E-commerce could create US$ 100 billion in market value for internet companies in Brazil over the next five years. The prediction is by Fabrício Bloisi, CEO of Movile, a company that develops applications, games, educational materials and means of payment. The segment today accounts for about 5% of retail sales in Brazil, compared with 20% in China. The Chinese e-commerce market moves US$ 1 trillion every year, while Latin America’s stands at a much lower US$ 25 billion. “We can create thousands of jobs and provide growth for the country,” Bloisi highlighted.
For Stelleo Tolda, co-founder of online marketplace Mercado Livre, the potential of e-commerce is still immense. Web site transactions 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 ten years ago had our rate, and now has reached 20% of all sales online. Credit card use was low there, so they skipped steps and went straight to using mobile devices. We can skip steps too,” he said. Mobile purchases already account for about half of Mercado Livre’s revenue. Ten years ago, that rate was much smaller. “They facilitated access to the internet, which used to be a major bottleneck.”
Luiza Trajano, president of online store Magazine Luiza, said that poor logistics in Brazil have spurred innovations in her company, such as the creation of mini distribution centers in physical stores, mainly in the countryside. “Delivery for pick-up in the physical stores is cheaper for us and consumers,” said Luiza, noting that 60% of the Brazilian population lives with household income of less than R$ 2,000 a month. “Everyone asks me if I’m afraid of Amazon’s arrival, 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 duty of government has been to keep a coordinated look at emerging regulations that could pose obstacles to e-commerce. She also added that the government has been dedicated to cutting red tape, which could provide rapid gains for the productive sector.