By the year 2020, nearly half of online consumers will have purchased from overseas websites, creating new opportunities for global retailers, according to a recent report from Accenture and AliResearch. They report that consumer purchasing across international borders is going up by 28 percent each year and will climb to $1 trillion by the year 2020. That outpaces overall yearly growth for e-commerce as a whole.
While the Asia-Pacific region will generate most of that buying, Latin America will be the fastest site of growth for consumer cross-border online purchases. The report also states that people from around the world are buying from e-commerce sites that are based in the United States more than any other region. According to experts, the Latin American market can be an advantageous place for U.S.-based companies to begin their global e-commerce expansion because the two regions are geographically near to each other, and Latin Americans generally hold the made-in-the-USA label in high regard.
Consider Targeting Brazil
Within that fast-growing market of Latin America, Brazil is accounting for the largest percentage of that growth. In 2013, for example, the revenue generated from online sales in Brazil was more than three times the amount of revenue from Mexico and Argentina put together.
Brazil is the largest country in South and Latin America, in terms of both population and area. While there are significant gaps dividing the richest and poorest households, the middle class is pushing consumer growth, making up nearly 60 percent of all consumer e-commerce sales in the region. Having hosted the World Cup in 2014 and being host to the Olympics in 2016 is giving an additional boost to the economy.
Brazil has a youthful, tech-savvy populace, with more than 60 percent of the population being under 30 years of age. Brazilians are shopping online for better deals, convenience and a broader choice of products. In urban areas, traffic congestion can be horrific, which is another factor that is pushing residents to buy online from the comfort of their homes.
Who is Buying Online in Brazil?
The demographic that is shopping online in Brazil has a majority that’s between 35 and 44 years old, followed by 25 to 34-year-olds, 45 to 49-year-olds, with 15 to 24-year-olds coming in last. Males outnumber female online shoppers by a relatively small percentage: 22 percent of men shop online, compared to 17 percent of women, according to a report from eMarketer. The majority of online shoppers report having a higher education and are in the upper middle class socioeconomic group. When considering what to sell, keep in mind that the top-selling product categories in Brazil include software, electronics, household appliances, health and beauty products and fashion and fashion accessories.
How to Reach Brazilian Buyers
Brazilians are second only to the United States in the number of Internet users who spend time on Facebook, Twitter and YouTube, according to eMarketer, so these are useful places to reach out to this market. Orkut is another popular social media site that Brazilians utilize. Additionally, Brazilians were shown to be more open to taking advantage of Internet advertising, with a Nielson study finding that people in this region are more likely to consider ad content to be of importance with regard to their buying decisions. Consequently, paid targeted ads present another useful way to reach this growing market. Just as with most markets these days, it’s important that your e-commerce site is optimized for mobile users. About half of Internet users in Brazil go online using a mobile phone.
The Challenges of E-Commerce in Brazil
While there is a tremendous opportunity for cross-border e-commerce in Brazil, especially considering the lack of product choice locally, challenges remain. One of these is the fact that only wealthier residents who have the ability to travel can obtain international credit cards. Since international credit cards are required for most foreign online purchasing, this clearly limits the pool of possible cross-border customers. Another hurdle is assuring Brazilians that making purchases through a mobile phone is a secure way to conduct transactions, with identify theft being of paramount concern. While there are several obstacles to reaching this market, retailers who target the expanding middle class can be successful in Brazil.