A subscription box business can be a very sustainable business model, as it relies on customers loyal to your brand.
The subscription market is on a fair rise: by 2025, the subscription economy is expected to reach a UDS 478.2 billion valuation. And we can see why: subscription-based businesses grow five times faster than traditional businesses, according to Zuora.
In Brazil – Latin America’s largest e-commerce market – subscription box businesses are also growing. PagBrasil’s exclusive survey showed that 88% of consumers who subscribe to a subscription box will likely subscribe to another product or service in the next six months.
So, if you are studying to expand your subscription box business in Brazil, you should learn a few things to succeed in this market. Luckily, we’ve narrowed down a few numbers and tips for your business to thrive. Continue reading and discover more!
What is a Subscription Box?
A subscription box is a recurring service where consumers sign up to receive a selection of products delivered to their doorstep regularly or a set of curated content made available digitally – often centered around a specific theme or interest, such as beauty, food, fitness, books, or hobbies.
In Brazil, PagBrasil’s survey found that Digital Services are the most popular subscription category, followed by Entertainment, Health and Wellness, Beauty, and Fashion. Leading subscription box businesses include TAG Livros, Wine, and Clube Extra.
The State of Subscription Economy in Brazil in 2023
We know that the subscription economy is trending worldwide. And Brazil is no exception: according to the Associação Brasileira de Comércio Eletrônico (ABComm), subscription clubs were responsible for generating BRL 1 billion in revenue in the Brazilian economy.
So, who are the consumers joining this movement in Brazil?
Southeastern Brazil represents most of the subscribers in this survey, with 58% living in the states of São Paulo, Rio de Janeiro, Minas Gerais, and Espírito Santo. The age group from 18 to 30 covers 38% of subscribers, whose average age is 34.
And what drives consumers to subscribe to recurring products and services?
Although subscribers value convenience, exclusivity is the main factor driving consumers’ loyalty to a subscription club. When it comes to rating subscription clubs, emotional factors matter just as much as rational ones.
For more insight on the subscription market in Brazil, be sure to subscribe to our newsletter to receive our exclusive report, which will soon be available in English!
Or access our Portuguese version here.
How to Start a Subscription Box Business in 5 Steps
If you are planning to start a subscription box business in Brazil, there are a few things you should take into consideration. Here are five steps to building a recurring business in Brazil!
1 – Select a niche
Choose a niche or target market for your subscription box, considering the interests, preferences, and needs of the Brazilian consumer market.
You can select a topic of interest among subscription segments and market your brand as a specialist in that field. Like, for example, launching a streaming service dedicated to a specific sort of content.
2 – Set the right prices
Setting up prices in Brazil can be tricky, especially if you are a cross-border merchant. In addition to the cost of sourcing or producing items, packaging, shipping, and other operational expenses, sellers should also consider factors like exchange rates and taxes. Fortunately, a local payment partner can help you navigate these complexities – so be sure you pick a trusted Payment Service Provider (PSP).
Read also: 6 Things to Consider When Choosing a PSP for Brazil
3 – Maintain a steady operation, including logistics
Establish a streamlined and efficient operational process to handle all aspects of your subscription box business, including procurement, inventory management, packaging, and shipping. Pay special attention to logistics, as Brazil is a geographically large country. A logistics partner can help you ensure reliable and timely delivery of your boxes to subscribers throughout the country.
4 – Choose reliable platforms
Select a reliable e-commerce platform or subscription box management platform to handle the technical aspects of your business. Look for platforms that offer features specific to subscription-based businesses, such as recurring payments, subscription management, and customer analytics. Consider popular platforms in Brazil, such as Shopify, VTEX, and Salesforce Commerce Cloud.
5 – Set up multiple support channels
Provide various channels for customer support and communication. This includes email, social media, chatbots, phone support, and WhatsApp – especially given the fact that Brazil is the largest market for WhatsApp outside of Asia.
Make it easy for subscribers to reach out to you with questions, concerns, or feedback. Providing a subscriber portal can help customers address their needs quickly and make changes to their subscriptions easily, reducing your churn rates in the long term.
How to Pick the Right Subscription Platform
One of the most important steps to starting a subscription box business is choosing the right suppliers, starting with an e-commerce platform. Shopify holds the second-largest market share of e-commerce platforms used in Brazil, and it offers the easiest ways to offer subscription services through a wide range of third-party apps.
With PagStream®, PagBrasil’s exclusive solution, Shopify merchants can rely on a comprehensive tool for subscription management.
PagStream® for Shopify comes with:
- 1-Click Subscription, a feature that allows merchants to offer subscription products with just one click. Learn more
- PagStream® Promotion Engine a sophisticated solution for creating promotional campaigns for recurring subscription products. Discover
- PagStream® Subscriber Portal. See how it works
- A wide range of local payment methods, like Pix, Boleto Flash®, and credit cards with installments
- Flexible rules that allow you to offer custom-built subscription plans
- And much more!
Learn more about PagStream® and get in touch with our team!
