Psyma Worldwide: Brazil
In another article in our “Psyma Worldwide” series, we take a look at the situation in brazil.
The Pandemic Legacy | Shifts in Consumer Behavior
Across the globe, the pandemic was a massive disruptor, with impacts beyond many facets of life – Brazil was no exception. The need for fast adaptation from both businesses and individuals left a lasting impact on consumer behavior and the overall market landscape. This topic continues to fascinate the Psyma Brazil team; here are some of our observations:
BRAZIL’S DIGITAL ACCELERATION AND E-COMMERCE BOOM
One of the key changes brought on by the pandemic was the accelerated adoption of digital technologies, whereas Brazilians were once skeptic and almost shy about e-commerce, tele-medicine, online education and virtual business meetings, mostly favoring physical interactions, the pandemic forced the population to embrace online platforms for various aspects of their lives.
E-commerce skyrocketed during the years following the pandemic with significant growth between 2019 and 2022, where online shopping revenue almost doubled to nearly 170 billion Brazilian reals (BRL). The trend didn’t stop there, in 2023 revenue increased again by 9.5% from the previous year [source: Statista]. This increase also wasn’t necessarily led by the younger adult population, instead over half of online shoppers in Brazil in 2023 were between the ages of 35 and 54 years old. The most popular categories were fragrances and cosmetics which accounted for over 15% of total purchases, followed by home decor at 12% [source: Statista].
Mercado Livre (known in the rest of Latin America as Mercado Libre) was the most visited online retailer, followed by Amazon, which significantly intensified its presence in the country since its entrance in 2012. By 2019 Amazon Prime was launched in the country, perfectly aligned for what was to come in 2020 [source: Statista; AboutAmazon.com].
Before COVID, in 2019, Amazon operated 1 fulfillment center in the country and had 1 million products available to Brazilians. Fast-forward to 2024: Amazon now boasts 10 fulfillment centers and 90 delivery stations, with an offering of over 100 million products in both its retail and marketplace segments. Amazon states that this coverage enables delivery in 100% of Brazilian municipalities, including the hard to reach and avoided favelas (Brazilian slum or shantytowns in large cities like Sao Paulo and Rio de Janeiro). One such community, Paraisópolis, in São Paulo, is home to around 100,000 people and approximately 20,000 households, where Amazon has set up a delivery station that delivers up to 2,000 packages a day [source: AboutAmazon.com].
Interestingly there are communities in the Amazon region, in a rural zone called Iranduba, that receive packages by boat, in up to 2 days, for thousands of products.
These shifts are crucial for businesses navigating the Brazilian market post-pandemic. Whether you are an e-commerce enterprise or a local startup, knowing where the market is headed empowers strategic planning across industries. The Psyma team is passionate about diving into data, identifying actionable insight and uncovering opportunities. Let’s delve into the data together!
FROM BRANCHES TO BYTES: HOW BRAZIL’S BANKING SYSTEM EVOLVED IN THE PANDEMIC
Known across the financial sector as a success story, Brazil’s PIX instant payment system has revolutionized money transfers and transactions across the country. It has been a game-changer, disrupting the credit card sector with its mostly free and instantly settled transactions, making it extremely convenient for users: payers and receivers.
Launched in late 2020, PIX quickly gained prominence and played a pivotal role in financial inclusion, encouraging more Brazilians to formally participate in the financial system. Pre-2020 many individuals, especially those in remote or underserved areas, didn’t have access to formal banking services. Traditional brick and mortar bank accounts were commonly cumbersome, expensive or simply unavailable to a significant share of the population.
By the end of 2022, approximately 71.5 million individuals who had not previously used any form of electronic credit transfers over a one-year period prior to launch, had already adopted PIX [souce: IMF].
With its successful adoption, the Central Bank is already working on introducing new features, including the option of paying through installments ("PIX Garantido"), which could potentially make PIX more competitively aligned with credit cards. These product offerings will push the credit card industry to further evolve their own game.
PIX not only reshaped Brazil’s payment landscape and challenged the credit card industry but also paved the surge in online accounts – both within the traditional banking houses and the more innovative FinTechs and digital banks, furthering financial inclusion in the country.
With over 700 active FinTechs in 2023, Brazil stands out as the leading FinTech hub in Latin America, with Nubank, Inter and C6 Bank being among the top independent digital banks in Brazil. Notably, Brazil’s Nubank, founded in 2013, and noted as the fifth largest credit card issuer in Brazil in 2019 [Source: Harvard Business Publishing] transformed into a 100% digital bank, allowing customers to manage all their financial needs entirely across its app and website. It went from around 10 million customers in 2019, to over 30 million in 2020, and over 40 million users in 2021 [Source: The Financial Brand], doubling that figure to over 80 million customers in Brazil in mid-2023 [Source: Nubank Newsroom].
Understanding these dynamics is essential for a clear understanding of the Brazilian consumer profile. Entry-level products and services, especially aimed at the lower SEGs, have to understand the financial offerings available to their clients for those bigger ticket items. Let us join you on your research journey and allow us to enrich your data with key market considerations and insights.
As the Brazilian Central Bank expands PIX solutions globally, consider the potential impact and benefits this can have for your consumers and your industry. How will you leverage these advancements? Let the Psyma Team support you in exploring these changes and emerging opportunities. Let’s explore the data together!
THE ADOPTION OF REMOTE WORKING: BEYOND THE CONCRETE JUNGLE
The COVID-19 pandemic triggered significant changes in work dynamics worldwide, and Brazil was no exception. While remote work became more commonplace, increasing the quality of specific services and demands, it also revealed unique challenges specific to developing nations like Brazil.
Working from home was only feasible for about 10% of the population [Source: phys.org], primarily for those in managerial or administrative roles, mostly holding university degrees and already enjoying a relatively high standard of living. With jobs that required little to no formal education still demanding a physical presence. The fortunate few who could work remotely jumped at the chance, especially given the hefty commutes in major cities like Sao Paulo. Some even considered relocating to rural areas or smaller towns during lockdowns, seeking a slower pace and cleaner air, with many lucky enough to pack up their belongings and head off to their beach or country home.
Some companies also adapted by allocating budgets to boost employee broadband accounts, offering office furniture bonuses and more – all to maintain workforce productivity. And as the workforce ventured beyond highly urban areas, the internet infrastructure was pushed to its limits and beyond.
Since the lockdowns, Brazil has made significant strides in advancing internet access for households. In 2019, 71% of households were connected to the internet; by 2023, that figure had risen to 84%. Rural areas saw an even more pronounced increase, jumping from 53% in 2019 to 78% in 2023. However, it’s essential to note that internet access doesn’t always mean broadband internet, mobile internet plays a role as well. Despite these gains, approximately 11.5 million households are still without a computer or internet access [Source: ICT Households 2019 & 2023 Survey].
Advancements in high-speed fiber connections, recent IPOs and various mergers and acquisitions – especially amongst start-ups leading the way in smaller urban and rural areas – promise to connect the remaining Brazilian population in no time.
While fully remote jobs may have declined, many still have the opportunity to work from home part of the week. Allowing workers to continue to benefit from the cut in commuting time and enjoy and continue to spend on exercise equipment, gym memberships, healthier cooking, hobbies and entertainment services etc.
Remote working is reshaping how we spend our free time while driving industry growth in the entertainment, food and health sectors and beyond. How has remote work influenced your personal productivity and your sector? The Psyma team is eager to delve deeper into the trends and opportunities brought about by this shift with you - let’s dig into the data together!
About Psyma Brazil
Psyma Brazil, founded in 2008 by Ana Schaeffer and Holger Rothemund, both veterans of other PSYMA GROUP AG companies in Germany, brought a wealth of international experience and expertise to the Latin American market. Leveraging their extensive training, the Psyma Brazil team significantly enhanced the company's presence in the region. With the Psyma Group AG's legacy of decades of operations in Latin America, Psyma Brazil continues to thrive as a beacon of market research excellence, bridging gaps between local insights and global standards.
