E-commerce Conversion Rates in Brazil

Brazilian e-commerce visitors have multiple reasons to convert or cease to purchase online. In this article we will analyze some of the statistics about conversion rates in Brazil and suggest effective methods to have them increased.

Conversion Rates by State and Customer Behaviour

Recent studies by SEO specialist Conversion shows that the rates for conversion in Brazil vary dramatically between states. The states with the highest conversion rates according to their research were:

• Mato Grosso: 1.28%
• São Paulo: 1.17%
• Rio de Janeiro: 1.16%

While the states with the lowest conversion rates were found to be:

• Alagoas: 0,67%
• Paraná: 0.65%
• Pernambuco: 0.63%

As a general rule, the conversion rate per state can be linked to factors like GDP per capita and residential broadband internet penetration rates. This means, in broad terms, that Brazilian states with a higher population connected to the internet in their own households, and with the highest buying power, display higher conversion rates.

Correlating Factors

For example, the state of São Paulo has the second highest conversion rate in the country and also has the second highest GDP per capita and second highest penetration for broadband internet. The state of Rio de Janeiro is a similar example, with the third highest conversion rate, third highest GDP per capita and the third highest penetration of broadband internet.

On the other hand, the state of Pernambuco shows the lowest conversion rate of all 27 states in Brazil, while also being in 18th spot for GDP per capita and 22nd spot for broadband internet penetration. Alagoas shows the third lowest conversion rate in Brazil and is also 25th place in GDP per capita and is the 23rd state in terms of internet penetration rates.

Interestingly, this rule does not apply in some cases. The state of Mato Grosso shows the highest overall conversion rate in the country but is actually the 11th state with the highest internet penetration and the 6th state with the highest GDP per capita. Paraná shows the second lowest conversion rate but has the fourth highest rate for broadband internet penetration and is at the eighth place in terms of GDP per capita.

Customer Behaviour

To understand these phenomenons better it would be necessary to analyze the behaviour of Brazilian online customers. Some interesting insights about it can be found by research conducted by analyst Forrester about e-commerce in Brazil. Their survey on online stores found that cart abandonment rates in Brazil averaged at around 43%, compared to the rate of 56% found in the United States, while conversion rates were found to be lower than the ones of North American countries.

The same company published research about what the reasons were for cart abandonment by online customers. Some of the most influential factors for abandonment according to the survey were:

• High cost and duration for shipping
• Customers not ready to make purchases or only intended to compare prices
• High overall product cost

In the case of Brazil, reasons for cart abandonment related to shipping can mostly be related to the size of the country’s territory and the infrastructure and economic disparities between states. Shipping costs can vary in grades of 500% and take substantially more time depending on state and region.

The Southeastern states of Brazil show some of the highest conversion rates in the country and are also where most e-commerce businesses are registered. Around 63% of e-commerce companies in Brazil located in these states according to Sebrae, or the Brazilian Micro and Small Business Support Service. This encourages customers in these states to shop online, since shipping costs and duration are generally lower than in other locations.

Measures to Increase Customer Conversion in Brazil

Some measures designed to lower cart abandonment and increase customer conversion can have an especially high impact on the Brazilian audience.

Introduce lower freight or free shipping

Considering Brazilian customers have a high sensitivity towards shipping costs, this can be an effective measure to increase conversion rates.

Often Brazilian e-commerce companies provide free shipping without taking substantial loss of revenue. Common practices for this end include setting a minimum value for purchases to obtain free shipping, only offer the benefit to strategic regions where more customers are located and transportation costs are lower, and only offering the benefit to specific products or periods that require an increase in sales.

Improve customer communication channels

In the case of customers that abandon carts for being unsure about products and delivery, providing an effective communications channel can have a positive result in conversion rates.

One recently popularized practice by Brazilian e-commerce companies is to provide customer service chat on product pages where customers can have questions answered in real time.

Another interesting measure implemented by Brazilian e-commerce companies is to provide a Whatsapp contact number from which customers can trade messages and questions about a purchase to the support services. Data by Sebrae shows that customer support through Whatsapp is currently used by a surprising 18% of Brazilian e-commerce companies.

This method of communications can be specifically effective in Brazil considering its widespread adoption by the country’s public. A recently published report by Nielsen Ibope suggests that Whatsapp is used by close to 70% of Brazilian smartphone users, while other reports indicate that it is a prefered method of communication compared to phone calls or SMS.

Make purchases more transparent

Customers also abandon carts when they discover that shipping costs and duration or product costs were higher than expected very late in the checkout process.

A way to circumvent this is to make information about purchases very clear, and as early as possible. This includes for example, providing calculators for shipping costs and duration on product pages, while also displaying the conditions and cost for payment splitting and what are the available payment methods.

Product marketing and remarketing

Some of the top reasons for customers to stop an online purchase is finding products with higher costs than what is found in other stores or just not being ready to make a purchase at the moment.

Measures that help increase conversion rates in these instances include making a market analysis to set competitive pricing when compared to other stores and to inform customers by email about the abandoned carts in a way to reclaim purchases that could take place at a different time.