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eCommerce in Brazil_CoutinhoFGV

Data and Analysis on eCommerce trends in Brazil

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eCommerce in Brazil_CoutinhoFGV

  1. 1. Marcelo Coutinho Associate Dean, Executive MBA EAESP/FGV marcelo.coutinho@fgv.br @mcoutinho
  2. 2. • GDP 2015: U$ 1.77 trillion (9.8% of US GDP) • Population: 207.8 million • GDP per Capita, PPP: U$ 15,359 (US: U$ 55,836) • Current account balance: (-) 55.8 U$ billions – Exports of Goods and Services: 13% of GDP (US 12.6%) – Imports of Goods and Services: 14.3% of GDP (US: 15.5%) • Central Government Debt: 66.2% of GDP (US: 97.5%) – Central Bank of Brazil interest rate: 14.25% – Inflation rate 2016 (projected): 7.2% Data Sources: IMF, Central Bank of Brazil, 2015
  3. 3. April, 2016 Political/ Economical Crisis • Impeachment of Dilma (next election 2018) • Recession (3.4% fall of GDP in 2016, 3.8% 2015 ) • Unemployment: 11% • R$ 3.55 = U$ 1 November, 2009 Commodities Boom • Unemployment: 6.8% • GDP: -0.1% (5.2% growth in 2008, 7.5% in 2010) • R$ 1.7 = U$ 1 September, 2013 Political Malaise • Corruption Scandal (Lavajato / Carwash) • Street protests • End of commodities boom, slower growth • R$ 2.256 = U$ 1
  4. 4. Income distribution Number of Households (000) Social Class Monthly Household Income U$ (2016) 2015 2016 A 6,320 + 1,826 1,936 B1 2,800 3,371 3,338 B2 1,470 12,084 11,550 C1 820 15,278 14,821 C2 490 16,438 17,091 D/E less than U$ 490 17,785 18,026 Source: Brazilian Association of Market Research Companies (ABEP)
  5. 5. Household income (2016): A: U$ 6,320 + B: U$ 1,470 – U$ 6,320 C: U$ 490 – U$ 1,470 D/E: Below U$ 490 Source: Brazilian Internet Steering Committee, Brazilian Association of Market Research Companies
  6. 6. Source:PewResearchCenter,2015
  7. 7. 100.3 million of Internet users Desktop: 83.1 mm Mobile: 60.4 mm Tablet: 11.8 mm Source: Comscore, Jan 2016
  8. 8. % of total time spent on the Web (march 2016) Other
  9. 9. 4G Coverage: Brazil: 40.6% US: 98% Mobile Download Speed (Mbps): Brazil: 18,6 US: 25,5 Source: GSMA Association
  10. 10. Mobile is responsible for 67% of the total time spent on the Internet in Brazil (54% of retail sites*) minutes(mm) Source: Comscore, Jan 2016 * US: mobile is 62% of the total time spent on retail sites
  11. 11. Brazil e-Commerce Revenue, U$* *exchange rate on december of each year Source: e-Bit
  12. 12. eCommerce sales = 3,3% of total sales in Brazil* * Comparing with Brazilian Institute of Statistics “restricted retail” category ** Exchange rate December 2015 *** estimates Revenue 2015 = U$ 2.9 billion** Revenue 2015 = U$ 3,2 billion** Revenue 2015 = U$ 540 million*** NetshoesMercado Livre Online Marketplace Revenues 2015 = U$ 290 million
  13. 13. Up to U$ 790 monthly income (Dec/2015) U$790- U$2,070 monthly income (Dec/2015) More than U$2,070 monthly income (Dec/2015) E-commerce total orders in 2015: 106.5 million Average Ticket 2015: U$ 121.25 (US: U$ 77.9 *) * Average order placed on a desktop – US Dep. Of Commerce Source: e-Bit
  14. 14. Source: e-Bit
  15. 15. Revenue 2015 (pure ecommerce + bricks and clicks) – U$* *Dec 2015 average Source: Brazil Online Retail 2016 - SEBRAE (Brazilian Micro and Small Business Support Service)
  16. 16. Online retailers: most used marketplaces 77% 36% 34% 38% 28% 10% Source: Brazil Online Retail 2016 - SEBRAE (Brazilian Micro and Small Business Support Service)
  17. 17. Online Retailers Segments 30% 13% 13% 10% 9% 9% Source: Brazil Online Retail 2016 - SEBRAE (Brazilian Micro and Small Business Support Service)
  18. 18. Best channels for online sales in Brazil (store owners) 72% 68% 52% 44% 35% 27% Source: Brazil Online Retail 2016 - SEBRAE (Brazilian Micro and Small Business Support Service)
  19. 19. If Brazil follows US trends, mobile apps will be more and more important Source: Comscore
  20. 20. Payment Methods (as % of total sales) Source: Brazil Online Retail 2016 - SEBRAE (Brazilian Micro and Small Business Support Service)
  21. 21. High cost of delivery is a problem (lack of infrastructure outside main centers and theft) Brazil rank 55th in the Logistics Performance Index of the World Bank. US is 10th.
  22. 22. Brazil is the world leader on time to prepare and pay taxes: 2,600 hours World Average: 261 hours US: 175 hours Source: World Bank
  23. 23. 54% of Brazilian buyers bought on international web sites in 2015 (38% in 2014) Source: e-Bit
  24. 24. Some thoughts • Brazil is a good bet on the medium term, but we have a bumpy ride in the next 2/3 years (social security reform, control of government debt) • If you are a small/medium business, your best bet is to look for a partner (distribution) or marketplace – Social and mobile are good tools to explore the reception to your products • Richest Brazilians (around 2 million households) are intensive internet /mobile users • A better educated generation is entering the market and they want new levels of quality products and services
  25. 25. Marcelo Coutinho Associate Dean, Executive MBA EAESP/FGV marcelo.coutinho@fgv.br @mcoutinho

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