Ecommerce USA and Brazil – Similarities, Differences and Partnerships
After attending the recent 2011 Ecommerce Brasil event in beautiful and expansive Sao Paulo, I nearly immediately attended the leading ecommerce event in the USA, Shop.org’s Annual Summit. In both cases, I could feel the pulse of innovation. These were my people… the bold and fearless. Those that swim out into the ocean looking for the big waves and riding them.
I was struck by the number of similarities between each country’s approach and phase of development of ecommerce.
1) Bold Leaders: Each country has its leading titans of ecommerce. In the US it is Amazon and Walmart.com, in Brasil it is Submarino.com and Americanas.com. These titans are innovators and help drive the entire community. However, they also force the other players to identify their unique differentiator. Those that don’t, fail.
2) Rich Talent: Both have robust ecommerce communities. I saw first hand the diverse and large talent pool in Brasil ranging from software, hosting, fulfillment and shipping providers to the growing army of marketing channels and digital agencies. The difficulty for retailers is the same as well: How to select the right solutions given your customer base, your products and your company’s stage of development.
3) Complex Marketing Channels: In both countries, ecommerce pure-plays and multi-channel retailers are striving to maximize sales from marketing channels like Google, price comparison sites, affiliate marketing and Facebook. USA has Shopping.com and Brazil has Buscapel. There is a constant need for retailers to understand the true ROI of their channels and to negotiate these deals wisely.
4) The same is true of the rise of daily deal sites like Groupon and the explosion of Flash Deal sites like Gilt Group (US) and Brands Club is also very similar. While some of these trends originate in the US, they are quickly launched by local entrepreneurs, often with far better success than the US extension.
5) Luxury Ecommerce: I was impressed by the sophistication of the Luxury brands in Brasil. The digital branding and breakthrough thinking present in the Daslu and Farm brands was eye-opening. These companies have the same approach and excellence as their counterparts in the USA. They deeply understand and embrace the branding impact of digital.
6) CRM and Analytics: In some ways, Brasilian companies are providing leading edge technologies (e.g. Behavioural Targeting). In others, the hyper-focus on consumer data is more advanced in the US. For example, the sheer number of personalization engines available in the US is astounding. Both countries seem to have more focus on clickstream than true CRM and Loyalty. There are standouts like the Amazon Prime program and the Marisa loyalty program but both countries have gaps here.
In a nutshell, the topics are the same and often the vendors/platforms are as well.But there are differences that make the challenges different for marketers, merchants and technologists in either country. Here are a few of the differences:
1) Growth: Brazil is growing FAST. Ecommerce is growing at a pace of 40% and above. In contrast, US ecommerce is growing at around 10%. The “C” class (middle class) of Brasil is growing fast as millions move from poorest classes into the consumer class. At the same time, the US middle class is shrinking with a troubling loss of spending power and many families declining into poverty. This is a very different model to manage for ecommerce retailers in each country. Brasil will continue to grow fast as access to the internet increases every year and access to broadband as well.
2) Mobile Commerce: In comparing the key topics in both countries, mobile phone technology and m-commerce is clearly a major topic right now. Companies are spending and deploying m-ready sites and apps at a great pace. While the number of mobile phones per person is higher in Brasil than in the US, the presence of smartphones is far higher in the US. This is a cost and taxation issue. This may mean that the way to win in Mobile is far more “lightweight” in Brasil versus “rich media” in the US.
3) Culture of Social: Brasilians are more hyper-connected and social than in the US. Some experts in Brazil believe that Orkut (Google’s early social platform) has maintained such a large presence here because it was so quickly and fully adopted… faster and more intensely than in the US. It will be interesting to observe the rise of Facebook in Brasil. My expectation: More frequency and intensity of use will continue in Brasil offering more room for Social Commerce and Social Lead Generation.
4) Shipping: US retailers are blessed with a very sophisticated and highly-competitive set of shipping providers including Fed Ex and UPS that comprehensively ship throughout the US. OK there are a few mountain tops that they don’t ship but suffice it to say that US ret
ailers can count on the shipping strength and focus on demand generation. This is not the case in Brasil where the number of providers is limited overall. With Correos, the ability to ship across the breadth of this large country is improving but competitors only exist in highly populated areas.
5) Entrepreneurial Engine: This is probably not a new statement but it is clear that the US has a decades old venture capital engine that drives the launch of waves of ecommerce innovation. This is growing in Brasil today but some friends explained to me that the bulk of investment is still from other countries. I believe and hope that this will change.
6) Fraud: While fraud is an issue in all countries, Brasil has more challenges with this issue in the near term. This is a step in the overall development of ecommerce in any system. It is still an issue in the US but tools and practices have driven the impact down to a manageable “tax” on the business. Time and innovation will continue to wear down the impact of fraud on ecommerce in Brasil.
Overall I must stay that I was blown away by the level of advanced ecommerce present in Brasil. I believe we have opportunities to partner together to win in our common practice.
The last few months have left me wondering: How can we work together to bring leading innovators from Brasil to the US and vice versa? How can we connect our entrepreneurial engines to fund and fuel that innovation? It starts by getting on Skype or getting on a plane. I encourage my colleagues in the US and in Brasil to visit each other’s ecommerce events and build bonds across these incredible communities. I believe that we are the leaders of commerce… all commerce will be changed by ecommerce. We are the wave makers and the wave surfers. I’ll see you out on the ocean.
Image Credit: Hussein Abdallah