Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
Like many markets around the world, eCommerce is transforming how products are sold in Brazil. According to the 2021 eEbit Webshoppers report, eCommerce in Brazil grew by 31% in the first half of 2021. In 2020 alone, the number of online consumers increased by more than 40% due to health restrictions resulting from the global pandemic and changing consumer preferences
Brazil had a 10% average sales conversion rate in 2020, and the trend is for this number to grow, according to Mimo Live Sales Company.
The self-service segment (entertainment, tourism, durables, non-durables, and perishables) registered the highest growth in number of total orders and gross revenue. However, home and decoration are the most popular eCommerce retailers in terms of sales, registering a 155% increase in the number of orders and 67% in revenue. Second in total number of orders is pet shops (56 percent), followed by sports (48 percent), department stores (37 percent), food (34 percent), and self-service (32 percent), which represents any online transaction (from purchase to delivery) that is completed without another person’s assistance. Brazilians prefer to make online purchases via their smart phone, rather than by computer. Last year they purchased US$ 56.3 million in goods via a smart phone, with the average purchase value of US$ 100.
Comparison H1 2020 to H1 2021
- Sales increased by a record of 31%
- Average price of purchased items increased 22%
- Orders increased by 7.4%
- Number of orders with free shipping grew by 8%
- Mobile sales increased by 56.2%
The pandemic is the primary reason for such tremendous growth in online purchases. The government issued pandemic relief via digital wallets to most Brazilians, providing millions of Brazilians access to online retailers for the first time. The Southeast region of Brazil, where Sao Paulo and Rio de Janeiro are located, is still the most important region for sales in Brazil. It has contributed 51 percent to the growth of the e-commerce last year.
According to Nielsen research, the primary reasons Brazilian consumers shop online include:
73% - Customer doesn’t want to leave the house
52% - Special promotions like free shipping, discount, samples and loyalty program
47% - Time saved
38% - Delivery times
Despite continued growth, the eCommerce market in Brazil can be difficult for U.S. companies to navigate without a local presence due to challenges involving customs, taxes, shipping, customer assistance, reverse process and payments for cross-border sales. Any sellers need to be aware of local consumer laws that apply to any purchase completed in Brazil.
The top online marketplaces for Brazilian consumers to purchase general products that U.S companies should consider for Business-to-Consumer (B2C) sales are Amazon, Mercado Libre, Magalu, Shopper, Aliexpress and B2W (Americanas, Submarino and Shoptime)
The growth in cross border trade has been driven by the number of orders, which in 2021 have grown 15% compared with 2020. Shoppers who make purchases on international websites typically purchase more.
U.S. B2C firms targeting consumers online from outside Brazil should proceed with caution. 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 and regulations. Although Brazil has made substantial progress reducing traditional border trade barriers (tariffs, import licensing, etc.), rates in many areas remain high and favor locally produce products.
Brazil has been on the U.S. Trade Representative (USTR) Special 301 Watch List since 2007. The most recent version of USTR´s annual Special 301 report, including specific comments on Brazil, can be found here:
This designation reflects concerns with respect to high levels of counterfeiting and piracy in Brazil, including online piracy and use of unlicensed software. It is important to be aware of this when buying or selling content online. Businesses that identify online content infringing on their rights can contact the Internet Service Providers (ISPs) hosting the content to attempt to resolve their concerns. Businesses can also contact Brazilian enforcement authorities to explore potential criminal action. With respect to potential civil actions, businesses generally should be aware that ISPs will not be found civilly liable for damages resulting from content generated by third parties. Therefore, companies should be aware that their civil actions against an ISP, based on online sales of counterfeit goods, may not be successful. On the other hand, ISPs that host content infringing on copyrights or neighboring rights may be found civilly liable if the ISP does not remove content in a timely matter after notice has been given by the rights holder. The legislation in this area is still developing in Brazil, so companies may wish to consult local counsel if they have concerns. The criminal division of the U.S. Department of Justice has an Internet Computer Hacking Intellectual Property Officer (ICHIP) posted at the U.S. Consulate in Sao Paulo who can assist with general questions about criminal enforcement. The relevant contact is: firstname.lastname@example.org; email@example.com; firstname.lastname@example.org.
Businesses seeking to market in Brazil also may wish to consider registering their trademark(s) as domain name(s) ending in “.br,” the country-code top-level domain (TLD) for Brazil. Registering trademarks as domain names in country-code TLDs may be helpful in establishing a local market presence. Defensively registering trademarks as domain names also helps guard against “cybersquatters,” i.e., bad actors who register others’ trademarks as domain names in bad faith. Domain names typically can be registered for future use, thus preserving the company’s options for expansion. The .br TLD, unlike some country-code TLDs, has an administrative dispute resolution policy for addressing cybersquatting. Court litigation also remains an option for combatting cybersquatting.
In 2018, the Government of Brazil launched a service platform that facilitates purchases of U.S. goods from foreign websites. The program, named Pre-Clearance for Americans and “Compra Fora,” for Brazilians, 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.
Brazilian consumers expect to have the flexibility to pay in no-interest installments for high-value eCommerce purchases. U.S. vendors should be aware of this important trend when selling to consumers locally.
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 where retail sales increase: Christmas (December 25th), Mother’s Day (the second Sunday in May), Valentine’s Day (June 12nd), Father’s Day (the second Sunday in August) and Easter. There are also five other major seasonal dates that affect retail: Children’s Day (October 12nd), Brazil Week, Consumer’s Day, Black Friday, and Cyber Monday (in line with the U.S.).