Brazil, the most populous country (198 million) in Latin America with the highest internet penetration rate (over 40%) in the region, has already become one of the fastest growing e-commerce markets in the world. But until I had a precious chance to have a phone chat with Mr. IN Hsieh, COO and cofounder of baby.com.br, I would never be able to get so closer to this booming market. Across the ocean, even thousands miles away from this remote country, I felt I almost inhaled the online passion and entrepreneurship right there.
Baby.com.br is one of the most promising online baby startups in Brazil. Founded in 2011, it already secured USD 16.7 million series B fundraising, from Accel partner and Tiger Global. Its COO and cofounder, Mr. IN Hsieh, a native Brazilian Chinese, has profound experiences in local e-commerce and now is aiming high for his new adventure of online baby care. He is an extremely kind and knowledgeable e-commerce specialist and I am afraid my clumsy writing would fail to bring out his outstanding insights in the most glowing colors. Still I am obliged to share part of his abundant expertise, albeit not every detail from him, since my little blog space would not permit.
Brazil has a long history of merchants offering installment credits — a system where buyers finance their purchases with partial payments made over a period of time. This consumer behavior has transferred into the online business as well. Today, around 53% of all online card transactions, from low end to high end products, take advantage of installment. According to Mr. Hsieh, Brazilian consumers simply consider installment is part of their financial planning, and retailers often need to take on interest rate, split payment into installment and finance many purchases.
Though over 75% of the online payment is made through credit card, Boleto, a slip payment method, perhaps nowhere to find except in Brazil, is also very popular among first time online buyers or consumers without credit card. It is a system in which a bill is issued for customer who demands later payment at a post office or bank branch. No order would be transacted until retailers receive customers’ proof of payment.
Social oriented e-commerce
Brazilians are definitely social media savvy. The country has the second largest number of users both for Facebook and Twitter. Facebook is the most influential social site in Brazil, which explains why Baby.com.br has cultivated over 1 million facebook fans. According to TNS digital life, in a cross country comparison of social media impact, Brazilians are more prone to consider social media is a good source for understanding products and doing purchase.
In the mean time, however, traditional TV channel has not lost its luster. Mr. In Hsieh emphasized that how important to have Brazil’s most famous TV presenter and singer Angélica as his company’s shareholder and celebrity endorsement. Additionally, he told his company is in partnership with P&G; recently they accomplished a very successful online promotion which was in fact integrated with a TV show.
Of course, Mr. In Hsieh concluded that there is no eye-opening digital campaign yet in Brazil. If still a blank space, then I would say time to plow such virgin soil and dig out gold.
Shipping infrastructure is not good, and plus variant costs of ground transportation from state to state. Though Brazilian Post Office is the biggest provider, Mr In Hsieh said his company needs to use 12 different service providers to cover all the areas. For an item to be shipped to a rural area of Brazil, delivery service can take maximum 10-12 days to reach the destination.
According to wmccann, 30.3% of the internet users in Brazil own a smart phone, but only a small percentage of biggest online retailers have adapted their websites to m-commerce. M-commerce has not gained traction right now, because Brazilians have much lower habitual tendency of doing mobile shopping, compared with Mexico and China. Even Mr In Hsieh said currently mobile commerce has not generated substantial sales for his company. Therefore we might need to wait few more years for m-commerce truly blossoming in Brazil.