Brazilian E-commerce: Market Value of US$ 100 Billion

E-commerce can create US$ 100 billion in market value for internet companies in Brazil over the next five years. The forecast is from Fabrício Bloisi, CEO of Movile, a company that develops applications, games, educational materials, and payment methods. The segment today represents about 5% of retail sales in Brazil, compared to 20% in China. The Chinese e-commerce market generates US$ 1 trillion annually, while Latin America’s market is much smaller at US$ 25 billion. “We can create thousands of jobs and provide growth for the country,” highlighted Bloisi.For Stelleo Tolda, co-founder of the online marketplace Mercado Livre, the potential of e-commerce is still immense. Transactions on the site grew 71% in the first quarter compared to the same period last year. “The low penetration of e-commerce compared to other countries indicates that we have a lot of room to grow. China had our rate ten years ago and now it has reached 20% of all online sales. Credit card usage was low there, so they skipped steps and went straight to mobile device usage. We can also skip steps,” he said. Mobile purchases already account for about half of Mercado Livre’s revenue. Ten years ago, this rate was much lower. “They made internet access easier, which used to be a major bottleneck.”Luiza Trajano, president of the online store Magazine Luiza, said that the poor logistics in Brazil has driven innovations in her company, such as the creation of mini distribution centers in physical stores, especially in the countryside. “Delivery for pickup at physical stores is cheaper for us and for consumers,” Luiza said, noting that 60% of the Brazilian population lives with a monthly family income of less than R$ 2,000. “Everyone asks me if I’m afraid of the arrival of Amazon, but it’s good to see that Brazil is actually ten ‘Brazils’. There are many peculiarities, regional differences, logistical and tax issues. But it’s good to have strong competition.”For the executive secretary of the Ministry of Industry, Foreign Trade and Services, Yana Sobral Alves, an increasingly important obligation of the government has been to maintain a coordinated look at emerging regulations that may pose obstacles to e-commerce. She also added that the government has been dedicated to cutting bureaucracy, which could provide quick gains for the productive sector.