Why is everything so expensive in Brazil? I’m Brazilian and lived there most of my life and back then I quite never understood why until I came across this article by the Economist and it all make sense: high taxation – there isn’t anything like an unique tax system, so it’ tax over tax, plus massively high import duties. Also the culture of buying everything on credit, either with a credit / store card or even paying by instalments – yes, post-dated cheques are still widely used there.
Years went by and Brazilians are starting to have more access to internet – and it’s only fair to say that goes almost hand-in-hand with the country’s e-commerce growth. According to an article recently featured on Business of Fashion, when Brazilian want to buy goods from abroad websites, Alibaba is already the third-most-used website — with a 20 percent market share – only behind EBay and Amazon
Brazilians are increasingly likely to be attracted by the low prices offered by Alibaba and even with import taxes and shipping can double the cost – it still makes the deal worthwhile. The long wait for the delivery is not a deal-breaker either, Brazilians don’t mind waiting one month or so for their good to arrive.
But will Alibaba’s growth in Brazil be sustainable?
Thing are likely to start changing in Brazil – the Brazilian Real recently reached the lowest exchange rate to USD in the last 10 years and Brazilian consumers should be taking that into consideration when buying from Alibaba as prices there are shown in US dollars.
I think that the globalization of e-commerce is and will be inevitable, especially for the emerging economies – consumers will always seek the best prices and deals. The only concern is how local companies will survive in this ever changing landscape.