The newest Webshoppers report – considered the most reliable study of the Brazilian e-commerce and a major reference for industry professionals – was released late March. The analysis, carried out by Ebit | Nielsen in partnership with Elo, breaks down sector’s performance in 2018 and offers estimates for 2019.
Among the main highlights, the study stresses e-commerce’s resuming growth after two years (12%) and Latin America’s overall expansion (17.9%), mainly leveraged by its leading country – Brazil. Such data reveals a strengthening domestic market – which, fundamentally, also confirms and increases sales prospects in Brazil – endorsing the country as a well-connected nation, despite its notorious technological barriers.
The overall picture portrays Brazil near the expected moment for e-commerce. After two and a half decades riding a true economic roller coaster, the Brazilian market is starting to show certain maturity for a more homogeneous and consistent growth. It is even suggested that e-commerce plays a fundamental role in this process of economic recovery.
The ten main international e-commerce players in Brazil are mentioned in the report:
In fact, there is no final formula to justify these companies’ outstanding performance. Applying different strategies to stay strong in a notably competitive market such as Brazil’s, the use of local payment methods, specific marketing strategies, and, above all, knowledge of Brazilians’ consumption habits are some of the aspects that directly influence these brands’ results.
Check out some of the reasons behind the good ranking positioning of these platforms and what lessons can be learned from each case.
AliExpress’ CTO, Guo Dongbai, attended the 2018 Brazilian E-commerce Forum and revealed the company’s strategy to succeed in the Brazilian market. The Chinese website is the most selling international e-commerce in Brazil, with an all-encompassing strategy carefully followed by the company’s team based on eWTP (Electronic World Trade Platform) and its four principles: platforms without borders, accelerated globalization, empowerment of small business and prosperity for all.
Read the complete article about the panel of Guo Dongbai in Brazil: How AliExpress Became Brazil’s Largest Ecommerce Store
To make the site a borderless platform and sustain its operation in 200 countries, with 18 different currencies and 20 different languages, Dongbai’s team faces a number of challenges. The complexity of going global involves several issues, including local legislation, logistics, culture, fees, security, technology, usability, inventory and payments. One of the absolute truths of the business is adapting its value proposition according to each market. And when looking at consumer behavior in Brazil, the relevance of regionalization became even clearer.
Within such context, a crucial aspect was finding the right partners to support their settlement in a new territory. This is how the partnership between AliExpress and EBANX started, back in 2013. Until then, only Brazilians with an international credit card could buy through the platform, which corresponded to 19% of the population – and impacted the brand’s performance here. According to Dongbai, offering the option of paying via bank slips was a game changer for the business’ expansion in Brazil. Also in collaboration with EBANX, AliExpress started offering domestic and international credit cards to consumers, growing the business to a point that it became the leading international e-commerce player in Brazil.
Today, Brazil is one of Wish’s ten largest markets. The company is regarded by Forbes magazine as one of the businesses capable of challenging Amazon and AliExpress, with their super cheap products. Based in San Francisco, California (not in China, as many might think), Wish was not very popular in Brazil until 2016, but following the model of other consolidated marketplaces, it quickly propagated among us with unprecedented strength. With a proven-to-be reliable platform, Wish sells from electronics to clothes and had to adapt to win over the Brazilian consumer. That is another foreign company that started offering payments via bank slips in partnership with EBANX.
For companies like Wish, it is not enough to have an easy, intuitive and user-friendly platform, coupled with quality logistics (that is, a smooth, positive process from start to finish). Those are features that almost all e-commerce giants provide. It is imperative, then, that the innovation be constant, with more immersive and surprising purchasing experiences. And Wish bet on what Brazilian loves most: promotions. The company’s application is a well-known case. Through notifications with lightning-fast promotions, purchase timer, progressive discounts as more products are sent to the cart and so on, the company has managed to gain and retain loyal clients, reaching second place in the ranking of the international e-commerce firms most appreciated by Brazilians.
Needing no introductions, billionaire Jeff Bezos’ giant company is one of the most valuable cases in the global e-commerce market. In fact, the largest online store on the planet owns not one, but several success stories, in the most different management fields. Everyone knows what the company does: it sells cheap and delivers fast. In Brazil, Amazon’s operations are in constant expansion (the last big move happened in January, when the company launched a personal care store, a baby items store and a toy store), with a total inventory of 20 million products. The company’s chief executive in Brazil, Alex Szapiro, was the one who decided on these specific channels for the debut of the multinational’s new business cycle here. Even with a formula of success and a well-established brand in consumers’ imaginary, Amazon itself publicly acknowledged the difficulty of growing in Brazil due to three barriers, regarded by CEO Frederico Trajanos as typical of the Brazilian market: the logistics infrastructure, the tax structure and the cost of capital.
More content about Amazon: What Makes Amazon.. Amazon? Unraveling the Secret of the Ecommerce Giant
In spite of this, one of the lessons that Brazil has been learning from Amazon, even amid the challenges, is the need to involve massive technology from the first click. Managing to overcome all logistics hassles and literally serving consumers from North to South, products are wrapped in boxes and delivered as fast as possible. Amazon’s business is about reducing delivery deadlines, even if it requires hiring a costly carrier (to the detriment of the cheapest), as long as purchases arrive as soon as possible at the customer’s door. In Brazil, while the company cannot offer full purchase tracking from the first click to the door in one hour (nor the lockers – a great hit among US customers), their bet was to offer the shorter one-day delivery.
Another lesson, unthinkable for some, but which has paid good results to the Brazilian operation, is to avoid unrestrictedly following the political and economic scenarios, sticking to the decision to expand the business in the country even during uncertain periods. According to the company’s management, they manage to remain indifferent to these scenarios because they focus on: concentrating on the consumer, understanding what can make life easier for them, making decisions not based on the short term, but on trends for longer periods, and always ensuring good service. After all, there is no such thing as lack of demand.
It took a while, but it finally happened. EBay’s Brazilian operation started only in 2014, which means it took less than five years for the company to reach the top 5 in the Webshoppers report ranking. Brazilians were always able to use the website, but their official establishment here meant purchasing platforms (site and apps) in Portuguese, offering local customers the convenience and further advantages only the foreign public used to have.
Perhaps one of the most valuable lessons learned from the company was to avoid rush. Before going full speed, eBay launched a first app, eBay Moda, to feel the national market, as a sort of a test platform. It worked out and a phase that lasted little more than nine months of preparation began for the official launch of the operation. Perhaps one of the most emblematic issues for e-commerce companies starting to operate in new markets is their payment offering. That was not a problem for eBay, as it used all payment methods powered by PayPal (which belongs to eBay). This enabled the company to manage and monitor with greater accuracy all purchases made within the country.
Much more than facilitating overseas purchases by Brazilians, the company went beyond with a very interesting feature: it included Brazil in the brand’s global delivery program. In short, items sold by suppliers participating in the program are treated as domestic transactions, so consumers can make purchases in reais, with the import tax included upfront in the total amount of the operation. Thus, buyers do not need to wait for the notice to pay the tax, to only then receive the items purchased.
In 2018, the company’s focus was to boost its local sales team, investing in technological adjustments and new interfaces to make life easier for those who only speak Portuguese, but were seeking to sell abroad. More than fostering cross border e-commerce among the local public, the company studied the Brazilian buying profile and found customers of first-rate international retailers. eBay carries no inventory and operates on the marketplace model, but the company pursued an elementary feature in this market: to facilitate transactions for all stakeholders.
Another Chinese commercial power, Banggood is also a Portuguese-translated site and EBANX’s partner for local payment method s – showing the same determination of its peers as to adapt to the needs of Brazilian consumers (very different from the Chinese market). Social networking and mobile experience are the company’s target, which also bets on interest-free installments, discount coupons, seasonal offers, ready-to-act support, and a brand’s annual anniversary campaign with even more attractive marked-down prices. One factor, in particular, increases the player’s credibility, especially among consumers still skeptical of buying from China: a return policy. Despite short, it provides consumers with a sense of reliability they very well need. With thousands of different items, Banggood also launches new products every day and keeps up to date with the latest technological trends, always focusing on what endorses its performance: attractive pricing.
For many loyal consumers of the brand, Apple is more than a company, representing a true lifestyle and a market revolution. Scholars from various fields are often driven to research the factors behind such a minimalist brand’s capacity to captivate as it does, in addition to its super quality products. Apple’s e-commerce was launched in Brazil in 2009 (it will, therefore, reach ten years of operations in November). Over the years, the company has always been keen to keep a well-crafted visual pattern, lots of (and well-arranged) information, categorization, flashy images, interactivity, intuitive shopping, and online store exclusives that may have disappointed some retailers reselling the brand’s products.
If brand performance is, by itself, a strategy lesson (with a great focus on simplicity and on the “less is more” concept), this can also be seen in the shopping experience provided. By understanding what consumers are looking for and waiting for, which factors permeate their choices, their buying habits, and their lifestyle, Apple has designed a true experience for anyone visiting their e-commerce platform. From the purchase to the moment of opening the products at home, everything is elegant and pleasant, as well as face-to-face purchases at the brand’s store.
Discussing prices does not apply to Apple, since they are always pre-set, with virtually no discounts in the online store (or very specific conditions, to qualified buyers). The secret, then, seems to be based on the combination of service and organization, which streamlines processes and empowers consumers through a truly grandiose buying journey.
Nike launched its e-commerce in Brazil in 2013, with outsourced technological operations and logistics. The sporting goods multinational invested in a distribution center for its products and has been striving, over the years, to promote an increasingly omnichannel shopping experience. That is, for them, their physical store is also digital, which extinguishes online and offline disputes. Nike put itself in the customer’s shoes: nowadays, the gap between the online and offline worlds is quite reduced (customers make extensive online research before heading to the physical store to actually make a purchase) and identified consumer behaviors in both environments to develop combined solutions. The omnichannel strategy can turn occasional shoppers into loyal customers, boosting consumption, and Nike did it masterfully by launching the NikePlus program, the forerunner of the brand’s apps. Today, it is estimated that NikePlus members consume three times the amount of an anonymous buyer.
With other online partners reselling their products and not operating on the marketplace model, Nike has set up a team dedicated to taking care of these partnerships and ensuring the brand’s good image in environments it cannot control. In e-commerce, loyalty is not taken for granted. Nike e-commerce director Roberto Almeida said in an interview last year that loyalty cannot be blindly believed, as competition, the current world’s conveniences and constant consumer harassment require that buyers be captivated on a daily basis. Online customer service, then, is thought of with a view to alluring and providing a multi-faceted service experience, not relying barely on the safeness brought by brand tradition. Customized offers, sales through social networks, extensive presence, special partnerships that allow them to negotiate prices and deliveries, and an impeccable visual identity are other assets of the brand.
About Light in Box, you should also read: How an Installments Payment Strategy Helped LightInTheBox to Increase Sales in Brazil
Think of combining trendy lifestyle products with attractive prices. This is LightInTheBox, founded in 2007 by Quji (Alan) Guo alongside three other co-founders with a specific purpose in mind: to offer a wide range of the latest lifestyle products at highly competitive prices. Latin America has become one of the strategic regions for the expansion of the company in 2017, due to the region’s business potential and its high numbers of e-commerce growth. Representing a great opportunity, Brazil (which at that time generated 50 billion dollars in annual e-commerce sales) was a target of the business, which spared no efforts to win this promising market.
Among the deployments were a store operating in Portuguese, media and customer service investments and, later, in 2014, offering the local payment experience through a partnership established with EBANX. According to the company, Brazil had the greatest impact after the adoption of local payment methods among their other countries of operation. LightInTheBox started accepting installment payments (which is in the DNA of the Brazilian consumer and economy) in 2018. As they began to process purchases in installments, with the support and strength of an online campaign promoted by EBANX, the company saw its sales increase from 30% to 40%.
Knowing the market from the inside out is critical when it comes to expanding successfully, something that LightInTheBox implemented quite skillfully. This is the only possible way to understand the consumption habits, culture, preferences and needs of the target public. In other words, to become global, one has to think local.
A very similar business model to Wish’s and Aliexpress’, Gearbest is another marketplace that offers very cheap products in a wide range of categories, to suit all tastes. Like its competitors, noting the greed of Brazilian consumers for variety and low prices, it has taken important steps, such as translating pages (albeit partially) of its online stores and displaying prices in reais instead of in dollar or China’s currency. They also realized that one way of attracting more Brazilian consumers would be to meet two essential local habits: payment in installments on credit cards and via bank slips – which was deployed in partnership with EBANX.
Recognizing the dynamics of the Brazilian market and its financial system, peculiar to the rest of the world (accepting payment via banks slips, for example), understanding that a sale only goes through when the consumer receives the purchased item, providing customers with communication channels, and offering discount coupons were also precious insights for the business.
Also from China and belonging to the same group of LightInTheBox group (therefore, with strategies similar to those presented previously), MiniInTheBox offers a series of products, gadgets and electronics at cheap prices, in a platform that is reliable and adapted to the Brazilian public. With a clean and well-translated layout, it offers simplified browsing and purchase experiences, as well as delivering within the expected standard for Chinese websites. The MiniInTheBox bets on the Brazilian taste for very cheap products (with emphasis on the home goods section), some sold for less than ten dollars, in addition to free shipping.
Price and a varied offer were the website’s secret to grow here, without having to invest big bucks in advertising, as other major Chinese companies. Making good use social networks with barely no traditional advertising, word-of-mouth works in favor of MiniInTheBox, especially among the younger and ultra-connected consumers with even lower purchasing power and who are patient enough to wait for the delivery deadline of a few weeks practiced by the website. All this only made their public increase, taking them to the tenth position in the report’s ranking.