Brazil's e-commerce market to see big gains
Updated: 2015-08-10 11:23
By Yang Ziman in Beijing email@example.com(chinadaily.com.cn)
Brazil's e-commerce industry will become the 10th largest e-commerce market by 2018 with an annual sales volume of $545 billion, according to a report by DHgate.com, a major Chinese cross-border business-to-business e-commerce platform.
The Brazilian e-commerce market is the largest in Latin America and one of the fastest growing sectors in Brazil. The country has more than 200 million people, and 102 million of them are Internet users. E-commerce sales in recent years in Brazil have been growing at double-digit rates – 28 percent in 2013 and 22 percent in 2014, said the report.
The middle and high-income classes in Brazil increased from 51 percent in 2003 to 76 percent in 2013. It is estimated that in 2023, middle and high-income classes in the country will stand at 58 percent and 33 percent, respectively, according to the report.
AliExpress, part of the Chinese e-commerce giant Alibaba Group, has become one of the most popular online shopping websites in Brazil. Based on its sales record, Brazilians love buying inexpensive products from China, the most popular ones being electrical products, garments, glasses, energy-efficient lamps, and other low value items.
AliExpress was launched in 2010 to help Chinese merchants sell their products to overseas buyers. It now covers more than 220 countries and regions, selling more than 40 categories of products that include garments, electrical products, shoes and bags, accessories, and auto parts. Wedding products, garments, accessories and electrical products are most popular in Latin America.
Brazil is a major market for AliExpress, said Zheng Yaqian, a researcher at AliExpress. However, local logistics have long been a headache for international e-commerce sellers.
“Often times delays happen with the Brazilian postal service provider, which is the major deliverer in the country, caused by strikes, holidays, and chaos in public safety. Brazilians enjoy life more than they enjoy work. Plus, it is one of the countries with the most frequent festivals throughout the year. During holidays, deliveries will be remarkably late,” said Zheng.
According to a report by icfnews.com, a Chinese news website dedicated to cross-border e-commerce, Brazil's logistics service is hampering the e-commerce development. Delivery is mainly provided by the Brazilian postal service, which is known for its low efficiency, especially in the last-mile delivery. Unlike China, the country does not have a thriving third-party delivery service provider, which is a great challenge for e-commerce development.
"It takes about two to five months for the end consumers in Brazil to get their order from China," said Feng Bo, a Chinese businessman who has been living in Brazil for nearly 10 years. "One of the solutions is build a local warehouse to store up the goods. However, such kind of solution has not been quite successful so far because it adds complication to the taxation system."
Feng first came to Brazil when he was working for Zhongxing Telecommunication Equipment Corp in 2006. He now runs his own businesses, You Xing Trading Ltda and Elogistics do Brasil Ltda, helping Chinese companies tap into the Brazilian investment, trade, e-commerce, and logistics markets.
"Brazil has been doing well selling bulk commodities such as mineral and cash crops. Light industry is so weak that it does not even have a complete production chain," said Feng. "The current economic slowdown is to certain extent a good thing because it will push the country to update its light industry, where China has so much experiences."
The Brazilian government has predicted that the country's economy will slide downward by 25 percent by the end of this year mainly because of the depreciation of the reais – Brazil's currency – and deepening economic recession.
"The economic slowdown in Brazil offers great opportunity for Chinese cross-border e-commerce companies to set up their presence in the country,"said Feng. "China's experiences in the models, technologies and investment in e-commerce are ahead of Brazil by five years. I have noticed that Brazilian businessmen show strong interest when we approach them with potential collaboration opportunities from China. China can be bolder in exploring the Brazilian e-commerce market."