Published on February 25, 2014
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Como o eCommerce no Brasil pode aprender com os BRICs Zia Daniell Wigder, Vice President & Research Director 14 February 2014
It’s extremely hard to keep up with what’s happening around the globe
Agenda › What are some key eCommerce trends in the other BRIC markets › What are some of the eCommerce trends that extend globally › What is unique about the Brazilian eCommerce market © 2013 Forrester Research, Inc. Reproduction Prohibited 6
eCommerce market sizes vary greatly *Forrester does not have a forecast for Russia – estimates are from Data Insight, East-West Digital News, PwC
Focus on China
Some eCommerce trends in China This year, the Chinese market will hit $373B (B2C & C2C) compared to the US at $291B (B2C only) and will continue to grow at over 20% a year. Shoppers buy across all categories online Unprecedented size and growth rates Alibaba alone is investing $16B in a logistics network – Jingdong has invested almost $4B. Jingdong offers 3-hour delivery in 6 cities Massive logistics investment Given the challenges of operating in China, numerous providers such as Baozun and Yoox offer streamlined solutions for brands looking to enter the market Market concentration is greater than in any other major eCommerce market. Tmall is said to have 40-50% of the B2C market, Taobao 80-90% of the C2C market Market dominance by a single player Numerous players streamlining market entry
Focus on India
Some eCommerce trends in India India’s eCommerce market is dominated by local players in part due to the fact that foreign multibrand retailers cannot sell online in India – although that may change Online retailers are receiving hundreds of millions of dollars of investment: Flipkart: $360m (in 2013) Snapdeal: Raising $100m Myntra: $50m Foreign direct investment (FDI) restrictions Small market, massive funding All leading players now offer marketplaces: Flipkart, Snapdeal, Myntra, Amazon, eBay. The shift to marketplaces has brought customer satisfaction challenges Most traditional retailers are barely eCommerce enabled (if at all); Some such as Healthkart and Firstcry are online retailers going offline Traditional retailers slow to embrace eCommerce; some online retailers going offline Marketplaces dominate
Focus on Russia
Some eCommerce trends in Russia In Russia, leading online retailers like Ozon.ru offer almost 20 payment methods, including COD – there are also different pick-up options such as QiwiPost terminals Unlike in China, where a single player dominates the market, Russia is the opposite: A.T. Kearney says no player holds more than 4% market share* Wide variety of payment and pickup options Fragmented online retail environment Significant crossborder eCommerce – but with new hurdles for foreign sellers In 2012, eBay sellers sold over $400 million of goods in Russia and 40% of small packages entering Russia were said to come from Chinese eCommerce companies. However, new package delivery restrictions means FedEx and DHL have suspended shipments to consumers Leading apparel retailers like Lamoda, Ozon.ru and Wildberries are all said to offer a delivery service where the courier waits 15 minutes while you try on clothing and provides fashion advice Fashion advice via delivery person Source: Press release, “Russia Placed 13th in the Russia Retail eCommerce Index for Market Opportunity”, 18 November 2013.
Takeaways for Brazilian online retailers from the BRICs › In markets like China, numerous solution providers are streamlining market entry to a challenging market. There is still a dearth of similar options in Brazil – what role can your company play? › A shift to marketplaces is a big revenue generator for online retailers, but can take a serious toll on customer satisfaction. Be prepared. › Russian online retailers have thought creatively about providing services that drive sales of key categories. How can online retailers in Brazil differentiate their offerings through service? © 2013 Forrester Research, Inc. Reproduction Prohibited 14
If those are some of the unique things about the other BRIC markets, what trends are happening globally? © 2013 Forrester Research, Inc. Reproduction Prohibited 15
#1. Profitability is elusive - everywhere © 2013 Forrester Research, Inc. Reproduction Prohibited 16
#2: eCommerce growth starts in big cities, but rapidly migrates to Tier 2-3 cities and towns
#3: Mobile is primary driver of new user and buyer growth Sources: Tech In Asia, 17 July 2013, IMRG Press Release, 24 September 2013
#4. New eCommerce markets follow a similar path Source: June 2013 “The Evolution Of Global eCommerce Markets”
Understand which phase countries are in June 2013 “The Evolution Of Global eCommerce Markets”
Takeaways for Brazilian online retailers from these global trends › If your brand is just entering the Brazilian market, don’t expect payback in 1-2 years. As in all emerging eCommerce markets, profitability is a challenge. › Prepare for growth to come from smaller cities where offline product selection is limited, and think about how you will target consumers in these areas. › Ensure your business is positioned to take advantage of mobile, and realize mobile offerings are a work in progress rather than a one-time initiative. › Understand where your products fall on the eCommerce adoption curve, and what you’ll need to do to drive adoption of your product categories. © 2013 Forrester Research, Inc. Reproduction Prohibited 21
What is different in Brazil?
#1. Cash on delivery never took off as an online payment method – unlike in almost every other emerging market
#2. Online retailers do not own and operate delivery networks to the same degree as they do elsewhere Source: Tech in Asia, Bloomberg
#3. The nature of brand engagement through social media is exceptional in Latin America I think it is cool to be associated with a company/brand on social media Strongly agree Agree Brazil China US UK = >20% = 10-20% = <10% Source: Latin American Technographics Online Benchmark Survey, 2013, Asia Pacific Technographics Online Benchmark Survey, Q2 2013, North American Technographics Online Benchmark Survey Q2 2013 (US Canada), European Technographics® Online Benchmark Survey, 2013
#4. The involvement of traditional retailers in Brazil looks more like the US than Asia Top 10 online retailers by principal market as ranked by Internet Retailer China India US Brazil = Web-only = TV or catalog = Traditional retailer* * Includes any online retailer with a traditional retail store counterpart
Takeaways for Brazilian online retailers from these local trends › You won’t have to deal with the headaches of managing cash on delivery, but you’ll need to come up with other ways to drive trust among online buyers. › Online retailers that do not (and do not plan to) own their own delivery networks will need to work closely with logistics partners to create competitive offerings. › Social networks present a different opportunity for brands operating in Brazil as compared to in the US and Europe – understand the differences and adapt. › Omnichannel initiatives, while nascent in Brazil today, will soon change consumer expectations of the overall shopping experience. © 2013 Forrester Research, Inc. Reproduction Prohibited 27
Thank you / Obrigada Thank you Zia Daniell Wigder email@example.com @zdwigder
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