Last updated: 19 January 2015
The revenue stream of e-commerce in Brazil is split into multiple social classes and regions. In this article we will highlight the main social classes and regions e-commerce revenue in Brazil come from.
Digital Accessibility in Brazil and E-commerce
The Brazilian population still has lots of ground to cover in terms of digital accessibility, considering that recent research suggest that only 53% of the country’s 202 million citizens are active on the internet. Most of the population that is yet to have access to the web come from under-developed states where connections are still expensive and unreliable, even if recent government efforts have tried to improve this scenario.
The indicators of e-commerce revenue in Brazil reflect on this social inequality and display the potential for growth in this sector in the country. The data shows that certain social classes and regions of Brazil are effectively embracing e-commerce, while others seem to be taking their first steps with online shopping. Because of this segmentation, merchants in Brazil must be aware of the potential for each social class and regions and segment their marketing efforts accordingly.
The combined revenue for Brazilian e-commerce amounted to BRL 28 billion in 2013, according to market researcher E-Bit, and demonstrates a high potential for growth in the near future considering the introduction of customers from new social classes.
The five regions of Brazil show vastly different indicators towards online accessibility and aptitude towards e-commerce.
The most important region in the country in terms of economy has a population of 85 million and a GDP per capita of BRL 29,700. Data from September 2014 by Anatel, or the Brazilian Telecommunications Agency, shows that the region has a 50% rate of connected households, the highest found across all regions.
Unsurprisingly, this is also the region that concentrates the largest revenue for e-commerce in Brazil. Data from SEO specialist Conversion reveals that the wealthy and highly populated states of São Paulo, Rio de Janeiro and Minas Gerais, combined with Espirito Santo gather over 72% of all e-commerce revenue. Not only this but these are also the states with the highest number of registered e-commerce businesses in the country: 63% according to Sebrae, or the Brazilian Micro and Small Business Support Service.
The third most populated region in Brazil has a GDP per capita of BRL 25,600 and a population of 29 million. According to Anatel, the region has an internet penetration rate of 41%, the second highest in the country.
Data by Conversion shows that the South states are responsible for 11% of the revenue for e-commerce in the country, which makes it the second most important region for this sector. According to Sebrae, it is also the region with the second most registered e-commerce businesses in Brazil, at around 20%.
The second most populated region in Brazil has a GDP per capita of BRL 11,000 and a population of 56 million. Anatel data shows that the Northeast has a surprisingly low internet penetration of around 16%, which can be attributed to the large number of poorly developed municipalities and the lack of coverage from the country’s internet backbone.
Data by Conversion reveals that the region is responsible for 9% of all e-commerce revenue in the country, concentrated in the states of Bahia, Pernambuco and Ceará. Research by Sebrae indicates that 8% of Brazilian e-commerce companies are located in the Northeast.
The least populated region in the country has an average GDP per capita of BRL 29,800 and a population of 15 million. Anatel data shows that the region has the third largest internet penetration rate in Brazil, at 36%.
Research by Conversion shows that the region’s states produce a combined 5.2% of e-commerce revenue in the country. Additionally, 4,6% of Brazilian e-commerce companies are located in the Center-West, according to Sebrae.
The fourth most populated region of Brazil has a GDP per capita of BRL 14,100 and a population of 17 million. Anatel data shows that the North region internet penetration rates are the lowest in the country, at 14,80%. Considering this is the largest region of the country and that it is where the Amazon forest is located, this rate can be linked to the high prices for internet connections in far away regions and the lack of coverage from the country’s backbone.
Data by Conversion shows that only 2.1% of all revenue for e-commerce in Brazil comes from this region. Sebrae research also points to the lack of e-commerce companies in the North, with 2.8% of Brazilian companies located in the region.
Brazilian social classes are also an important segmentation parameter when is comes to internet accessibility and e-commerce adoption.
A and B Classes
According to data by Catelem BGN, around 22% of Brazilians are in social classes A and B, which encompasses families with monthly incomes upwards of BRL 7,200.00. These are the Brazilians who are most connected to the internet, according to data by CGI, or the Brazilian Internet Steering Committee. Their research from 2013 shows that 97% of citizens belonging to class A and 78% of citizens belonging to class B were online.
The A and B classes are also the most important classes in terms of e-commerce revenue, with 61% of buyers belonging to these classes according to data from Nielsen Ibope. They are also the ones that shop the most on foreign websites, according to the same research. A and B classes are responsible for 78% of all Brazilian purchases at foreign e-commerce companies.
The rapidly expanding Brazilian middle class currently encompasses 54% of the population, according to Catelem BGN, a section that represents families that earn between BRL 2,900.00 and BRL 7,200 per month. Data from CGI shows that internet penetration for this social class has been expanding in the last five years, with 49% of these citizens currently having access to internet connections.
Nielsen Ibope data shows that this is also the social class that is most quickly adopting online shopping, currently taking up 35% of all online consumers in the country according to Nielsen Ibope. The C Social class is also where 21,7% of all Brazilian purchases from foreign e-commerce companies originate, according to the research.
D and E Classes
Brazilian citizens with monthly earnings inferior to BRL 2,900 fit into social classes D and E, which represent 24% of the Brazilian population according to research by Catelem BGN. These are the social classes least connected to the internet, with a combined 17% penetration rates, according to CGI.
Only 4% of these individuals shop online, according to Nielsen Ibope. The research also shows that these classes combined represent 0.4% of Brazilian purchases from foreign e-commerce companies.