The Brazilian e-commerce market has experienced great growth in past years. Unlike the traditional retail segment, which has seen a decrease in sales, the e-commerce market has managed to maintain a positive growth trend. Each year, more and more Brazilian consumers purchase online and a growing number of them choose to buy on international websites. According to E-bit’s Webshoppers report, in 2016, 21 million Brazilian consumers made a purchase at least once on a foreign website. The number represents 44% of all digital buyers in the country. Another study, by the Confederação Nacional de Dirigentes Lojistas (CDNL) and Serviço de Proteção ao Crédito (SPC), points out that 22% of consumers regularly purchase on international e-commerce websites.
Why Brazilians Purchase Cross-Border?
The internet plays an essential role in reducing the global commerce borders. Consumers can simply sit comfortably in their houses – or be anywhere really thanks to the massive adoption of smartphones – and browse online stores from all over the world. This is no different for Brazilian consumers. But why are they purchasing cross-border? According to the research by CDNL and SPC, the main reasons are:
- Better prices – mentioned by 76% of all interviewees.
- Possibility of finding items that are not easily accessible in Brazil – mentioned by 53% of all interviewees.
- Variety of products – mentioned by 48% of all interviewees.
Challenges for Cross-Border Purchases
When buying on international websites, sometimes Brazilian consumers encounter some difficulties, such as:
- Long delivery time: often, when purchasing physical goods cross-border, Brazilian consumers wait at least 30 to 40 days to receive the goods. In this scenario, it is essential that international merchants selling to Brazil test different shipping methods to find the one that delivers the best service for their business. In addition, working with a local logistical partner can also help reduce the delivery time.
- Lack of local payment methods: if the international website is not working with a local payment processing service, Brazilian consumers will need to have a credit card enabled for purchases in a foreign currency. Most of the local cards are only enabled for purchases in BRL. But even when they allow purchases in a different currency, Brazilians avoid doing so. We explain more here. Furthermore, without a local payment provider, popular payment options, such as installment payments and boleto bancário, are not available for buyers.
- Difficult reverse logistic: just like the difficulties for delivery, reverse logistic can be a pain for both consumers and retailers. Again, partnering with a local logistical service can reduce the troubles.
- Import taxes: In theory, every good purchased on a foreign website is subject to taxation upon arrival in Brazil. However, in practice, the Brazilian customs fail to collect taxes on every parcel derived from purchases on international e-commerce stores. In most cases, even after the goods are taxed, the final price is still better than what Brazilian consumers can find in local stores. Many consumers are not aware of how this works and some just prefer to take their chances. Because of the lack of information about import taxes, it is essential for international merchants to make this information clear at the checkout. Depending on the type of product sold and the average sales price, it is even recommended to pre-pay the taxes and add the amount to the final product of the price. Read more about this here.
Despite the difficulties, Brazilian consumers do not plan to stop purchasing on international websites. In fact, the E-bit’s Webshoppers report pointed out that 59% of consumers intend to continue buying online from foreign shops. Brazil offers a great opportunity for international merchants selling into the country, but it is important that they follow some guidelines to ensure their success in the Brazilian market. If you want to know more about this, contact us.