Our market of operation has a substantial size. Although we operate in other Latin American countries, our main market is Brazil. According to data from ABCOMM, the online B2C retail sector in Brazil would reach R$106 billion in 2020. According to yStats, in this same period the share of e-commerce sales in the Brazilian retail market (B2C) in 2019 was 7.0%, so that the B2C retail sector in Brazil corresponds to R$1.5 trillion.
The B2B segment, meanwhile, moved an estimated R$2.4 trillion in Brazil in 2019, according to Mercado & Consumo and the Busines-to-business Online index measured by E-Consulting. According to our internal estimates, taking into account the estimated volumes of the main platforms in the industry, about 1% of B2B transactions occur via e-commerce, and, therefore, we estimate that the online B2B market in Brazil corresponds to R$24 billion.
Despite substantial, the online market in Brazil is still underpenetrated when compared to other countries. Brazil’s B2C online retail penetration of 7.0% is still below countries like the United States and China, where the online segments represent, respectively, 21.3% (U.S Department of Commerce data, 2020) and 24.9% (Statista, 2020) of retail sales.
According to International Data Center (IDC), the e-commerce applications market has an estimated revenue of US$5.3 billion (2020) and is expected to grow by 12.2% per year between 2020 and 2024, reaching the US$8.5 billion mark in 2024.
Companies have increasingly invested in their online operations to be prepared for the growing relevance of e-commerce in retail sales in Brazil and worldwide. Factors such as (i) favorable demographics with millennials (a technological generation) gaining relevance in the age pyramid, (ii) change in consumer behavior, who has been seeking more convenience in purchases, (iii) increase of online engagement with the smartphones penetration increase and (iv) improvement of technological tools, which has pushed the trend of transferring retail sales from the physical to the online world.
We understand that the e-commerce journey consists of three waves, and the customer experience plays a central role for the companies’ online strategy, especially those wanting to win in the long term: