Business

Building A Healthy eCommerce Business In Brazil

From political strife to the Olympics snafu, Brazil’s last decade has been a rollercoaster ride. But there could be hope on the way, with recent political stability, a flourishing startup scene, growing mobile penetration and a healthy eCommerce appetite showing promise for innovators looking to do business in Brazil. The second-largest economy in the Americas poses its own set of unique challenges. Get the scoop in the latest PYMNTS.com Doing Business In Brazil report.

Though Brazil is working with a very cash-based economy — the country’s cash share stands at 22.2 percent of its GDP — that doesn’t mean there isn’t room for eCommerce businesses to help drive a change in the payment landscape. Pedro Pandolpho, owner of online health food business Pronto Light, recently joined PYMNTS to share how the payment methods for eCommerce businesses have shifted in recent years and what that could mean for the future of digital payments in Brazil.

Here is an excerpt of the conversation.

PYMNTS: Please provide us with a high-level overview of your business and the customers you serve.

PP: At Pronto Light, we produce, sell and deliver healthy frozen food. Our customers are local and urban, and they also fall within the middle to upper social classes.

PYMNTS: Can you describe the customer shopping experience today — and how that has changed in recent years?

PP: When we started our business eight years ago, we had a big challenge, specifically for two reasons. The first was that we were trying to sell healthy frozen food, and in Brazil, people tend to assume frozen food can’t be healthy. Also, when we decided to be an eCommerce business, it was difficult to sell our products online because people didn’t have an interest in the digital sales channel. I remember on our first website we used the drag-and-drop technology to allow consumers to literally drag and drop products into their online shopping cart, which was a good experience for shopping. But when tablets and smartphones appeared, the technology no longer worked on those devices, so we had to quickly make a new website to address the new demands of digital devices.

PYMNTS: How do people pay for the things they buy on your eCommerce site? How has that changed over the years?

PP: At the start of our business, the payment method breakdown was 60 percent credit cards, 30 percent cash and 10 percent Boleto, the last of which is specific to Brazil. For the past five years or so, that has changed because we no longer work with cash and because credit card transactions now represent 85 percent of payments, 5 percent is Boleto and the remainder is made up of vouchers.

What we observed is the shift from 60 percent by credit cards to 80 percent, which showed that people were scared about paying with their credit cards on the internet.

However, that has changed drastically.

Last year, in November, we started accepting Visa Checkout on our website. It provides an easy way for consumers to buy things once they have registered their credit card with the service. It was a new technology for us, and I think it helps a lot of people with their shopping journey. But it’s still a very new product in Brazil, so people don’t necessarily know exactly what Visa Checkout is. No more than 5 percent of the credit card payments we receive are represented by Visa Checkout, but we’ve only been accepting it for two or three months. Visa is now pushing media and commercials to educate consumers on what Visa Checkout is, and I believe by the end of the year that percentage will surely increase for us.

PYMNTS: What has the impact of mobile to your business been, and how has that changed the way consumers engage with your business? You mentioned having to change the drag-and-drop technology because that didn’t work on mobile, but were there any other impacts?

PP: What we observed is that mobile and tablets are responsible for 65 percent of the access to our site, but when we talk about revenue, they account for only 25 percent. People check the website to know what they want, but when they shop, they go back to the desktop for buying. Even though our website is responsive on mobile and we have an app, what we see is that, when people want to buy, they still go to desktop. At a recent seminar in Brazil, this was a point they specifically discussed because it’s a common thing in the country: to have more views on mobile while the revenues are still generated on desktops. But I think that’s going to change.

PYMNTS: Are there any forms of payment that may be accepted in the future? What is on your payments roadmap?

PP: I know the payment technologies will change, but we are not looking at any other specific type of payment that is happening or may happen in the near future. Mobile payments for us already exist, and what I expect is that the number of mobile payments will increase in coming years as people get used to buying and paying for everything with their mobile devices.

PYMNTS: What will make the biggest impact on your business over the next five to 10 years? Why?

PP: It’s very hard to tell specifically because technology moves so fast. I would say that our capacity to adapt to new technologies that are coming is key. I don’t know what’s going to happen, but we want to be prepared. For example, years ago, businesses had to change their website every four or five years, but nowadays, people suggest changing everything in about a year or two. Things are going very fast, so our ability to adapt to all of these changes will be very important. Specifically talking about our segment here, within the health industry, what we observed is that globally people are looking to eat better and are accessing more information about their health. We are in a sector that is growing significantly. In talking about health products and technology, I think we have two positive industries that will keep us busy over the next five to 10 years.

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About The Report

The Doing Business In Report, a PYMNTS.com and PayU collaboration, focuses on the state of business — and doing business — around the world and what’s coming down the road ahead. Proprietary data analysis focuses on the past, present and future of nations on the rise in the world of payments.

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