eCommerce Insights and Trends Snapshot: Brazil

As one of the most advanced ecommerce markets in Latin America, Brazil is expected to continue to flourish over the next few years. Presenting many opportunities for businesses that wish to penetrate this market, the Brazilian eCommerce space also brings about specific complexities.

During the last couple of years, cross-border ecommerce revenues registered fantastic growth – and the trend continued over the past 12 months, with the cross-border transaction value increasing by 92%. Mobile payments accounted for 13% of all eCommerce traffic, compared to desktop devices which accounted for 87%. Despite the ratio of mobile payments compared to desktop payments being low, the value of mobile transactions has increased by 111%. All these developments are proof that the payments and ecommerce ecosystems in Brazil are experiencing

The Local eCommerce Space and Avenues for Online Shopping

Some of the most relevant factors driving online purchases in Brazil are cheaper prices, a greater product range, the possibility to avoid crowded places, and the overall more convenient way of comparing and choosing products. Therefore, convenience is king for Brazilian shoppers – and the most valued advantage of online shopping, according to Statista’s survey carried out in 2022, is direct delivery to their homes.

In terms of the main online avenues for merchants in Brazil, both search engines and social networks are popular, but it depends mostly on various ecommerce segments whether users prefer one or the other. For instance, furniture and appliances are reached mainly through search engines, whereas fashion and accessories, through social media.

Brazilian Consumers’ Preferences in Terms of Online Shopping

Of all the product categories available online, the most popular ones include electronics and media, accounting for 27% of the eCommerce revenue in Brazil, fashion and accessories with 22%, toys, hobbies and DIY with 19%, furniture and appliances with 17%, and food and personal care with the remaining 16%. The latter category of products available online registered significant growth particularly in 2021.

When we take a closer look at the online stores that are most popular in Brazil, we see that many of them are local players, such as Americanas, Magazine Luiza, or Casas Bahia. Magazine Luiza, one of the biggest ones in the Brazilian eCommerce market, had a revenue of USD 3.2 billion in 2021, followed by Casas Bahia, with USD 2.2 billion, and Americanas, with a revenue of USD 2 billion. EcommerceDB estimates that in 2021 these three stores accounted for 30% of online revenue in Brazil.

Major Online Shopping Events

One of the major factors driving eCommerce growth in the region is represented by seasonal retail dates which drive sales and attract new digital consumers each year. Some of the most relevant buying holidays in Brazil follow some particularities – and others, including Black Friday, Christmas, Easter, Mother’s Day, Father’s Day, and so on, follow global trends. In the last decade, these shopping events have proved to be a hit, breaking sales records every year.

Merchants who want to successfully penetrate the Brazilian market and build strong relationships with customers should consider these peak shopping periods – especially Consumer’s Day and Free Shipping Day. Consumer’s Day takes place on 15 March, and it has become a wellknown event in the country due to the major discounts that are available in the first quarter of the year. Another important factor for Brazilian shoppers in choosing to purchase online is the cost of shipping, hence the popularity of Free Shipping Day, which takes place on the last Friday of April and allows them to buy online without paying for products’ delivery.

When looking at the main trends per sector, ticketing and travel bookings are still going strong in Brazil. During the last twelve months, ticketing transactions have increased by 438% and travel by 139%. The travel sector also experienced a 15% (USD 126) growth in average transaction value (ATV). Since the end of the COVID-19 pandemic restrictions, there has been a pent-up demand for travel, as bookings experienced a 159% increase in domestic transactions, with the value of transactions reaching a 248% growth. Even with the current inflation, consumers seem to be increasing their discretionary spending.

In the retail sector, Brazil registered an overall 8% decrease in the volume of transactions, but the basket size grew. The ATV has increased by 64% (USD 124) due to economic uncertainty, leading shoppers to purchase more products to avoid inflated prices at a later stage. Cross-border

The Brazilian market saw a decrease in the volume of transactions for credit and debit cards. However, as shoppers tend to reduce their purchase frequency and increase their basket sizes, this has resulted in an increased ATV by 57% (USD 127). Although the rise of ATV could be seen as a result of inflated prices, this could also be explained by shoppers increasing their discretionary spending over mandatory spending. Owing to mandates and compliance upgrades focused on shoppers’ security, ACI customers experienced a 3% increase in approval rates in 2022 compared to H1 2021.

On the other hand, payment methods such as Buy Now, Pay Later (BNPL) and e-wallets have risen in popularity in the Brazilian market. One of the reasons behind the increased use of e-wallets is Brazilians’ concern over fraud targeting credit and debit cards – which led them to opt for a payment method that provides only tokenized details of their financial identity.

Consumers in Brazil have clear preferences when it comes to how and when they want to have their online purchases delivered to them. According to Statista, 66% of surveyed Brazilian online shoppers stated that getting their package delivered on the weekend was the most important option they could have regarding the delivery of purchased items, and 59% claimed that they would like to benefit from same-day delivery. Other important factors for Brazilian online shoppers are being able to choose the pick-up location and having the option to get their purchased goods delivered on Saturday.

As the fifth largest country in the world, Brazil’s geography may lead to logistical issues that ecommerce companies must be aware of. These challenges – that range from regions with no coverage from delivery

Refunds and return policies

The Brazilian Consumer Code provides the consumer the option to withdraw from the purchase of a product or service for purchases made via Internet, but it does not apply to purchases made in a physical store. The Brazilian Consumer Protection Code was introduced in 1990, and since then, it has been updated several times.

Besides having the right to withdraw from the purchase of physical and digital goods bought online, Brazilian customers are entitled also to compensation for any wrongful charges. They have the right of retraction within 7 calendar days from the date of signature of the agreement or from the day they receive the product or service sold. If consumers decide to exercise this right, they should be reimbursed by the seller promptly for the returned products and other transaction costs (expenses with postal services for returning the product and the monetary restatement).

eCommerce at the Cutting Edge: Social Commerce, vCommerce and Cryptocurrencies

The social commerce opportunity

In 2021, approximately 70% of the Brazilian population was on social media (150 million social media users). The number of users is estimated to have increased by about 7% (10 million) between 2020 and 2021, and data from Q3 2021 shows that the most popular social media platforms in Brazil by usage are WhatsApp (96.4%), Instagram (90.1%), Facebook (88.2%), and TikTok (69.9%).

By August 2021, approximately 26.5% of the consumers had made a purchase on social media live streams intended for eCommerce. Furthermore, the credibility of social media influencers in Brazil has reached more than 75%, and they are expected to continue using live streams to drive up social commerce sales. Social media commerce in Brazil is expected to grow by 44.9% and reach USD 2.2 billion by the end of 2022.

The future of AR/VR technologies

A study in 2017 found that 73% of interviewed consumers had an interest in shopping using augmented reality (AR) and virtual reality (VR) technologies in Brazil. What is more, another more recent study projected that between 2020 and 2023, investments in virtual transformation technologies such as AR and VR in Brazil should exceed BRL 4.9 billion (around USD 960 million).

Companies such as R2U offer AR/VR solutions to other companies, including retailers such as Mobly and Wood Prime. These two companies that sell furniture have implemented already AR features for their online sales – Mobly has created a phone app that shoppers can use to visualize items in their home, while Wood Prime has implemented 3D and AR models of furniture that customers can personalize and visualize in their chosen environment via a QR code that passes the image from a computer device to a phone.

Smaller initiatives to incorporate AR technology into sales have also been undertaken, such as when Lojas Renner partnered with Snapchat to create filters that allowed people to visualize how certain pairs of shoes would look on them.

Welcome to the metaverse

Brazilians also seem eager to join the metaverse. Banco do Brasil (BB) has joined a platform called GTA RolePlay, on a server called Complexo, where actions in the real world can be transferred to the digital – and vice versa. BB has two buildings in the virtual world, where customers can drive to and open bank accounts or receive benefits, actions that will be replicated in the real world.

Lojas Renner has also joined the metaverse through the game called Fortnite, offering visitors a virtual map of a store with games built into it and QR codes that players can scan to redirect them to Renner ecommerce sites, where players can purchase items from their collections.

Finder estimates that 14,4% of Brazilians own cryptocurrencies, placing them in 17th place globally for crypto ownership. A global study by Visa shows an even higher figure, stating that about 34% of respondents to their survey own cryptocurrency. The most commonly owned cryptocurrencies in Brazil are Bitcoin (28,4%), Solana (23,4%), and Ethereum (20,4%), and the age demographic of crypto users in Brazil shows that younger people are more interested in this payment method: about 61,9% are between 18 and 34 years old, 20.4% are between 35 and 54 years old, while only 17,6% claim to be over the age of 55.

In Brazil, it is possible to buy goods and services using cryptocurrencies at a number of stores, and you can even pay your Boleto using crypto through an intermediary such as Kamoney, PagueComBitcoin e BitBol. Some of the places where you can purchase items and services with Bitcoin in Brazil are

Unpicking the Fraud Factor

Brazil is one of the regions with the highest concerns regarding card testing, ID theft, and Phishing/Pharming/Whaling. With an upgrade in the mandates and an enhanced fraud management solution for merchants, the country has seen an 8% decline in fraud attempts. Issuing banks are slowly keeping pace with supporting technical abilities, and the transaction approval rates have also experienced a 2% decline.

As Brazilian shoppers increased their purchase values, there was a 1% growth in fraud attempts arising from cross-border transactions, while domestic transactions experienced a 15% decline in fraud attempts. Mandate upgrades led to increased security around transactions and a 4% improvement for credit and debit card transactions, with a 10% increase in approval rates for cross-border transactions.

As e-wallets become a hub to store tokenized bank or card details, Brazilian shoppers showed a higher affinity for e-wallets, resulting in an 18% increase in approval rates. This was accompanied by an 11% decrease in fraud attempts majorly arising from domestic e-wallet transactions.

The fraud component – payment channels and delivery methods

In Brazil, mobile devices experienced a 4% decrease in fraud attempts for cross-border transactions and a 2% decrease in combined (domestic and cross-border) mobile transactions. ACI customers are experiencing a 0.03% decline in chargeback rates.

Desktop devices, on the other hand, experienced a 9% drop in fraud attempts for both cross-border and domestic transactions. Driven by mandates and enhanced fraud management solutions, cross-border transactions experienced a 16% decrease in fraud attempts.

As BOPIS/Click & Collect becomes popular among Brazilian shoppers, it also experiences a 3% increase in fraud attempts. Merchants need to be more aware of cross-border transactions opting for BOPIS as they experience a 6% increase in fraud attempts

Fraud attempts per eCommerce sector

The travel sector registered an overall 5% decrease in fraud attempts. This is due to genuine transactions outpacing fraudulent transactions, as shoppers increasingly prefer to spend more on new experiences. ACI customers experienced a 0.03% chargeback rate. Ticketing registered a 1.4% decrease in fraud attempts, with a 3.5% decrease in fraud attempts for domestic transactions.

In Brazil, retail experienced a slight 1% decrease in fraud attempts, mainly arising from cross-border transactions with a 3.2% decrease in fraud attempts. Meanwhile, there was a 1.4% increase in fraud attempts for domestic transactions.

The gaming sector in Brazil experienced a significant 7% decrease in fraudulent transactions, primarily owing to new mandate upgrades. As for most online gaming transactions, a shopper’s sensitive information is stored on their profile as tokenized data, making it easier for genuine transactions to outpace fraudulent ones.

Does the BCB work directly with merchants or via PSPs? What costs does the merchant support for offering Pix?

The BCB does not serve end users, but provides an infrastructure that banks, non-bank financial institutions, and e-money issuers use to offer Pix to end users (consumers and merchants).

Pix offers an easy and cheap payment instrument to the general population. To guarantee widespread adoption, the BCB mandated that all authorized institutions with more than 500 thousand accounts (including deposits, savings, and pre-paid accounts) should offer Pix. Nowadays, almost 800 PSPs are connected to the Pix platform. Its open architecture levels the playing field between incumbents and entrants.

The BCB adopts a recovery-only policy, charging BRL 0.001 per transaction (roughly USD 0.0002) from the receiving PSP (transactions within accounts in the same PSP are not charged by the BCB, as it amounts to an internal book transfer). The BCB mandates financial and payment institutions with

What are the fees for using Pix (processing fees, late fees, and so on), and who supports them?

Individuals generally do not pay to receive or send money through Pix. Firms, however, may be charged by the PSP to make or receive a transfer through Pix. In a transaction, only the sender or the receiver will pay the fee (Pix rulebook explains in which situation the payer or the payee can be charged).

What are the typical credit acceptance rates you see with shoppers?

We do not have statistics on acceptance rates on Pix, but we have seen increasing use of Pix by eCommerce. Some studies already suggest that about 80% of eCommerce sites offer Pix, and about 25% of them offer discounts ranging from 3% to 10% for payments with Pix. This movement reflects, in part, a growing demand from customers to use Pix in payments. Although we do not have statistics collected on Pix’s acceptance rates, its expansion on eCommerce is evidence that adoption by merchants is probably growing.