April 7, 2011, 2:13 PM

Brazilian e-commerce spending set to jump 178% by 2016, Forrester says

Mexico, with a smaller consumer base, will experience a 209% spending spike.

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E-commerce sales in Brazil will reach $22.0 billion in 2016, up 178% from $7.9 billion in 2010, according to a new study from Forrester Research Inc.

Forrester’s Latin American Online Retail Forecast says much of Brazil’s near-term e-commerce growth will come from sales of consumer electronics, which now account for about 37% of online retail purchases.  The report notes that the country’s 81 million web users are active in social networks and expect free shipping offers and interest-free payment plans for their online retail purchases.

Mexico also appears poised for significant e-commerce growth. Online sales will reach $3.4 billion in 2016, up 209% from $1.1 billion in 2010, the report says. The report estimates that about a third of the Mexican population, or about 40 million consumers, are online, and that many Mexican consumers remain worried about being defrauded by online retailers. 

For foreign online retailers set to invest in the region, Forrester cautions that selling online in Latin America is different in several ways from e-commerce  e-commerce in the United States, Europe and Asia.  Import taxes, for example, are steep, especially in Brazil, where a Dell Inspiron laptop sells for $1,400 compared with $800 in Mexico and $500 in the United States, the report says.

As well, e-retailers that set up shop in the region need to ready themselves for the dampening effect on commerce from such large events as sports tournaments and Carnival celebrations, the report adds.  Last year’s World Cup soccer tournament provides a prime example, said Marcos Galperin, CEO of online marketplace MercadoLibre—eBay Inc.’s Latin American partner—during an earnings call with analysts last year. “There were four days when each of the three largest economies in the region saw transaction volumes fall to about half their normal volume, corresponding with the dates in which those countries played World Cup soccer matches,” he said.

James McQuivey, vice president and principal analyst at Forrester Research, will speak at the Internet Retailer Conference and Exhibition 2011 in a session entitled “The Convergence: How the coming together of the Internet and TV will change e-retailers' business.” Mike Gualtieri, senior analyst at Forrester, will speak in a session entitled “Do your web pages need a new fitness regimen?

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