Ecommerce fuels retail opportunities in Brazil
The retail industry is driving economic development in Brazil, and merchants are now focusing on ecommerce opportunities in the South American nation. According to eMarketer, online sales in Brazil are expected to grow by 11.7 percent in 2014, amounting to $13.37 billion. Brazil's ecommerce market is the 10th largest in the world, the source added, fueled by 107.7 million Internet users.
Retail industry booming in Brazil
Consequently, online commerce in Brazil presents great opportunities for retailers and investors. Tiger Global Management, an investment firm located in New York, recently announced that it will invest around $520 million in B2W Companhia Digital, an online retailer in Brazil, The New York Times reported. The firm has invested in other Brazilian ecommerce companies, the source added, noting that the move indicates a renewed interest in online retail marketing opportunities in the country.
It's not just the ecommerce market that's gaining additional attention in Brazil. Apple just opened its first physical store location in the nation, Bloomberg reported. Not only does Apple want to increase its presence in one of the largest smartphone markets in the world, it will also help to fuel ecommerce by providing the population with high-quality devices.
Innovative uses of retail technology
Although Brazil's economy shows strong growth, the market still presents a number of challenges, especially for international merchants. CNBC mentioned that store managers need to make sure their retail management software incorporates local norms, such as a preference for installment payments instead of credit and debit card transactions.
"It's ingrained in our culture, especially among the new middle classes," Ricardo Rocha, a professor of finance at São Paulo's Insper business school, told the news source, referring to payment preferences. "It represents a huge challenge for foreign retailers."
However, retail technology provides opportunities for merchants to adapt to diverse market conditions, even communities that are typically a challenge for marketers. For example, Fast Company described a Brazilian retailer that uses ecommerce technology to make retail operations possible in slums. Magazine Luiza, a home furniture retailer, developed a system whereby customers can try out products in stores and then place their orders online. Instead of keeping inventory stocked in each store location, the source explained, the retailer simply provides a showroom to keep costs minimal. This enabled it to expand into low-income areas last year. The company makes use of social media, launching a campaign on Facebook to encourage people to open their own store locations and earn commissions by selling products.
