São Paulo – After two years of the pandemic, with 81% of the population vaccinated, life has returned to the old normal in Brazil in the second half of 2022. Stores reopened, a large part of Brazilians returned to in-person work, smiles reappeared from behind the masks. But at least one habit has changed forever: How to buy. It is estimated that due to the confinement, which was stronger and stricter in the first year of the COVID-19, in 2020, almost 20 million Brazilians started buying online, which accounts for 10% of the population.
E-commerce more than tripled over the period. “As stores and supermarkets closed, people that were averse to the digital world had to adapt and embrace it,” said Roberto Kanter, retail consultant and MBA professor at the Getulio Vargas Foundation (FGV). Payment methods have also evolved, becoming more fluid, less complicated, which has helped it.”
The world of sales has changed in Brazil. The largest marketplaces, like Mercado Libre, Magazine Luiza (Magalu), Americanas, and Amazon, that already used to offer product diversity and fast delivery, became even more sought-after during the pandemic. On the other hand, they also became larger and faster. Magalu alone saw a 149% growth in the past two years. Mercado Libre even invested in its own fleet of aircraft in late 2020, to deliver even faster. Newbies that arrived recently, like Shopee, have already won Brazilian hearts – and credit cards.
“There has been a large investment in technology, especially from Mercado Libre, which is now Brazil’s leading marketplace,” said Ricardo Pastore, professor at the Retail Lab of the Higher School of Advertising and Marketing (ESPM) and consultant. “Mercado Libre, just like Amazon, is constantly changing its model and improving its logistics.” The Argentine company is now a huge conglomerate that includes other brands like Mercado Pago and Mercado Envios. The company has operations in 18 countries, and Brazil alone accounts for 56% of its net income.
Small-sized enterprises jumped significantly, too. Sales via Instagram, Facebook and WhatsApp ensured the survival of those who had to close the doors for months. “The pandemic also fast-tracked the empowerment of vendors, who take initiative and send out offers through multiple channels. Everyone became a walking Shoptime,” Kanter said. The boom of livestreams that continues to this day is an example of that.
This combination of physical and digital experiences, which is here to stay and is expected to improve more and more, is now called phygital. The concept includes more futuristic innovations like cashierless stores, such as US’s Amazon Go, and more trivial things, like restaurants that publish their menus on Instagram or send them via WhatsApp. Throughout the pandemic, much was said about innovations like virtual tours in stores with 3D glasses, apps to try on outfits online, and other technologies that, in the words of professor Kanter, are more to “sell lectures and books” than reality. “They’re trends, and as such they may or may not become a reality,” he says.
To sell in Brazil
As the e-commerce is growing year by year in the country, anyone that wishes to enter the Brazilian retail market must have an online presence. It can be a simple Instagram page created to sell items imported from Lebanon or a store owned by an Egyptian on Mercado Libre.
It is important to keep in mind that nobody goes anywhere without their phones, which makes them a very powerful purchasing tool, like a 24/7 supermarket, with a multitude of products and offers always at hand. And Brazilians love social media: We are the world’s third country that use it the most, at 150 million users accessing them every day (connecting at 8 am and disconnecting at 10 pm, according to a survey conducted by software firm NordVPN). Another survey on purchasing habits conducted by software firm CapTerra says that over 62% of the Brazilians have bought via social media. Thus, being in Brazil means being within these ecosystems.
Pastore says that Brazil is a hard-to-reach country, and that it is not easy to understand local bureaucracies and dealing with Brazil cost. “But thanks to the online world, now it’s easier to be here. Foreigners that wanted to sell in the country used to have to hire a commercial representation, a staff, spend a buck. Now, with digital marketing, partnerships, and B2B strategies, it became a lot easier.”
Nevertheless, he advises: You have to know Brazil. Studying what works and what doesn’t for each product. Is it worth to create a virtual store within the large marketplaces just to sell olives? Or do you have to be in the cash and carry? Is it worth to sell in bulk and pack here to cheapen the product? It will all depend on the price you want to sell at and the audiences you want to reach. For food sellers, it’s important to stress the importance of the supermarkets in the life of Brazilians: Even with post-pandemic online habits, consumers here love to walk around the market. Cash and carry stores now account for 50% of the food sales in Brazil. If an olive oil brand is in only two Brazilian cash and carry stores, it will get to 20% to 30% of the consumer market with only two clients,” Pastore estimates, stressing the success of minimarkets, too, like ever-growing Mexican chain Oxxo.
For Kanter, if your goal is to be known and sell as much as you can, you have to be everywhere through the so-called penetration strategies. If it is a food product, it has to be in markets of all sizes, restaurants, especially those with delivery services like iFood (another firm that saw an exponential growth during the pandemic), small online stores in major hubs and retail partners. If it is clothing or electronic items, the online presence should be even stronger.
It is also key to know the purchasing habits of Brazilians. Christmas, for example, is still the top-selling date, with clothing and lower-value items being the most popular products. The Black Friday in November, which has become a major date in the national calendar, is focused on higher-value products like electronics and appliances. “People wait the date to change their phone, their computer, their refrigerator, with more generous discounts,” Pastore says.
Finally, it is important to remember there is huge room for imported products to grow here. “Brazil works poorly with imports,” Pastore believes. “We don’t have the best olives in the world, the best olive oils in the world, the best wines in the world. But it’s worth investing, learning, adapting. It’s a huge market and always eager for new stuff.”
Free flight
One of the most well-known olive oils by Brazilians, Portugal’s Andorinha, present in restaurants and market shelves has also gone online. In 2021, they launched the website www.compreandorinha.com.br, which is within the Mercado Livre platform. On virtual store, there’s the whole portfolio of the brand, which belongs to the Sovena group, including products focused on a more discerning public of olive oil lovers, like Andorinha Criações do Brasil por Bela Gil and Andorinha Primeira Colheita, made from fresher, younger olives. The advantages of buying online, products can be bought in 12 installments and same-day delivery, depending on the city (some capitals like São Paulo and Salvador). According to the firm, the digital presence is increasingly decisive in building a distinctive interaction with consumers. Andorinha has been in Brazil for 90 years and dominates a market share of 25% of imported olive oil.
*Special report by Débora Rubin for ANBA.
Translated by Guilherme Miranda
