At this point, it’s no secret that Brazil is emerging as a global economic player, expected to have the sixth-largest economy in the world by 2030. This is also reflected in the digital business world: Brazil’s e-commerce market is the largest in Latin America with a 28.5% market share and 37m shoppers each quarter. In this article, we’ll explore both the opportunities and challenges that e-commerce businesses can expect when expanding to Brazil.

Facts and Figures

With a population of nearly 212 million people in 2024, Brazil has the seventh-largest population in the world. The country itself is large too: with an area of 8,515,770 km², it takes up almost half of South America. To put that in perspective, Brazil is nearly twice the size of all EU member states combined. As a result, its population density is relatively low at 24.92 inhabitants per km², similar to Sweden.

Internet & E-Commerce

A few years ago, Brazil’s internet penetration rate was still relatively low, at 70.7%. However, there have been significant increases, and by 2023 83.5% of Brazilians had internet access. In 2023, e-commerce in Brazil generated nearly 186 billion Brazilian reals in revenue, or about US$33.4 billion. This was a 9.5% increase from 2022, which shows that the market is still demonstrating strong growth.

One interesting detail is that 68% of Brazilian online shoppers also buy from foreign companies. The top spots are shared by the US and China, each with around 30%. European companies have a unique opportunity to stand out here with products that aren’t available in the same quality in Brazil.

Mobile commerce accounts for over half of online sales, and the share of sales is expected to increase in the coming years. The largest customer segment is between the ages of 35-44, accounting for 34% of purchases. The age groups 25-34 and 45-54 account for just over 22% each.

Currently, Brazil’s e-commerce market is dominated by domestic platforms, including Americanas.com (now merged with Americanas S.A.), Magazine Luiza (also known as Magalu), and OLX. The only significant foreign player is the Brazilian branch of the Latin American e-commerce giant Mercado Libre, known in Brazil as Mercado Livre. While Amazon has only been active in Brazil since 2017, it surged in popularity to become the second-largest e-commerce platform by user visits in 2023. Amazon and Mercado Livre can be important partners for foreign companies looking to bring their products to Brazilian consumers.

Localization

Brazil’s official language is Portuguese although, in a few communities, it is complemented by indigenous languages. However, it’s important to note that Brazilian Portuguese differs from the European variant, much like British and American English. While a 1990 agreement standardized spelling, there are still significant differences in pronunciation and some grammatical rules. If you want to win over Brazilian customers, we recommend offering your platform in Brazilian Portuguese.

The Brazilian currency is the real (abbreviated as BRL or R$), which is divided into 100 centavos. In the plural form, it’s referred to as reais.

When localizing your website, bear in mind that Brazilian clothing sizes do not align with European or US sizes and should be adjusted accordingly. On the plus side, Brazil, like Europe, uses the metric system.

Another notable point is the importance of special events for e-commerce: Christmas is, of course, a major holiday, and Black Friday and Cyber Monday are also major shopping dates, much like in the US. These three end-of-year events alone make up about a quarter of annual e-commerce revenue.

European companies can generally benefit from a positive reputation in Brazil and across Latin America. However, if you market your products based on European quality, they must meet these high expectations.

Payment Methods and Shipping

E-commerce payments in Brazil are frequently made using credit or debit cards. However, it’s important to note that many Brazilian cards cannot be used for international payments unless activated by the bank. The account-to-account (A2A) payment service Pix has rapidly gained popularity and was the second most popular e-commerce payment method in 2023. Digital wallets and cash payment vouchers called  “Boleto Bancário,” are also popular.

Nearly half of all e-commerce payments in Brazil are made in installments, which is especially common for higher-priced items.

After import restrictions, shipping is perhaps the biggest challenge in Brazil’s e-commerce market. The country is vast by European standards, and its infrastructure is often lacking. Road transport is the most important mode of delivery but, outside of the southeast, the highway network is sparse. Outside major cities in the southeast and east, delivery times of over a week are common. That said, nearly two-thirds of e-commerce orders are shipped to four states in the southeast, including São Paulo and Rio de Janeiro. In these large cities, traffic congestion often causes delivery delays.

Most packages are shipped through the Brazilian postal service, “Correios.” However, satisfaction with the service is low: nearly a quarter of e-commerce sellers rate Correios as poor, and only a third rate it as good or excellent. Common complaints include delays, lack of tracking options, and instances of fraud.

Customs & Importing

Finally, it’s important to mention that Brazil’s import restrictions pose a significant challenge for foreign companies. Although tax regulations were reformed in 2023 to lower the burden on lower-priced items, most imports still face relatively high tariffs.

Under the new regulations, all online purchases arriving in Brazil are subject to a 17% ICMS (Tax on Circulation of Goods and Services). Purchases valued at US$50 or less are exempt from additional import taxes. However, all purchases valued between US$50 and US$3,000 are subject to a 60% import tax in addition to the 17% ICMS. These costs are passed on to the customer, which, along with potentially long customs clearance times, can negatively impact customer satisfaction and lead to complaints. While cross-border purchases from China are quite popular with Brazilians, the extremely low prices offered by Chinese e-commerce giants likely make up for this inconvenience.

However, Brazil and the other Mercosur nations reached a political agreement with the EU on a free trade agreement in 2019. This agreement has not been finalized or implemented, but when it is, it will significantly lower the barrier to trade between the EU and Brazil / Latin America.

It is also worth noting that Brazil has a significant number of bureaucratic hurdles for importing and marketing goods. These formalities can also be time-consuming. Therefore, partnering with local companies can offer significant advantages: bureaucratic requirements can be bypassed or simplified, and deliveries can be better managed to reduce the costs and risks associated with importing.

Conclusion

Entering the Brazilian market presents a variety of challenges. Shipping directly from Europe is a suboptimal solution due to import restrictions and long delivery times. The best way to serve the country is likely to establish a local presence with on-site warehousing and shipping, or by partnering with Amazon or Mercado Livre. Brazil is not a market that can be conquered “on the side,” but it undoubtedly holds great potential.



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autor_eurotext_100Author: Eurotext Editorial Team

We explain how internationalization works, provide tips for your translation projects and outline some of the technology and processes used. We also report on current e-commerce developments and cover a range of language-related topics.