One of the undeniable benefits the Internet has brought to the business world is the ability to penetrate new markets with relative ease. While Americans have been steadily growing their online shopping activities for the past 20 years, shoppers in places like Latin America and East Asia are just starting to make their mark on ecommerce. This poses a significant opportunity for online merchants, as well as a risk. The opportunity is to increase your brand’s global value and dredge new revenue streams. The risk lies in going to market the wrong way, thus wasting your time, money and energy, and ruining your brand’s potential for future growth.
This video from CyberSource, a payment management company, parallels our recent post regarding the Brazilian ecommerce scene and its viability as a growth market. Among other items, it explains the challenges posed by payments and fraud in Brazil. We learn, for example, some of the myths and realities of the local Brazilian payments scene, including whether credit cards in Brazil can be used for cross-border transactions, how long it takes acquirers to settle a credit card transaction, or if installments are truly important for Brazilian ecommerce.
This video also teaches us that:
- The growing online populations are centered more on phones than other devices, so devising a mobile-first strategy is key to winning Brazilian customers.
- Brazil has the largest market share of B2C ecommerce of any single country in Latin America — which is also the most unique of the Latin American countries given that it is the only country in the region that speak Portuguese.
- Payment methods are a necessary hurdle foreign merchants must overcome. For example, there are special regulations to which you, as a merchant, must adhere if you wish to accept things like debit card payments through your online store.
- Fraud is prevalent and managing it is difficult. In fact, companies who deftly prevent fraud in other markets find it difficult to do so when they expand into Brazil. Given that chip-and-pin cards have a high penetration rate in Brazil, fraudsters have increasingly moved online.
- Local government legislation and bank regulations encumber the ability for merchants to transact with Brazilian buyers, whether it’s a tax on online payments for card issuers or a policy of declining dynamic currency conversion transactions.
The key for most companies looking to sell to Brazilian consumers is to find ecommerce partners who understand the complexity of going to market there.
What challenges are you experiencing in your international expansion efforts?
Tell us about them in the comment section below.