With the development of cross-border e-commerce, more and more sellers set their sights on the Latin American market, as Latin America’s largest emerging e-commerce market, Brazil has become the center of attention. Before you start your cross-border business in Brazil, you’d better learn something about Brazil.
Brazil is located in southeastern South America. It is the largest country in South America, also the world’s fifth largest country after the United States in terms of land area. The capital is Brasilia which has one of the world’s highest altitude. The country’s official language is Portuguese.
Brazil’s total population is about 203 million. The majority are white and mulatto people, 53.74% and 38.45% respectively of the total population. Brazil’s southeast regions is the most densely populated region, including Sao Paulo and Rio area where gathered about 23% of Brazil’s total population. In addition, the proportion of women in the Brazilian population is slightly more than men, accounting for 51%.
In terms of tax, Brazil has very complex and diverse tax policy. According to the administrative levels tax in Brazil can be divided into the federal tax, state tax, and municipal tax. Taxes of different products in different states can be various. There are several taxes that account for imported goods: the Import Duty (II), the Industrialized Product tax (IPI), the Merchandise and Service Circulation tax (ICMS), and the PIS/Cofins social contribution taxes. ALL these Taxes levied on a CIF (Cost, Insurance, and Freight) basis. For cross-border traders, they need to pay tax on IOF (6%) when to purchase foreign exchange. Besides, any removal of funds from accounts at banks would be charged on tax on CPMF (0.38%). So in general 6.38% taxes would be paid when acquiring the settlement in trading. In addition, for personal items, goods worth more than 50 US dollars, or the same merchandise over 3 pieces have to be declared tax.
In 2014, Brazil’s proportion of the total population of Internet users reached 57.6%, higher than the Chinese. And the average growth rate of Brazilian Internet users per year is about 3%, indicating that the e-commerce market in Brazil has a huge potential.
Electronic retail market
At the same time, Brazil’s electronic retail market grows at an average annual rate of 17.5%. It is expected that in 2016 electronic retail sales in Brazil could reach $ 22 billion.
Preferred online goods of Brazilians
According to the survey of the E-BIT in 2014, Brazil consumers tend to buy fashion apparel products, which accounted for 17% in the category of online shopping. The others in turn are cosmetics, perfume, personal and care products accounted for 15%, telephone and mobile phones accounted for 8%, books and magazines accounted for 8%.
The survey also shows that the order of the mobile raise rapidly from 4.8% in January 2014 to 9.7% in January 2015. 65% of the order is from the mobile phone, the other 35% from the tablet PC.
Brazilians used to pay in cash, and they like to pay by installments. In the local supermarket, the price is often reflected in the price of installment. In addition, the Brazilians used to go shopping at the supermarket on the weekend which is the most important time for consumption of the local people.
Brazilians also pay great attention to after-sales service. Despite the product quality is very good and is internationally renowned brands, when the other competitors provide consumers with a longer warranty period, the Brazilian general will choose the seller with the longest warranty period of the product.
In terms of the delivery, the E-bit survey shows that online shopping consumers in Brazil are more concerned about the price of the delivery, not the speed of delivery. 59% of consumers care about the price of the goods and only 20% of consumers care delivery speed. In addition, according to the survey of 2014 of SPC Company, 39% of online shopping users would take free shipping as an important consideration factor before make an order.
Brazil passionate gamers
According to statistics, there are about 48 million gamers in Brazil in 2015. 56% of the players will spend money in the game, and the money each player spends in the game amounted to $ 43.54 on average. In 2015, the game industry revenue in Brazil reached $ 1.5 billion, ranked 11 in the world, of which 22% of the proceeds from the game on a mobile device. It is estimated that within the next three years, the revenues of mobile games in Brazil will reach $ 800 million.
On the type of game, the social games and casual games are most popular in Brazil, while MMO (Massively Multiplayer Online, a massively multiplayer online) game is also attracting more and more Brazilian players. In terms of gaming devices, 96.5% of the Brazilian players accustomed to playing games on the computer, followed by the mobile phone (70.9%), television (69%), and other handheld devices (36.4%).
Brazilian online payment methods
Currently, Brazil’s main online payment methods are credit cards, Boleto, online banking transfers, most online transactions are paid using these three ways.
Boleto is one of the most popular payment methods in Brazil. It is the local way of a cash payment, which is jointly supported by several Brazilian banks. Consumer print bar codes after ordering online, then use bar codes in ATM machines, online banks, post offices, supermarkets and so on to complete cash payment. Once finished payment, no protest and counterfeiting, transactions of merchants 100% secured. Problems caused by stolen credit cards of consumers can be exempted.
For those who deciding conduct e-commerce business in Brazil, Oceanpayment offers a complete payment solution that can support Boleto payment, credit card transactions, and local Brazilian real-time bank transfers of online banking, covering all major Brazilian online payment types
Meanwhile, Oceanpaymeny is currently the only cross-border payment platform in China that is able to support Brazil installment, which can help cross-border merchants to meet the local consumption habits, to improve their order conversion rate.