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Evaluating Emerging eCommerce Markets – China and Brazil

China and Brazil flags

China and Brazil are both the “superpowers” of their respective continents and are often looked to by surrounding countries as a stabilizing force and an indicator of the financial climate of the geographic region. While both are viewed by many eCommerce professionals as an emerging market, there are some stark differences between the future of eCommerce in each country – as well as a few similarities.

Below is a table comparing the two countries, with data provided by CNN Money and Forrester Research:

eCommerce Brazil and China Comparison

As you can see above, the Chinese economy and online population is much larger than Brazil, so it’s to be expected that online spending in China is seven times greater than the South American country (projected to be eight times greater by 2015). Both countries have an age range for their median online shopper between the ages of 25 and 34, much younger than the median age of the U.S. online shopper which is approximately 40 years old.

Chinese eCommerce site Taobao is not only the most popular eCommerce site in China but also one of the most popular websites in the world.

Due to the developed eCommerce landscape in China it’s understandably the more difficult market to break into of the two. Website Taobao dominates eCommerce in China, attracting 50 million unique visits per day and holds approximately a 50% share of the B2C online retail market in the country (their site TMall has a strong B2C focus). Taobao is also the 12th most visited internet site in the world and the third most in China.

Ordering products online and paying in cash when the product is delivered (also known as “Cash on Delivery” payments) is still common in China along with other Asian countries – consumers also have a legal right to inspect products bought online when they arrive and can refuse products if they are deemed unsatisfactory. This return tactic is parallel to the nature of the Chinese society where product negotiations are commonplace compared to Western countries.

Brazil installment payments

In Brazil installment payments are offered on a wide array of different products and are not limited to high-end items.

In Brazil there is not a major online retailer which dominates the space as eCommerce has more of a “local” focus, with shoppers purchasing online from retailers specific to their geographic location within the country. Many consumers purchase tech products online which dominates the eCommerce industry in Brazil, unlike China (a leader in the luxury industry) which has a diverse product range similar to the United States and Europe. Installment payments are also very common in Brazil which allows consumers to purchase even simple household products online and pay for them over time.

While China may appear to be a more appealing eCommerce location on paper, an advantage Brazil does have over China for online retailers based in the United States is its geographic location. Many major cities in Brazil are located in the same time zones as U.S. cities, meaning most correspondence between key staff located in the two countries can be done during normal business hours – unlike China where the time difference can lead to communication and logistical issues. Another advantage Brazil has over China is its official language, Portuguese, is quite similar to Spanish which is spoken in 12% of homes in the U.S. and is taught throughout many high schools in the United States. Only 2% of the U.S. population speaks an Asian language in their homes and the difference between languages such as Chinese and Japanese are night and day.

In conclusion, both Brazil and China are set to more than double their online spending in the next three to four years. China clearly has a larger eCommerce market but the dominance of Taobao cannot be ignored. The Brazilian eCommerce market is smaller and more focused on product and retailer localization, meaning no online retailer currently has a dominant upper hand in the country. Both countries and online markets are important to global eCommerce not only because of their current and future growth but also because they can anchor eCommerce initiatives in Asia and South America respectively.