April 12, 2018

Importance of Marketplaces in Brazilian E-Commerce

marketplaces

The marketplace business model has experienced great growth in Brazil in recent years. Throughout 2017, marketplaces have consolidated their position in the country’s e-commerce market. It has not only been Amazon that has expanded its operations in Brazil – it previously only commercialized books – but established players in the market, such as Mercado Livre, have also increased their sales volume.

 

The revenue from sales that originated in marketplaces – from both new and used items – reached a total of BRL 73.4 billion, 29.1% more than the previous year, according to the latest Ebit’s Webshoppers report. Considering only the sales of new products, the turnover of the segment was BRL 8.8 billion, representing nearly 18.5% of the total e-commerce revenue in Brazil.

 

 

Why are Marketplaces so Relevant in Brazil?

 

The numbers speak for themselves and show the relevance of marketplaces for e-commerce merchants in Brazil. In fact, many merchants base their entire e-commerce presence on marketplaces. However, it is important for online merchants to be careful when putting all their cards on marketplace platforms due to the constant changes in this environment, such as the new rules by the Brazilian Central Bank for marketplaces.

 

In addition to big players such as Amazon, Mercado Livre, B2W and Cnova, there is a growing list of niche marketplaces in Brazil. Although businesses already have a better understanding of what marketplaces are and how they work, consumers still struggle to understand the concept of a marketplace and who is responsible for what in the purchase process.

 

According to Ebit, 43% of the digital consumers affirm to knowing the term marketplace. However, out of those, only 62% knew in reality what it was.

marketplaces

 

Despite not understanding the business model completely, 89% of the buyers who purchased from marketplaces said they had a positive experience. Asked about why they opted to purchase at the marketplace (multi-choice question), the main answers were “better price” (74%), “more variety” (53%), “availability” (29%) and “better selection” (27%). Overall, 58% of the digital consumers in the country are considered heavy marketplace users, purchasing from these platforms four or more times a year. The average in Brazil is five purchases in marketplaces per buyer.

 

 

Payment Solution for Marketplaces

 

One of the challenges for marketplace owners is setting up a payment solution. Some players opt to handle payouts by themselves. They will collect the full amount for all the purchases carried out on their platforms, take their cut and proceed to pay their sellers. On the other hand, more and more marketplace owners opt to use an automated solution to split the payouts. PagBrasil, for instance, provides a fully automated solution that handles the entire payment process: payment processing and collection, as well as the payouts for marketplaces and all their sellers.

 

If you wish to learn more about our payment solution for marketplace, contact us.

/ Written by Bianca Lopez - Follow @biancatlopez

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