerce grew 21%. This growth is drawing the attention of regulatory agencies, leading to initiatives for faster deliveries, which is predicted, in turn, to drive further growth in cross-border transactions.

The top online marketplaces for Brazilian consumers to purchase general products that U.S. companies should consider for business-to-consumer (B2C) sales are, in order of market share:

1. Mercado Livre

2. Shopee

3. Amazon Brasil

4. Americanas

5. Magalu

6. AliExpress

7. iFood

8. Casas Bahia

9. Netshoes

10. Shein

U.S. B2C firms targeting consumers online from outside Brazil should plan strategically. Brazil is a price sensitive market with high import tariffs and taxes. Direct sales from foreign countries, including the United States, are subject to customs duties and regulations. Although Brazil has made substantial progress in reducing traditional trade barriers (tariffs, import licensing, etc.), rates in many areas remain high and favor locally produce products. This demand is further skewed by limited tariff and tax enforcement on local products.

In 2018, Brazil launched a service platform that facilitates purchases of U.S. goods from foreign websites. The program, called “Compra Fora” in Portuguese, is run by Correios, Brazil’s postal service, and allows importers to register a physical address in the United States where their purchases will be delivered and then routed to Brazil. Because of this program, international e-commerce shipments have seen their delivery times reduced. In this model, foreign shipping companies coordinate local delivery with Correios. 

Cross-border e-commerce growth does face challenges. For example, all international purchases are subject to a 60% tariff and can also be charged a state tax (ICMS) of 17-25 %. However, this tax does not apply to all packages, and due to the small number of audits, there are concerns of counterfeit products in the market. In 2020, federal officials audited just 2.6% of all cross-border postal shipments, but over 90 percent of audited shipments were subsequently required to pay tax.

Online Payments

Brazilian consumers expect the flexibility to pay in no-interest installments for high-value e-commerce purchases. U.S. vendors should be aware of this expectation when selling to consumers in the Brazilian market.

Cybersecurity continues to be a concern, particularly regarding online fraud. Most Brazilians do not carry international credit cards, so international transactions can be challenging for both residents and visitors. While visitors have relatively few problems using credit cards at hotels and tourist venues, the same is not true for online purchases. Those wishing to pay for services such as food delivery or movie tickets online often encounter barriers, as many Brazilian websites do not accommodate international credit cards. The most accepted cards in Brazil are Visa and MasterCard with chip and PIN technologies adopted to avoid misuse of physical cards.

Major Buying Holidays

Brazil has five holidays of high retail sales: Christmas (December 25th), Mother’s Day (the second Sunday in May), Valentine’s Day (June 12th), Father’s Day (the second Sunday in August) and Easter. There are also five other major seasonal dates with boosted sales:  Children’s Day (October 12th), Brazil Week (March 14th to 20th), Consumer’s Day (March 15th), Black Friday, and Cyber Monday (in line with the U.S. dates).

Additional Information:

• Nielsen IQ EBIT
• ABCOMM
• Report Linker
• eCommerce Brazil
• CAMARA
• SBVC
• NIELSEN
• IBEVAR
• Sector Report on eCommerce