Last updated: 13 November 2015
In recent years, the e-commerce sector has expanded rapidly in Brazil and the country has turned into the main market for online stores in Latin America. In this article we will give an overview of the profile of e-commerce customers in Brazil.
Growth of E-commerce in Brazil
The Brazilian population has experienced substantial changes in the last years, such as the increase in purchasing power, the increase in access to broadband connections, the explosion in sales of connected devices, among others. For the e-commerce sector, these phenomenons led to a massive increase in the number of Brazilians that made purchases online, and contributed to making the country one of the major markets for e-commerce in the world.
According to analyst E-bit, from 2011 to 2014 the revenue for the e-commerce sector in Brazil increased 91.4%, reaching BRL 35.8 billion. During 2015 yearly growth rates are expected to be maintained, leading the e-commerce sector to reach a total revenue of BRL 43 billion. Close to 8 million Brazilians make their first online purchase each year, a rate that contributes to the sustained growth the sector has experienced recently.
Currently, Brazilians from all regions and social segments are becoming e-commerce customers, even though certain groups still display a notably higher affinity for this sales channel. For e-commerces that plan to start operations in Brazil, understanding the characteristics of the Brazilian audience, especially in terms of the most common habits for online purchases, could substantially improve their chances of success in the country and help in shaping a viable strategy to enter this market.
Demographics by Region, Age and Social Class
Some Brazilian regions are known for concentrating a substantial portion of the country’s population and for displaying higher adoption rates for technologies like broadband connections and connected devices, so it should be expected that these would also be the regions that hold the most e-commerce customers. According to E-bit research, the regions responsible for the most e-commerce orders in Brazil are:
- Southeast: 64.5%
- South: 13.7%
- Northeast: 12.9%
- Central-West: 6.1%
- North: 2.8%
Their research was able to assess the age segments that are most important for the e-commerce sector, and discover that most customers in Brazil are aged 35 or above. The current age profile of Brazilian e-commerce customers are:
- Up to 24 years: 8%
- 25 to 34 years: 22%
- 35 to 49 years: 37%
- Over 50 years: 33%
The social classes most relevant for the e-commerce sector in Brazil are the middle to lower classes, which are the most numerous in the country and have recently gained increased access to technologies such as broadband connections and mobile devices. The social classes that represent the most e-commerce customers, divided into categories of monthly household earnings, include:
- Less than BRL 3.000: 40.34%
- Between BRL 3001 and BRL 5000: 21.99%
- Between BRL 5001 and BRL 8000: 15.30%
- Over BRL 8001: 15.09%
Payment Methods and Purchase Conditions
In terms of the most used payment methods, credit cards and Boletos Bancários remain the ubiquitous choices for e-commerce customers in Brazil. A payment method category that has increased its adoption as of late is the one of co-branded store credit cards, which appeal to customers due to the offering of special discounts and loyalty programmes. Some of the most popular payment methods for e-commerce in Brazil are:
- Credit cards: 73.7%
- Boleto Bancário: 19.2%
- Debit Cards: 2.5%
- Co-branded cards: 2.1%
Credit cards in Brazil are commonly used to split payments into multiple installments, and this practice is adopted by the majority of e-commerce purchases made using this method. According to surveys, only four out of ten credit card purchases are paid through a single installment, while payments split into three installments represent 13.5% of these purchases and payments split into ten installments represent 11% of them. E-commerce customers in Brazil that use credit cards split their payments on average into 3.7 installments.
A purchase condition that has become common for e-commerces in Brazil over the last few years is free shipping, which is mostly offered for customers in regions next to the largest urban areas and distribution centers of the country. Overall, close to 45% of e-commerce purchases of physical goods in Brazil are granted free shipping.
Devices Used and Place of Purchase
Brazil has experienced a rapid increase in the sales of mobile devices in the last years, which has impacted the number of e-commerce purchases made through these devices. Most of the largest online stores in Brazil have implemented pages with responsive designs or launched mobile device apps in order to cater to this growing audience. Currently, 89.9% of e-commerce purchases in Brazil are made using desktops, while 10.1% of them are made through mobile devices.
Due to factors such as convenience and security, 95% of Brazilian e-commerce consumers make purchases at home. However, there are also other types of locations that are used to make online purchases. These include workplaces, used by 46% of consumers to buy online, and friends` houses, where 9% of consumers make purchases.
Popular Categories and Cross Border Purchases
In terms of volume of sales, categories such as fashion and accessories, home appliances, mobile phones and cosmetics remain the most popular for Brazilian e-commerce purchases. However, in terms of sales revenue other categories are found to be the most important for e-commerce in Brazil. These include:
- Home appliances: 25%
- Mobile phones: 18%
- Electronics: 12%
- Computers and accessories: 12%
- Home and decorative items: 7%
- Fashion and accessories: 6%
- Cosmetics and perfumes: 4%
- Sports and leisure: 3%
- Books: 2%
- Toys and games: 2%
- Car accessories: 2%
- Construction materials and tools: 1%
As of recent years, the number of purchases made from foreign e-commerce websites by Brazilian customers has increased substantially, mostly due to the increased offer of lower priced products in these stores. It is estimated that 38% of e-commerce customers in Brazil make purchases from foreign online stores, and some of the most commonly purchased categories include:
- Fashion and Accessories: 33%
- Electronics: 31%
- Computers and accessories: 24%
- Cell Phones and accessories: 12%
- Sports and leisure: 12%
- Cosmetics and perfumes: 11%
- Car accessories: 11%
- Books: 10%
- Home and decoration: 9%