[Going Global Compass] The shining pearl on the Latin American Crown – Brazil

Going Global Compass Brazil - shining pearl of Latin America

★ The Compass of Going Global

In recent years, going global has become a super hot topic. Facing the boundless opportunities of overseas markets, Chinese cross-border brands are also holding anxieties. How can going global brands occupy a place in overseas markets facing different cultures, economic situations, and consumption habits around the world? In response to this, Nox Star has launched a series of going global market insight programs, “The Compass of Going Global”, with each issue providing insights into the market overview, major tracks, and tips for going global in major countries around the world, guiding brands to set sail and break waves.

The First Stop of the Compass of Going Global

Brazil

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Brazil, officially known as the Federative Republic of Brazil, is the largest country in Latin America, occupying about half of South America. As the largest market in Latin America, Brazil has attracted countless brands with its huge consumer groups, diverse social culture, and booming economy.

This issue of the Compass of Going Global takes you to the first stop, Brazil, which is known as the “pearl on the crown of Latin America”. Let’s take a closer look at its charm.

01. Overview of the Brazilian Market

On April 12th, Brazilian President Lula’s visit to China received widespread attention at home and abroad. Brazil, the “Kingdom of Football,” surpassed the UK in 2011 to become the world’s sixth-largest economy, and together with Russia, India, China, and South Africa, is known as the “BRICS” countries, and it is the first country in the world to establish a strategic partnership with China.

Brazil is the fifth largest country in the world by area and the sixth largest by population. It is the largest economy in Latin America and the southern hemisphere, and also the third largest economy in the Americas. In 2022, the per capita GDP of Brazil is about $8,875, a year-on-year increase of 2.2%. In terms of economy, Brazil has vast agricultural and mineral resources, and is a major producer and exporter of various agricultural products. Its industrial base, such as petrochemicals, mining, and automobiles, is strong, and the tertiary industry accounts for nearly 60% of the country’s GDP. The financial industry is well-developed as well.

In terms of population, Brazil can be said to be a country with extremely strong inclusiveness. The total population of Brazil is 215 million, mainly composed of European, Middle Eastern, and Asian immigrants, with white people accounting for nearly half of the population. About half of the population is concentrated in Rio de Janeiro and Sao Paulo, while the population density in the inland is relatively low. The official language is Portuguese, and the universality of English is not high.

The large fusion of races, religions, and cultures has made Brazilians more accepting of new things, and diversity and inclusiveness has become one of the main labels of Brazilians.

02. Overview of Mobile Internet in Brazil

When it comes to the characteristics of mobile internet in Brazil, three points are particularly prominent: many users, long usage time, and high coverage of social applications.

Football, samba, carnival – as a world-renowned city that never sleeps, Brazil has 97% mobile network coverage, with Brazilian internet users accounting for 37% of the Latin American market. It can be said that everyone in Brazil has a “phone attached to their body”.

According to data from data.ai, Brazilian users spend an average of 5.4 hours per day on mobile devices, which means that except for sleeping, Brazilian users spend nearly one-third of their time immersed in the world of the internet.

Moreover, the Brazilian people are one of the most enthusiastic users of social media in the world. Data shows that by 2022, Brazil will have approximately 171 million active social media users, accounting for about 79.9% of the total population.

According to OOSGA data, WhatsApp is the most commonly used social media platform among Brazilian users in 2022, followed by Instagram, Facebook, TikTok, etc. Especially, WhatsApp’s coverage rate is as high as 93%.

Second only to WhatsApp, Instagram in Brazil has 123 million users, of which males account for 42.39% and females account for 57.61%. The main age group is 18-44 years old. In recent years, the explosive growth of TikTok around the world has also been remarkable in Brazil. According to OOSGA’s January 2023 statistics, TikTok has 74 million users in Brazil in 2023, far more than Japan and the UK.

03. Overview of Popular Markets in Brazil

Thanks to Brazil’s good mobile internet infrastructure, it provides a fertile soil for the development of e-commerce, gaming, social entertainment applications, and other markets.

・E-commerce

According to research by CouponValido, Brazil’s e-commerce sales growth rate was the highest in the world in 2022, reaching 20.7%, about twice the world average (11.35%), far higher than Japan, the US, and other developed countries.

The article released by Nox titled “Brazil, the number one internet celebrity country in Latin America, why it can become the next ‘blue ocean’ in cross-border e-commerce like China!” pointed out that in the first quarter of 2022 alone, the number of online shoppers in Brazil reached 24 million, and the e-commerce sales increased by 12.6% year-on-year, reaching 39.6 billion reais (approximately 7.46 billion U.S. dollars). This shows the great potential for the development of Brazil’s cross-border e-commerce market.

In addition to the extremely high smartphone usage rate, one of the driving forces behind the rapid development of Brazil’s cross-border e-commerce is the transformation of payment methods. More and more Brazilians are reducing the frequency of cash payments, and digital payments are becoming increasingly popular.

According to the report “Overview of Brazil’s Retail and E-commerce Market” released by OOSGA, the average annual e-commerce consumption per capita in Brazil is approximately US$349, and 3C, fashion, and personal care have become the top three categories in e-commerce sales in Brazil.

In addition, since the outbreak of the pandemic, the purchasing habits of Brazilian consumers have also undergone certain changes, with cost-effectiveness becoming the focus of more and more Brazilian consumers. Some data shows that 19% of consumers are accustomed to comparing prices before placing an order. In order to reduce expenses, free shipping and discounts have become the top two factors affecting online consumption among Brazilian consumers.

The purchasing behavior of Brazilian consumers is greatly influenced by social media comments, so internet celebrity marketing has become an important means of e-commerce marketing. The latest data from Statista shows that in Brazil, internet celebrities play an important role in promoting consumers to buy products through social media platforms such as Facebook and Instagram, and more than 60% of consumers have made purchases through these platforms based on internet celebrity recommendations.

For the potential Brazilian e-commerce market, Chinese brands have also entered the market one after another. Alibaba’s AliExpress has set Brazil as its second largest market and increased its investment in the Brazilian market. SHEIN also recently announced an investment of 7.5 billion Brazilian real (approximately US$148.9 million) to deepen its presence in the Latin American market.

According to data from data.ai in the past month, SHEIN and Shopee occupy the top two spots in the shopping app download rankings in Brazil, with Alibaba’s AliExpress ranking sixth, second only to Amazon.

・Gaming

Focusing on the Brazilian gaming market, according to a report by Newzoo, 80% of Brazilian users have gaming habits, and more than 70% are young people under the age of 35. In addition, Brazil’s high import tariffs have made PCs and game consoles “luxury goods,” but they have also laid a good foundation for Brazil’s mobile gaming market. Although the proportion of long-term paying players in Brazil is not large, according to Statista data, 55% of Brazilian players have paid for games or often pay for games.

Although Brazil’s mobile gaming revenue cannot match that of T1 markets, it still ranks among the top in emerging markets led by Southeast Asia. Among the top 30 overseas mobile game download markets in SensorTower in September 2022, Brazil’s appearance rate is as high as 93%, which is the market with the best fan effect for overseas applications.

In addition, according to data from data.ai, the popular game categories for download volume in Brazil are mainly hyper-casual, simulation, and action games, and the total download volume of hyper-casual categories in 2022 reached 1.3 billion, an increase of 1.2% year-on-year. Android devices are the main mobile devices used by Brazilian users, with a market share of up to 22%, and all mobile phone manufacturers should pay attention to Android compatibility.

An industry insider analyzed: “The Brazilian gaming market is currently in a fierce battle zone, growing rapidly, but there are no leading manufacturers concentrating on the market“. This shows that the Brazilian gaming market still has great potential.

・Social entertainment applications

Turning our attention to Brazilian social entertainment applications, social, photography, and video applications still occupy the longest time of Brazilian netizens. The passionate nature of Brazilians towards social media cannot be ignored.

Currently, in terms of Brazilian audio and video, in addition to traditional YouTube and Netflex, TikTok, Resso, and Kwai from China are also deeply loved by Brazilians.

04. Tips for entering the Brazilian market

・Localization

The reason why there is still room for growth in various fields in the Brazilian market is because the cultural and habitual differences are too great compared to domestic markets, which often makes it difficult for foreign sellers to succeed. Therefore, doing localization can be said to be one of the keys to entering the Brazilian market.

For example, the official language of Brazil is Portuguese, and the main religion in Brazil is Catholicism. In Brazil, butterflies are a symbol of good luck, the “OK” hand gesture is a taboo, and the color brown is considered unlucky, and purple mostly represents mourning and so on.

In addition, unlike in Southeast Asia, Brazilian internet users are deeply influenced by American culture, and their concepts and preferences are very similar to those of American users, with Brazilian popular trends keeping in line with American trends. Some even say: “If a brand can win in the US, it can definitely win in Brazil as well“.

・Payment Methods

Many international popular payment methods are not commonly used in Brazil. For example, Brazilian users are not interested in using international credit cards; the local credit cards have the highest usage rate. In addition, Brazilians have the habit of paying in installments for shopping, which is mostly provided by local credit cards.

In addition, Brazil also has the BOLETO payment method, which is an online ordering and offline payment method. However, the repayment time is longer, and the seller needs to have certain financial processing capabilities.

Therefore, how to successfully connect to local payment methods in Brazil is also one of the keys to successful expansion into the Brazilian market.

・Influencer Marketing

According to a survey by OOSGA, the main motivation for Brazilian users to use social media besides connecting with friends and family is shopping and product research, which is also among the top priorities. Therefore, social media marketing is essential to enter the Brazilian market.

Thanks to Brazilians’ love for social media, Brazil is also known as the “number one influencer country” in Latin America. Whether in terms of the number or influence of influencers, Brazilian influencers are among the top. According to the survey conducted by the Spanish institution Influencity, among more than 20 countries in Latin America, Brazil has the most influencers and the highest proportion, with one out of every 20 Brazilians being an influencer.

In addition, Brazil is a country with a highly developed amateur culture. Influencers can not only bring traffic but also create word-of-mouth marketing, bringing better spread.

However, due to the distance and time difference of Brazil, implementing influencer marketing poses certain difficulties. Therefore, you can choose some professional overseas influencer marketing platforms such as Nox Stars to help brands effectively solve related problems in the influencer marketing process.

05. Conclusion

Although objectively speaking, due to factors such as geographical location, Brazil faces greater difficulties in going global compared to Asian countries. However, overall, Brazil is a very high-quality market, with relatively less competition in various fields compared to popular markets such as Southeast Asia.

Therefore, as long as sufficient preparation is made in terms of product quality, localization, operation, and payment methods, it is believed that Brazil can bring unexpected gains to brands.

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