At a panel presentation put on by the Brazilian American Chamber of Commerce last week in New York City, experts from PR, digital, and legal spoke about the e-commerce potential that exists for knowledgeable consumer goods companies, including personal care and cosmetics brands.
E-commerce sales in Brazil are projected to increase from $17.8bn in 2014 to $40.8bn by 2019, according to data shared by Marcio Cots, a partner at Cots Advogados, a Brazilian firm that advises on e-commerce matters.
Brazilian consumers gather a lot of information and make buying decisions online, researching products and keeping up with fashion and beauty trends via Instagram and YouTube, according to Leonardo Cid Ferreira, a founding partner of AD. Dialeto, a digital agency that Accenture acquired last year.
And the way Brazilians use money online follows a pattern, he says. First someone will bank online, then pay for services, then buy tickets, and finally will have enough trust in the system to buy products.
Brazilians turn to e-commerce for easy replenishment, to save on price, or for the convenience of delivery. Ferreira admits that delivery from outside the country can take awhile—over a month for some items sent from China—but emphasizes that as long as the benefit (price, quality, name brand, etc.) is clear, consumers will wait.
Over the past decade or so over 40m Brazilians have moved into class C, the country’s middle class.
What distinguishes these middle class shoppers from those in other countries isn’t consumer behavior, it is access to recognizable brands, says Flavía Vígio, the executive director of Golin, who counsels the PR firm’s global and Latin American clients.
Vígio suggests that e-commerce is a smart way for foreign companies to get product in front of these aspirational shoppers. And, she notes several trends that should inform a business’s approach to online selling.
“Personalization and relationship with brands” is one such trend. Brands selling in Brazil should “segments products….Develop a product portfolio [specifically] for class C, that speaks to their needs,” Vígio says.
She highlights a shift in family structure that brands must also consider: women in Brazil often make the purchasing decisions; and recently urban families contend with traffic, personal security, career issues, and time management in new ways.
And brands selling in Brazil will need to pivot quickly, operating in a sort of “permanent beta status,” as the country’s population, politics, and economy advance, Vígio emphasized.
The country’s infrastructure, shipping, taxes, and customs all understandably influence product delivery in Brazil.
Consumers are taxed 40 - 60% on products shipped into the country, while the seller pays no such tax, noted Cots.
Products valued under $300, Cots explained, do not go through customs but rather the shipping company—DHL, UPS, FedEx, Correios—is responsible for charging the consumer tax based on a package’s value.
Brazil’s infrastructure is limited, acknowledges Vígio. Which may be part of the reason that global cosmetics retailer Sephora made an investment in its Brazilian supply chain operations late last year.
The beauty company partnered with logistics firm CEVA to consolidate its distribution network and is focused on warehousing and efficient to-store delivery.
“In order to meet Sephora´s strict requirements CEVA has invested heavily in climate control infrastructure to enable the storage and handling of over 7,000 SKU and approximately three million individual order items each year,” according to a press release issued at the time.
The release goes on to explain that “CEVA will manage the inbound, warehousing, outbound and reverse logistics to Sephora stores across the country.”