As we previously discussed in other blog articles, the pandemic is having a lasting effect on people’s online shopping behaviors around the world, with 2020 being a turning point for the digitalization of emerging markets, including Brazil.
For example, according to Reuters, Brazil eCommerce jumped almost 60% in the first five months of 2020 as more consumers have shifted to online shopping during the COVID-19 pandemic. The number of online orders grew by almost 66%, with cosmetics, furniture and electronics driving the growth. This trend was mainly boosted by the physical economy going digital. In developing countries like Brazil, a lot of small businesses had to go digital in 2020 in order to survive. Smaller merchants and traditional brick-and-mortar retailers had to undergo a digital transformation of their businesses so they could keep operating. But how is eCommerce in Brazil doing now? Read on to find out.
Brazil eCommerce losing momentum
Brazil’s eCommerce actually lost momentum during the summer months after physical retail sales returned towards pre-pandemic levels. This is not surprising and a similar trend has been seen in several other markets around the world. In fact, with the ease of lockdowns and restrictions as well as the acceleration of the Covid-19 vaccine rollout in Brazil, eCommerce sales went in the opposite direction of overall retail growth. According to one survey which measured the amount of sales in physical and online stores, retail sales in Brazil grew more than 23% in July 2021 compared to July 2020, while eCommerce dropped 9.6% during the same period. When looking in detail, we can see that the industries which grew the most in July were all part of the pre-pandemic physical world: restaurants (+85%), clothing (+66%) and fuels (+58%).
Is that trend here to stay?
This small drop in eCommerce to the benefit of physical retail might be short lived. In fact, it might all be due to seasonality and the fact that people can again experience a new found sense of freedom. But it does not mean it is here to stay.
When going beyond the summer months of 2021, it is safe to say that the eCommerce industry in Brazil is still in strong power mode with some underlying trends showing us the extent of the online sales increase in the region. For example, it is expected that 2021 will be another year of strong double-digit gains for Brazil’s mCommerce market. This trend can be found in other Latin American countries. In fact, while Brazil holds the number 1 spot in LATAM with a 34.9% growth in mCommerce year over year, other countries are also showing astonishing results with Mexico and Argentina’s mCommerce industries respectively growing 31.7% and 30.6%.
If mobile is about to capture more than half of retail eCommerce sales in Latin America next year, Brazil is taking a bigger and bigger part of the cake. As a matter of fact, Brazil and Mexico are becoming this year the region’s two largest retail mCommerce markets, representing almost 58% of all retail mCommerce sales in LATAM. It is expected that Brazil alone will represent nearly one-third (32.5%) of retail mCommerce sales in Latin America this year. All signs predict that Brazil has not yet said their last word.
Let’s not forget that in 2020, Latin America’s eCommerce market saw the most growth of any region, surpassing Asia-Pacific’s growth for the first time since 2010. Brazil was actually the fourth fastest growing eCommerce market in the world in 2020 with a 35% increase in online sales compared to the year prior.
Businesses that are selling digital products and that want to expand into emerging markets are well positioned to compete on a global scale using Softline Ecommerce. Our Global Hub for Digital Sales makes cross-border digital sales locally optimized, easy and safe. It has never been so simple to reach new customers and grow a business in emerging markets like Brazil. So, if you want to see what we can do together, don’t hesitate to contact us on our website, via Linkedin or email (email@example.com).