Sunday, August 7, 2011

Mapping Out Brazil's E-Commerce Sector

Brazil's e-commerce sector is growing quickly.   The country largely didn't experience Web 1.0  (Amazon, eBay etc) of the US in the late 1990's so the original e-commerce strategy of simply listing products online and shipping them to customers still offers some exciting opportunities for VC and growth equity investors.  

Why is Brazilian e-commerce a great place to look for opportunities?  
  • Growth of Internet users.  80mm people (40% of population) are connected to the internet and there is a government plan to increase the municipalities connected from 27% today to 80% by 2014. 
  • Increased adoption of e-commerce among Internet users. Forrester Research estimates that over the next five years the e-commerce sector will grow at an 18% compound annual growth rate (CAGR) 
  • Lack of assortment in traditional stores, especially outside of Sao Paulo and Rio de Janeiro. Retail stores in Brazil often offer a limited selection of products and, in comparison with other countries, there are much fewer of the large, low-price, megastores.
I've tried to map out below the e-commerce landscape.  I created this list over the last few weeks and refined it with the help of several people closely involved in the Brazil tech scene.   I'm sure that I have missed some of the relevant sites - please feel free to comment or send me an email if there are any major players that I (accidentally) omitted.  I am also including any relevant info that I have on the companies below.

Shoes - investment from Tiger Global - investment from Rocket Internet (a German firm whose strategy is to copycat existing companies)
Fashion - (Gilt Groupe copies)
Sportswear/Fitness - Investment by Endurance Partners (founded by Notre Dame grad Richard Lark, who I met this weekend at the Sao Paulo new student send-off party)
Makeup/Perfume - bought by Sephora
Haircare - profiled in previous post
Baby Products - Monashees investment (see previous post)
Electronics - wide variety of products - wide variety of products - wide variety of products, brick and mortar - brick and mortar
Pets  - brick and mortar
Online Photo Development
Office Supplies  - brick and mortar
Vitamins/Supplements/Non-prescription pharmacy  - brick and mortar - brick and mortar - brick and mortar - brick and mortar

Please note that this list is intended just to capture businesses that sell and deliver products.  It does not include middle-men sites like Peixe Urbano, Restorando or Mercadolivre.   If there are significant sectors or companies that I have missed please give me a heads up!

P.S.  Paula Fernandes (a Brazilian singer who I mentioned in a previous post) passed the 1 million CD/DVD's sold milestone 2 days ago.

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