Although this population is more connected to the Internet than ever, Brazil has a high unbanked population rate. Access to financial services and products are only available to a few and that goes for access to credit and international credit cards.
Yet, with all these challenges, the country still comes out as one of the fastest-growing when it comes to the digital market.
According to research conducted in, Beyond Borders: The Cross-Border Consumption in Brazil, the nation has experienced a stable growth curve of its Gross Domestic Product (GDP). It is expected that Brazil will register an average growth of 17% in e-commerce alone in the next three years.
The driving force behind the growth is the expanding internet connectivity among Brazil’s population.
Brazil is known for being the fifth largest Internet economy in the world. It is estimated to have 236 million mobile subscriptions across 143 million unique mobile subscribers. However, despite these massive numbers, Brazil has not reached maturity. As a result, there’s plenty of room to expand.
There is no doubt that Brazil is a connected country. As stated by The Regional Center for Studies on the Development of the Information Society (CETIC), 70% of the population are connected. This is equivalent to 147 million Brazilians in 2018.
The connected part of the country embraces the newest tech products and actively follows trends in the technology industry.
Populations with less purchasing power are catching up as they too have gained access to the Internet in recent years. This population relies heavily on their smartphones to connect themselves.
Brazilians that are not yet considered avid consumers, because of their financial limitations, are forecasted to become part of the market and will be the drivers of e-commerce growth in the country.
The principal growth of e-commerce in Brazil is being ushered in by inclusion through internet connectivity, primarily via mobile.
In Brazil, “bankarization” determine patterns of consumption. According to the Global Findex survey, the percent of adult Brazilians that have a bank account reached 70% in 2017. In relation to that, 86% of all cross-border customers surveyed have a bank account.
Of those who own a bank account, eight out of ten own a debit card, 71% have a credit card, and 70% use mobile banking apps.
Of those consumers who don’t hold a banking account but make purchases on international websites, 63.7% have a monthly family income of up to $500 USD. Of those consumers that do have a bank account, only 28.5% belong to low-income families.
It was also found that 69.1% of consumers surveyed used a credit card to buy from an international website in the last 12 months. On the other hand, 51.5% used boleto bancario. These payments were the most used among those surveyed regarding their international retail website purchases.
Another common purchasing behavior among Brazilians is using payments by installment. This is dictated by the price of the item, such as high-ticket purchases. This is not merely due to a cultural habit, but also to address the individual’s economic condition as well as a restricted cash flow.
The research shows Brazil is a dichotomy. The population is divided by whether they are connected to the Internet and whether they have access to a bank account. Both of these scenarios greatly influence their purchasing power in the cross-border e-com market. The key is to develop strategies that address the needs and spending habits of the Brazilian consumer.