Alibaba Group’s online marketplace AliExpress is expanding its services in Brazil, from payments options to delivery networks, as e-commerce takes off in Latin America’s largest e-commerce market during the coronavirus pandemic.
Last week, AliExpress launched an online portal for Brazilian merchants to sell to the swelling ranks of Brazilian consumers looking to shop digitally during the country’s third wave of the pandemic.
Brazil’s small and medium-sized enterprises (SMEs) will now be able to handle local transactions, in addition to shopping globally on AliExpress.
“We hope to boost the development of the Brazilian economy by digitally supporting local small and medium-sized businesses,” says Yaman Alpata, head of merchant acquisition for AliExpress, in an interview with Alizila.
Brazil’s E-Commerce Boom
Before the pandemic, Brazil was on track to record double-digit growth every year between 2017 and 2019. In the first half of 2019, Brazilian consumers generated more than 65 million e-commerce orders during the first half of 2019, a 20% increase over 2018, according to an industry report conducted every six months by e-commerce analysis company Ebit and global marketing research company Nielsen.
The pandemic further accelerated the adoption of online shopping, encouraging more women and older generations to go online, according to a 2020 survey conducted by the United Nations Conference on Trade and Development.
AliExpress entered Latin America nearly a decade ago to offer local buyers an opportunity to purchase products directly from sellers and manufacturers abroad. The platform’s “local-to-local” initiative began globally in early 2019, enabling some of AliExpress’s largest sales markets to register local sellers.
With thousands of newly registered merchants this month, Brazil is one of the fastest-growing markets outside of China to join the initiative, following Russia, Spain and France, said the company.
When AliExpress entered Brazil a decade ago, early adopters were mainly high-income, highly educated urban consumers living in metropolitan areas such as São Paulo or Rio de Janeiro.
“During the past year, the overall profile of our new users has shifted to reflect Brazil’s mainstream consumers, which means the mass market is starting to adopt online and cross-border shopping,” said Ken Huang, head of user growth in Latin America, AliExpress.
Traditional brick-and-mortar stores across the country began to pivot online in search of new sales growth during the pandemic, said AliExpress’s Alpata. To support the shift online, the platform lowered its commission rate to 5% from 8% starting in August.
Headquartered in the business hub São Paulo, the local AliExpress team has set up digital payment and local logistics networks to support its expansion across the country.
By tapping Alibaba’s international logistics arm Cainiao Network, the platform joined forces with a dozen of Cainiao’s local partners to provide delivery services across the country. All local orders made through Cainiao on AliExpress will enjoy shipping discounts up to 50% off standard fares.
AliExpress also partnered with Alibaba’s digital payment arm Alipay to support businesses setting up accounts, payments, and withdrawals in local currency, which means faster and better cash flow for Brazilian sellers.
Additionally, the platform is rolling out flexible installment options between 6 to 12 months to support a large portion of the country’s financially vulnerable population during the recovery from the pandemic.
Brazil’s e-commerce boom could indicate online growth in the region, said Alibaba’s Huang.
Lessons learned from the fast-moving market China could inform and shape Brazil’s e-commerce development. For example, social commerce and livestreaming have been adapted and localized on AliExpress to engage with younger, cashless shoppers in the region.
The platform also offers large-scale online training for its newly onboarded merchants starting September 1, where executives and e-commerce experts can share tips and know-how with attendees.
“Alibaba is a Chinese tech company, but we also have the vision to serve consumers worldwide. The addition of local sellers has been a major milestone this week. At the same time, shoppers can enjoy millions of product listings from Brazil and around the world,” Huang said.