Valter Klug, founder of Samba Rock, an ad & e-comm agency. 25 years of experience working with global brands. Let’s connect on LinkedIn.
With the rise of digital commerce reshaping global markets, I see many U.S. brands on the hunt for the next frontier. As it turns out, this frontier might be nestled in Brazil’s energetic streets and vibrant online market.
I was born in Brazil and arrived in the U.S. in 2009. Although I became an American citizen in 2018, I never left my Brazilian roots. In 2015, I started a boutique agency whose mission is to help Brazilian brands to expand into the U.S. market.
Despite these ties to Brazil, it wasn’t until recently, with the maturity of cross-border logistics combined with the growth of Brazilian e-commerce post-pandemic, that I saw a huge opportunity for American brands to sell their products to Brazil. After much research, I’ve decided to share some of my findings with you.
Brazil: A Thriving E-Commerce Hub
Brazil, known for its sprawling landscapes and diverse culture, is also home to a fast-paced e-commerce market. Brazil’s online sales reached roughly $18 billion in 2020, reflecting a staggering growth of 41% from the previous year. In 2022 that number grew to around $35 billion, and it’s expected to increase to approximately $39 billion in 2023. This same source also projects that there will be almost 88 million e-commerce customers in Brazil by the end of 2023.
I’ve found that a significant chunk of Brazilian consumers display a strong desire for international brands, with 68% of online shoppers in Brazil (registration required) saying they have bought from international merchants—with the U.S. being a popular choice.
Brazilians’ Affinity For American Products
The propensity for American products isn’t limited to online purchases. Brazilians, when traveling to the U.S., consider shopping a primary activity. Global visitors fueled more than $43.4 billion of shopping in 2019—or 27% of the total shopping driven by travel and tourism, according to the International Trade Administration. In 2018, 2.2 million Brazilians spent nearly $7.8 billion in the U.S.
While the pandemic significantly dropped the number of Brazilian visitors to the U.S., e-commerce boomed in Brazil. I see this as an opportunity. Considering that in the best year, only 1% of the Brazilian population travels to the U.S., American brands selling to Brazilians have a target audience that is 100 times larger if they decide to expand their brand presence to the country’s online marketplace.
The Tectonic Shift In Marketplace Preference
The dominant marketplaces at the center of Brazil’s e-commerce transformation include Amazon.com.br and Mercado Livre. This year, American giant Amazon surged to become the second-largest e-commerce platform in Brazil by user visits, with 187 million visits in May, while Mercado Livre leads with a robust 330 million visits as per data from the SEO agency, Conversion. I believe that these marketplaces can present a ready platform for U.S. brands with extensive consumer reach and strong infrastructure.
Cross-Border Logistics Simplified
One of the challenges of selling products internationally is international shipping. This complex process involves many steps—from picking up the goods from the seller, storing them in a warehouse, packing them up for shipping, handling all the customs paperwork in both countries and finally delivering them to the customer’s doorstep in Brazil. This is where cross-border logistics comes in.
When looking to break into Brazil’s e-commerce market, I recommend utilizing cross-border logistics since this removes the need to have a warehouse in Brazil. Also, companies selling cross-border don’t need to open a subsidiary or bank account in that country; they can operate directly from the U.S.
To simplify the process for U.S. brands, I think it’s important to have a logistics partner that’s an expert in this field. There are peculiarities of Brazilian logistics and the local culture that these partners can help with. This can allow your brand to focus on what you do best: making great products and selling them effectively.
The Importance Of Local Expertise
But making a splash in Brazil takes more than just opening an online store. It’s important to understand the Brazilian market and how to connect with local shoppers. Along with careful research of the market, a local marketing and e-commerce agency partner can also make a big difference.
To give you a taste of some of the differences in Brazilian business culture and practices:
• Brazil can be extremely bureaucratic; there are lots of regulations for every single little thing you do there.
• There are multiple taxes, and they are incorporated into the product prices (not charged separately like in the U.S.).
• Even the way many Brazilians behave in a business meeting can be different. I find that Brazilians do small talk 90% of the time and do business 10% of the time, while Americans do the opposite.
A results-driven agency with a local presence in Brazil can offer U.S. brands valuable insights about the unique business environment in Brazil, including consumer behavior and the legal aspects. They can help craft marketing campaigns that hit home with local shoppers and keep your online store running smoothly.
But I would beware of agencies with a presence only in Brazil. As evidenced above, business is done very differently in each country, so I recommend that you search for an agency that understands both markets to help bridge the gap between these two countries.
Another important thing to pay attention to is the track record of the agency. I recommend checking case studies and previous work delivered by the agency as a good way to measure their capability.
Seizing The Opportunity
There’s no doubt that Brazil’s online shopping scene offers a golden opportunity for U.S. brands. But to truly unlock this potential, I believe that you need to understand the market and find the right partners to guide you.
You want to find someone who understands the unique ins and outs of the Brazilian e-commerce scene and can provide the expertise needed to connect with local shoppers effectively.
Entering a new market is a big step. Always do your homework, learn the market and get expert advice before making your move. You will say “Obrigado” later.
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