Brazil, which represents almost half of the Latin American population, leads the way of all Latin American countries in development of the domestic business-to-consumer market.
88 per cent, or $67.6 million, of all Latin American-based online sales are made in Brazil. The country has reached a critical mass of Internet users who can support a domestic e-commerce market – an achievement that has yet to be matched by any other Latin American nation. By the end of 1999, there will be an estimated 3.8 million Internet users in Brazil.
Despite its low per capita GDP, economic crisis and major infrastructure deficiencies, e-commerce has flourished in Brazil. This success can be attributed to the following factors:
Population Size – Currently 3.8 million households have the economic power to connect to the Internet. This large customer base has prompted banks, retailers and media companies to develop attractive online offerings.
The Portuguese language – Brazil is surrounded by Spanish-speaking countries and the use of English is more limited. This has led it to develop quality content in its native Portuguese tongue. In particular, Brazil’s highly concentrated media sector has provided rich Portuguese content in all mediums. These media companies are attempting to build strong online identities and are using their information resources to provide online content.
The Major Banks – In 1999, an estimated 1.5 million Brazilians will access their accounts via PC or the Internet. This comfort with using electronic media for financial transactions will ease the adoption of electronic commerce. The banks are facilitating the development of e-commerce by creating «safe» shopping malls, featuring certified merchants and electronic wallets.
Large Retailers/Strong Brands – More developed and entrepreneurial than the rest of Latin America, Brazil’s retail market has large department stores, supermarket chains and strong category specialists. This brand strength and good customer support has stimulated online demand for products and services.
Early Emergence of a Strong Domestic Portal – Universo Online is a daunting competitor for the many global and regional portals attempting to establish a presence in Latin America. UOL has more than 3 million Latin American visitors, 500 million page views per month and access to media content from its owners. UOL is also launching its own UOL shopping channel.
Internet Service Providers – Hundreds of Internet Service Providers (ISPs) are competing for Brazil’s Internet users while only a few currently dominate. Competition has led to the creation of satellite server networks, which allow users to access the Internet with a local phone call. Price competition has driven monthly access charges down to the region’s lowest market price of 35 reais (US$21) per month.
Brazil has one of the most sophisticated and developed home banking channels in the world – the biggest factor in the development of e-commerce in that region. More than 1.5 million consumers in Brazil access their banks via PCs, either through direct dial-up or via the Internet. Brazilian consumers can check their account balances, make transfers between their accounts, or gain access to more sophisticated products and services, such as online loans, mortgages and investments.
This authority in the banking sector, and its role in establishing Secure Electronic Transaction (SET) pilot programs, makes it the Latin American leader in the development of integrated, secure payment platforms. Bradesco has developed a separate payment system that allows customers to download an electronic wallet from the bank’s site to be used with any pre-authorized merchant. Bradesco is also one of three Brazilian banks participating in Visa’s online mall where customers can choose merchandise from certified retailers and click on the «pay by SET» option, which functions like an online cash register.
Telecommunications investments in upgrading the current network and supporting increased traffic in local loops will improve the online experience for Latin American consumers. In Brazil, local telecommunications companies are building Internet Protocol (IP) networks for Internet traffic in highly populated regions while new technology offerings such as cable modem and DSL are becoming more widely available.
