Southern giant an export draw

Brazil is a distant market for Hong Kong exporters in terms of geography but the southern giant’s size, rapid growth and demand for key items such as electronics make the country an attractive option.

The Hong Kong Trade Development Council’s (HKTDC) Research Department arranged a webinar earlier this month to help Hong Kong exporters reach out to Brazilian consumers.

Tough market

Charlotte Man, HKTDC Economist, said many exporters in Hong Kong have seen Brazil as a source of small orders with price-sensitive consumers, which made establishing relationships difficult. She pointed out that e-commerce has grown at double digits in the country over the past five years and now accounts for 5% of retail sales but is growing quickly. These factors could lead Hong Kong exporters to explore the Brazilian market through e-commerce.

Brazil’s population of 210 million has an 80-million strong bulge in the key high-spending 25- to 50-year-old generation, X and Y age groups, 38% of the total, she said. The young digital generations account for a third of the population but have yet to become consumers. They will be important e-commerce customers in future years since they are digital natives, and will naturally tend to purchase online, Ms Man pointed out.

Traders in Brazil prefer domestic platforms with Mercardo Libre, Americanas.com and Magalu (58% between them) outdoing AliExpress, Amazon and Shopee (4%).

Ms Man said sales of consumer-goods, the sector most Hong Kong exporters operate in, had increased strongly over the past five years.

Addressing the webinar from Sao Paulo, Taynan Aoyama – head of Partnerships - Cross Border for Americanos Mundo said Brazil’s 211-million population included 134 million internet users and 61.8 million e-consumers generating sales of 61.9 billion reais (US$12 billion) last year. Of these e-consumers, less than half (27.3 million) made cross-border purchases worth 12.9 billion reais. The most popular cross-border purchases were electronics, technology products and fashion and accessories.

The average age of e-commerce buyers is 37 and the male-female ratio is more or less even.

Mr Ayama’s firm is part of B2W Digital and specialises in global e-commerce (mundo means “world”). The firm takes account of unique Brazilian characteristics such as instalment payments and the popularity of mobile device use, which accounts for 75% of the firm’s traffic.