Brazilian market gains momentum with launch of the Portuguese version of eBay and aggressive investments with OLX and Good Business.
According to Nielsen data Ibope, the set of classified sites and auction, which includes services such OLX, Bom Negócio and — the most popular of them in Brazil — Mercado Livre, reached an audience of 19 million unique users in February 2014. This represents 59% of the total audience of the category of e-commerce in Brazil (the number considers only access from home or work computers and does not include mobile devices).
Proof of the potential of this market is the interest of eBay’s most trusted online classified the world, in Brazil. The company, which has the largest audience among services that allow buying and selling products on the internet, will launch a version of its website in Portuguese by mid-year. At first, the new website will make it easier to import products for sale in the United States, but the release signals plans to allow local businesses in the near future. “We ended the year with nearly 1 million buyers and we are growing. There is a huge opportunity in Brazil, “says Wendy Jones, vice president of eBay.
The high investment of online classified companies in Brazil indicate the potential of these sites to leverage electronic commerce. “The e-commerce grows, on average, between 20% and 25% per year, but only 4% of all purchases in the country are made through the internet. Still much to grow. The interesting thing is that the greater the number of competitors, but the market develops, “says Leandro Soares, director of Mercado Livre, the company with the largest audience among services that allow buying and selling products over the internet, according to consultancy comScore (see rankings).
Ranking of classified ads and auctions sites in Brazil
|Fonte: comScore (dezembro de 2013)|
The e-commerce grows rapidly in Brazil due to the large number of people entering the world of internet shopping. According to WebShoppers report, released on Wednesday by E-consultancy bit, 9.1 million people made their first purchase on the web in 2013, almost 18% of buyers registered in the year. This helped the sector reach 88.3 million requests over the past year, 32% more than in 2012. Together, the companies that sell through the Internet grossed 28.8 billion reais (over 12 billion US dollars) in 2013, 28% more than the previous year. The value should be 20% higher in 2014, reaching 34.6 billion reais (around 15 billion US dollars).
Marcos Leite, president of the Brazil OLX, websites of online classifieds has a potential comparable to traditional e-commerce. “As OLX grows, we realize that there is a very wide grip people to classified. In 2014, we will increase the number of ads registered per day up to 200%, “says Milk. The third most trusted online audience ranked in the country, according to comScore, is controlled by the South African group Naspers – Partner of Grupo Abril, which publishes SEE. The Naspers also operates.
Services online classifieds are different from most e-commerce sites, because the focus is to promote meetings between different buyers and sellers. However, there are significant differences between the various services currently offered in Brazil.
OLX Good Deal and allow you to put products on sale without paying commission to the site. Buyers find deals and deal directly with the seller. The payment is not made through the site. “By day are made more than 300,000 contacts, reflecting more than 130 million dollars in closed business,” said John Gill, marketing director of Good Business. Controlled by the Norwegian media group Schibsted and the operator Telenor, the classifieds site online was created in 2011, following the acquisition of counter, newspaper classified of Rio de Janeiro.
In the case of OLX, sellers have the option to pay 10 reais (nearly 5 US dollars) per week to improve the supply position in the search rankings. As a result, these sites still earn little or nothing to offer the service. The companies, however, say they are not concerned with return on investment for now. “There is no hurry to change our business model. We want to be the biggest online classified Brazil. Our investor is not concerned with generating revenue now, “says Leite, with OLX. In the future, however, this can change, like pioneers in this market.
The Free Market launched online classifieds in Brazil 15 years ago and now adopts two different strategies. Sellers can register for free products through the platform, but only vehicles, buildings and services. The sale of other products is permitted, but is subject to a variable fee, around 6.5% of sales. “In the marketplace model, the buyer also uses the platform of the Free Market to make the payment,” explains Smith.
Over time, however, the Free Market began to explore other business areas related to e-commerce. “The Free Market is a technology company. We offer online classifieds, e-commerce solution for companies, payment systems, advertising service, plus a logistics solution, offered in partnership with the Post Office, “says Soares. Investments in various areas yielded the company a total net revenue of 472.6 million dollars in 2013, up 26% in one year.
The strategy of online classifieds is not only made up of marketing. Companies invest heavily in mobile apps, a bet to enjoy booming sales of smartphones and tablets in Brazil . “One of our advantages is have bet too soon on mobile devices. Today, the application already represents 40% of all accesses OLX, “says Milk. The company released the first version of its app for iPhone in mid-2010. The Good Business also launched an app in August last year.
“The Free Market is an established brand and so we focus our investments in technology now. One of our priorities is to invest in mobile platforms, “says Soares. Since launching the first application for smartphones, in 2011, the company has registered more than 9.5 million downloads. Aware of the trend, eBay also launched in Brazil and other emerging countries a mobile application that allows you to navigate through the fashion industry offers. “It’s all very new, but three months after launch, already reached 130,000 downloads in Brazil,” says Wendy.
According to the E-bit, electronic commerce via smartphones and tablets develops rapidly in Brazil. In January 2013, the purchases made through mobile devices accounted for 2.5% of all online sales. In December 2013, the number already represented 4.8% of the total. “These results demonstrate the strength of the segment. There are few online retailers prepared for the peculiarities of navigation through tablets and smartphones. In 2014, this should start to change, “wrote the advice in the report.