E-commerce and Internet industry in Brazil

A country of a dream, a country of endless holidays and carnivals, a country of the tastiest coffee, exotic fruits and wonderful nature, a country of beautiful bright women! Do you know which country we’re talking about? Sure! That is Brazil that impresses everyone who has had a luck to come to this amazing place in South America. Well, we can endlessly talk about Brazil amenities and admire it…that’s nice, but today we’re going to talk about the level of its Internet and e-commerce development.

As for the Internet market, Brazil claims to be a leader in the Internet technologies on the market of Latin America. It is one of the most promising countries for Internet development. Brazilian market for goods and services is the largest in South America and it is also the most important advertising market in the region.

Concerning the Internet penetration, it occupies the third place, just behind Uruguay and Chile and a little ahead of Argentina. Since 2002, Brazil has experienced a growing migration from dial-up to broadband. While virtually all cable TV companies offer cable modem services, ADSL is the access technology of choice, accounting for 84% of the country’s broadband market. Convergence strategies are gaining popularity in Brazil. With the widespread development of Voice over Internet Protocol (VoIP), more and more companies are looking to incorporate Internet telephony with their broadband offerings. In October 2004, TV Cidade and TVA were the first Brazilian operators to adopt the triple play strategy, combining VoIP, broadband and pay TV services.

Well, but what about the amount of Internet users in the country? According to the statistics presented by internetworldstats.com, since 2000 the number of users has increased significantly: from 5,000,000 to 67,510,000 in 2008 (a growth of 2,9% to 35,2% of the population). Actually just during the last three years, the number of citizens that use Internet doubled: if in 2006 it was 32,130,000, in 2008 it was 67,510,400 as we’ve already said. So the progress is obvious. Concerning the average time a typical user spends on the Web, it jumped up from 16 hours and 54 minutes in 2005 to 23 hours and 48 minutes in June. To help the development of the computer industry the government promises to provide numerous incentives to the sector. Before contracting suppliers, all federal departments must now use the list on the federal electronic-procurement portal Comprasnet (www.comprasnet.gov.br).

Most of the Brazilian Internet sites are being registered in the zone of the .br or .com.br domain. In case you’d like to register in such a domain zone, it’ll cost you not too much actually – just $ 495.00 for a two year contract.

Well let’s talk about e-commerce in Brazil particularly. It’s important to say that just for the last couple of years on-line sales doubled (as Getulio Vargas Foundation, FGV, research revealed). First, we’re going to introduce you The Brazilian Chamber of e-Commerce - Camara-e.net. That is the sector’s intelligence and the main forum of digital businesses in Brazil. It was founded on May 7th, 2001 and today it is the main multi-sector association of the Brazilian and Latin American Digital Economy, which strongly emphasizes Information Technology as a strategic factor for economic development in the knowledge era. Camara-e.net’s aim is to promote position, represent and defend the collective interests of companies, entities and associate users involved in commerce activities, relations and businesses by electronic means. Its main target is to encourage e-commerce in Brazil as a means of development and modernization of economic relations, focused on the increase of productivity and competitiveness in all business levels.

Camara-e.net has over 160 members, including 80% of on-line retail, international telecommunication giants, global hardware leaders, major software and technology companies, most important Internet portals, traditional law firms and consulting companies, leading companies of all economic sectors. It claims to have a catalyzing role, engaging members and other associations in a continuous search for consensus regarding the most important regulatory and political issues. And its role is increasing as the government modernizes and rationalizes its activities, bringing, as a consequence, in general, the cut back in governmental structures and a significant transference of technical and economic responsibilities from the public to the private sector.

According to Camara-e.net, the share of electronic business-to-business (B2B) in Brazil e-commerce raised from 9% of the total in 2004 to 19.6% in 2006. As for business-to-consumer (B2C) sales, it increased from 2.9% of the total e-sales in 2004 to 7.45% in 2006. The value of B2B transactions amounted to R267.6bn in 2005, a 37% increase in local-currency terms of the 2004 total. Some 79.3% of the total B2B for 2005 was transacted through proprietary portals of companies dealing directly with suppliers, distributors and other partners. The remaining 20.7% of the deals occurred via independent electronic marketplaces.

The most active users of e-commerce resources are the oil and petrochemicals industries, leaving the automotive industry behind. The consumer goods, healthcare and pharmaceuticals, and information technology industries exhibited the strongest growth in use of e-business services. 

Regarding to the year 2008, the Spanish-language report, released by e-bit, found Brazilian e-commerce incomes to have quadrupled during the period of the three years, and in the year 2008 reached the amount of $2.2 billion. That's not surprising actually, as the number of online shoppers in Brazil has also jumped up in 2008 to 9.5 million from 2.6 million in 2003.

So you can see that Internet technologies as well as e-commerce in Brazil are in the process of the constant development and improvement. This country strives obviously to achieve the leading position in the world in e-commerce sphere. Well, probably in couple of years Brazil will be associated not only with coffee, carnivals, holidays and so on, but also with the most sophisticated e-technologies. Why not?