E-commerce is booming in Brazil. Buoyed by the pandemic, online sales reached record numbers in 2021 and bolstered national companies like Magazin Luiza, which has seen an average annual growth of 61% over the past three years.
Founded in Uruguay but operating in Brazil since 1999, Mercado Livre has also grown strongly during this period. Last year alone, more than 1 billion company-labeled items were delivered to Brazilian customers’ doors.
However, what was not missed by the delivery people, porters of the buildings, and apparently not even the customers themselves who bought more during the pandemic, is the increasing number of packages with senders from the other side of the world.
These are orders from AliExpress, Shopee and Shein, which were so popular among consumers that they forced the local digital retail giants to declare war on foreign packages.
good and many cheap: These are the main reasons that led Brazilians to prefer Asian women when shopping online.
“The clothes I buy on AliExpress are pieces that we don’t find in more affordable stores. If there is a similar model, it has a very large variation in value,” explains architect Matheus Freitas, 26, who has shopped at Asian e-commerce for at least five years.
Delivery times, which until recently were the main obstacle to buying products from abroad, are falling drastically, Shein and AliExpress items arrive within 10-15 days — in the past, deliveries took literally months.
This is happening because Asians already understand Brazil as one of their main international markets and have started to invest heavily in local sellers, distribution centers and delivery partners.
Although it arrived here only in 2019, Shopee already established its own distribution center at the end of last year. With heavy investment in marketing, the Singaporean company hired Xuxa as a poster girl on TV and a few months ago surpassed Mercado Livre in the ranking of the most accessible apps by Brazilians, according to a report by the agency Conversion.
A reference when it comes to Chinese imports to Brazil, AliExpress changed the ships that brought the goods to the plane. The goal is bold: reduce the delivery time to just 7 days.
Unfair competition, tax evasion and sale of counterfeit products: Brazil’s digital retail companies have fine-tuned — and sharp — speech to fight back against the Asian invasion of the country.
The Institute for Retail Development (IDV), which brings together groups such as Magazine Luiza, Americanas and Via (Casas Bahia and Ponto Frio), has formally asked the congressman for measures to combat what it considers an illegal online market.
The main accusation is that Asian women take advantage of loopholes that allow them to sell here without paying taxes and even to sell illegal products, says Maurício Morgado, professor and coordinator of the Center for Excellence in Retailing at FGV/EAESP.
“Our market is 100% legal and formal. Some competitors outside do not play in a formal and correct way,” says Eduardo Galanternick, Vice President of Business at Magazine Luiza.
Alberto Serrentino, a consultant at Varese Consultoria de Varejo, says there is a “regulatory limbo” in Brazil that allows orders up to $50 to enter the country tax-free. The rule applies to orders from one individual to another, but Serrentino says it’s “extrapolated” to the relationship between businesses and consumers.
Buying and selling products from other countries is growing worldwide, but it is still a novelty, according to Serrentino. For him, this situation is a reflection of the complexity of this new system, which, being unknown, is not yet well organized.
ON UOL revealed that the Federal Tax Service is studying measures to prevent foreign e-commerce companies from selling goods to Brazilians without paying due taxes. The Tax Administration refused to comment on this initiative.
Shopee, AliExpress and Shein deny guilt: The companies say they are more interested in becoming platforms that sell products from Brazilian retailers or recognized brands than importers.
Filipe Piringer, responsible for marketing Shopee in Brazil, highlights the company’s partnerships with brands such as Heineken, Nivea, L’Oréal, Motorola and Philips.
Briza Rocha Bueno, director of AliExpress’s Brazilian division, rejects accusations of forgery and tax evasion. “This accusation makes no sense because AliExpress only sells products from sellers with a Brazilian CNPJ and after a process of verifying those CNPJs,” he says.
Shein, which in addition to sales also creates its own collections betting on low prices, has tried to gain the trust of Brazilians by partnering with digital influencers and even celebrities like Anita and Khloe Kardashian.
Faster and cheaper deliveries: The giants of the e-commerce sector in Brazil know that they will not win this war without their hands and have also invested in their logistics chains.
Luiza magazine, for example, has decided to fight back by using its nearly 1,500 stores nationwide as delivery points for those who shop online from more than 180,000 retailers.
“With physical stores, we will achieve the best connection between sellers and customers, in the shortest time and with the lowest costs,” says Eduardo Galanternick, vice president of operations at Magazin Luiza.
Mercado Livre announced that it is investing R$ 17 billion this year in opening four new distribution centers, 12 in total, and in expanding its fleet from four to ten aircraft. The goal is to reduce delivery times by 80% in more distant markets, in states in the north and northeast.
Even North American Amazon, which has been operating in Brazil since 2012, recognizes that it must strengthen itself in this fight. It is betting on fast and free deliveries, which it intends to expand to more cities in Brazil, and to increase the number of Brazilian sellers on its marketplace platform.
“They are doing what must be done, which is investing heavily in logistics infrastructure and technology, accelerating growth, developing services and making strategic acquisitions to diversify infrastructure and technology,” says consultant Alberto Serrentino about the local market’s reaction to the Asian invasion.
For Eduardo Yamashita, director of operations of Gouvêa Ecosystem, a company focused on retail solutions, the biggest winner in this war is certainly the consumer. “There are more options, and prices tend to fall. That’s good, as long as everyone pays the same taxes,” he concludes.