Until the 2010s, subscriptions were mostly associated with newspapers and magazines, whose commercialization relied heavily on this business model. From then on, it has evolved to deliver a growing variety of items across several industries – reaching an all-time high during the Covid-19 pandemic, when subscription clubs brought brands and consumers closer in the face of lockdown.
Indeed, subscriptions are all about building predictable revenue and customer loyalty. More than a convenient way to replenish products, they are a means to create community and help brands elevate the customer experience, presenting relevant, sometimes premium, or brand-new solutions that fit the public’s lifestyle.
In markets such as Brazil, they also appeal to one of Brazilians’ preferred payment methods (by credit card) and may advance foreign merchants’ market share through good old word-of-mouth, generating positive referrals and a shared brand experience in Brazilian Portuguese.
In this post, we listed cases in 5 industries leading subscription sales in Brazil to inspire your own planning for e-commerce. Continue reading to learn more!
A growing market rebooted
Coming off of the lockdown, subscriptions did see a quick dive from their pandemic spike. According to the April 2021 Subscription Commerce Conversion Index, only 52% of consumers in the US who signed up for a new retail subscription kept it after the lockdown. However, the share of subscribers planning to cancel their plans dropped from 19% in 2021 Q3 to 14% in Q4 – indicating that merchants are treading on safer ground regarding the development of new strategies.
Evaluated at US$ 15 billion in 2019, the subscription e-commerce market is actually expected to reach US$ 473 billion by 2025. Gartner reports estimate that 75% of D2C businesses shall take up the subscription model by the end of 2023 – motivated especially by its cost-effective, customer-centric nature, despite challenges in customer retention.
To counter hindrances, it is smart to leverage momentum in strategic industries for subscriptions. If you are interested in exploring the Brazilian market, check out in detail the booming fields below.
Key Industries for Subscription Clubs in Brazil
Beauty & Personal Care
Beauty merchants achieve significant results in Brazil, the world’s second-largest market for aesthetic treatments and procedures. GlamBox was one of the first subscription clubs to launch in the country, and still figures among the top cases in the Brazilian market. BeautyBox, UAUBox and Box Magenta follow as businesses with a solid base of subscribers.
Beyond the boxes containing make-up, skincare and hair care products, beauty subscription clubs are often digital media-savvy, harnessing tools to collect data and personalize deliveries. Digital content and interactive quizzes to profile subscribers’ needs are commonplace and neatly designed. Ecofriendly, cruelty-free brands are also gaining traction as a subniche, as illustrated by Sweet Eco Box and Care Natural Beauty, with some clubs adding wellness and home décor items to give their boxes a twist.
Food & Beverage
According to a Neotrust report, in mid-2020, online demand for food and beverage supplies had gone up by 241% in Brazil, including sales of food supplements via e-commerce. Enter 2021, and Betalabs found that the country registered 18% more subscription clubs than in the previous year – with alcoholic beverages coming in second in the general ranking.
After lockdown, food and beverage subscription clubs have been enjoying a lasting interest from Brazilian consumers, breaching organic foods, fit and vegan menus, desserts, alcoholic drinks and craft, locally brewed products (as showcased by Clube do Malte, Kiro, and Coffee++). Wine acquired several minor businesses to become one of the largest subscription clubs in Brazil, while merchants like Lidio Carraro deliver premium experiences through selected, signature items.
Subscriptions focused on entertainment range from reading clubs, such as TAG Livros and Leiturinha, to geeky boxes like Nerd ao Cubo. The boxes usually feature the subscription’s core product (books, T-shirts etc.) and assorted items per month, related to the subscription’s business or the box’s monthly theme.
TAG Livros is often listed as Brazil’s most famous subscription club, which renewed the traditional model of mail-order book clubs and gathered an audience large enough to fund its own publishing house and e-commerce (with special offers for subscribers). Leiturinha – a branch of PlayKids, a subscription-based app for child education and entertainment – targets child readers and counts over 170,000 families subscribed, also maintaining an online store.
Nerd ao Cubo keeps exclusively to the subscription-based model, delivering boxes with T-shirts, collectibles, and random geeky items. The premium service tends to the Star Wars fandom, offering a monthly box with licensed products.
Brazil reportedly comes third in the world ranking of pet owners, which already signals a great opportunity for business. On top of that, the pandemic increased revenues in the pet care market by 46%, as Brazilian consumers got to spend more quality time with their furry friends.
The long-term need for maintenance makes pet supplies ideal for subscription sales, as practiced by BOX.Petiko and Cobasi. Cobasi’s subscription club allows subscribers to replenish customary products, granting discounts in all sales points and pet care services. BOX.Petiko offers surprise goods monthly and attends to roughhouses with two boxes specially curated for biters.
Digital Goods & SaaS
Subscription clubs focused on digital products offer a slight variation from the traditional model, granting access to digital solutions generally marketed with a free trial period. The Software as a Service (SaaS) concept was popularized by Salesforce, the first enterprise to sell cloud computing solutions under subscription.
Streamings are now the most famous examples of digital goods subscriptions, having taken the cable TV business model to the next level. However, the nature of digital products enables virtually any tool for subscription. Solextron, for instance, employs artificial intelligence to manage solar energy systems, allowing B2B subscribers full access to their platform. And CisoRise launched a subscription-based fundraising tool, aiming to automate compliance and empower civil organizations worldwide.
Improve subscription management with PagStream®
With due planning and technology, subscription businesses can be highly profitable and improve customer relationship. To optimize both, payment processing must run smoothly, warranting cashflow and enhancing user experience.
At PagBrasil, we have been watching and preparing for the rise of the subscription market. We developed PagStream®, a solution tailored to streamline recurring payments and simplify subscription management in Brazil. Among many other benefits for your team, we highlight:
- Subscription management directly from the PagStream® dashboard, with no coding required;
- The Subscriber’s Portal, where subscribers can customize and modify their plans themselves;
- The PagStream® Promotion Engine, which sets up automated, personalized campaigns for subscriptions.
Contact us to know more about PagStream® and Brazilian payment methods and read further news on our blog to stay up to date!