Less than a month into the New Year and the e-retailer and marketplace announces plans for three additional U.S. fulfillment centers.
More than 60% of the Latin America 400 merchants are based in Brazil.
Wine.com.br is making a name for itself by providing 2,000 premium wines and champagnes from around the world to its Brazilian customers through a wine club, a growing selection of wines from Brazil and around the world, and Wine, its monthly magazine. These efforts have helped the merchant stake its claim as the largest online wine seller in Brazil.
The merchant tapped into a national population eager to buy wine online. In 2012 Wine.com.br, No. 63 in Internet Retailer’s 2013 Latin America 400, grew web sales by 85.5% to about $29.5 million from $15.9 million in 2011.
Wine.com.br is one of 248 Brazilian merchants—62% of the Latin America 400—taking advantage of the largest e-commerce market in Latin America. These Brazilian retailers’ web sales grew about 20% in 2012, to $9.60 billion from $8.00 billion in 2011. That was slightly ahead of overall growth for all Latin America 400 merchants, who grew online sales by about 18.5%, from $13.00 billion in 2011 to $15.42 billion in 2012. Brazilian web merchants’ web sales accounted for 62.3% of all sales in the Latin America 400.
As a region, Latin America’s online retail sales grew faster than in the U.S., where web sales in 2012 rose 16% to $225.54 billion according to the U.S. Department of Commerce. European e-retail sales also grew by 16% to $302.20 billion in 2012, says the Centre for Retail Research. Only in Asia did web sales grow faster than in Latin America last year, up about 32% to $256.50 billion, says Forrester Research.
Brazil is attracting outside web retailers as well, including Chinese online retailer Light In the Box Ltd. With a growing base of Latin American online shoppers hungry for inexpensive consumer goods sourced directly from Chinese manufacturers, online sales for Light In The Box are booming in Brazil.
In fact Latin America is the fastest-growing global market for Light in the Box, an online retailer that carries an inventory of 220,000 products ranging from apparel to housewares and home furnishings manufactured in China. In 2012, Latin America web sales for Light In the Box, No. 123 in the 2013 Latin America 400, were $12.9 million, up by about 214.3% from $4.1 million in 2011 and representing 6.4% of its 2012 total sales of $200 million. In comparison, sales in North America grew 46.8% to $48.0 million in 2012 while European e-commerce sales increased 75.1% to $101.4 million.
Even as e-commerce grows, it’s limited by a relatively undeveloped transportation infrastructure in Brazil, the world’s sixth-largest economy. The Brazilian government has built nearly 1 million miles of roads and highways, but only about 13% of them are paved, according to the Institute of Applied Economic Research. Brazil plans to spend an estimated $30 billion to upgrade its infrastructure in time to host the World Cup soccer championships in 2014 and the summer Olympics in 2016.
Still, companies like Wine.com.br are finding ways to satisfy shoppers and entice them to buy online. That’s not easy when selling wine, which the e-retailer’s marketing manager Ricardo Flores describes as an intimate experience. “Selling on the Internet is a cold relationship, and we fight every day to heat this relationship,” Flores says.
More data and analysis on how U.S. web merchants are launching or expanding their e-commerce programs in markets such as Brazil is available in the 2013 Latin America 400. The research publication is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order is available here.