B2B e-commerce to grow 19.7% per year through 2030

Growth is driven by emergence of B2B online marketplace platforms


Ambev is betting big on Bees, its digital sales service for bars and restaurants — Foto: Márcio Garcez/Folhapress

Ambev is betting big on Bees, its digital sales service for bars and restaurants — Foto: Márcio Garcez/Folhapress

Marketplace platforms, which bring together products from several retailers or manufacturers, have become a common environment in the consumer’s buying habits. Now, however, it is in transactions between companies that this model is growing at accelerated rates, promising to increase the customer portfolio of the industry, which can also capture data that help to define portfolio strategies, pricing, and even to sell services linked to products.

Ambev, for example, is betting big on Bees, its digital sales service for bars and restaurants. Besides its beers and soft drinks, the group houses in its ecosystem “small stores” of BRF, M. Dias Branco, Pernod Ricard, and Beam Suntory. By the end of the first quarter, the annualized gross merchandise volume sold (GMV) reached R$1.2 billion. BRF itself has teamed up with the technology company VTex to develop a marketplace in Chile.

According to Isaac Pessanha, VTex’s B2B leader, demand from companies for projects for these ecosystems has grown by triple digits. “The market is still incipient in Brazil and Latin America for the potential it has,” adds Erick Buzzi, VTex’s vice president of sales.

The B2B platform model is “currently at the stage B2C [sales to the final consumer] was 10 years ago”, says Guido Carelli, vice-president of B2B at Infracommerce, which develops software for online commerce. This year alone, the business unit headed by Carelli is developing 15 to 20 marketplaces for companies. Unilever’s Compra Agora platform is one of them.

Carelli says the industry began to realize the growth potential of this channel, especially for reaching small and medium sales points, such as neighborhood grocery stores or bakeries. The B2B business already accounts for 30% to 40% of Infracommerce’s revenue.

Data from research firm Grand View Research indicate that B2B e-commerce moved $6.88 trillion in 2021 and that the growth of this market should average 19.7% per year through 2030. Online retail for the end consumer, which is more widespread and experienced a boom in the pandemic, is expected to grow 9.7% per year until 2028.

But the big jumps are likely to come from the marketplaces. The estimate of the British payments research and consulting firm IBe TSD is that they will have a $3.6 trillion turnover in 2024, accounting for 30% of all B2B digital sales. In 2018, these sales were no more than $680 billion.

Among the reasons for creating a B2B marketplace, or joining a platform as a seller, are the ability to expand presence geographically, increase order frequency, and the number of items sold. According to Mr. Carelli, when a company starts selling on a marketplace, its sales can jump by 15% to 25%, depending on the region in the country.

Besides reducing costs by not needing to send a sales representative to the site, the manufacturer has more data about the purchasing habits of small and medium retailers, and the salesperson starts to act more like a consultant, suggesting what the retailer can buy and “reactivate” those who haven’t placed an order in a while, say executives interviewed by Valor.

The B2B marketplace does not come alone, says Pessanha. “It brings potential and the need to reevaluate credit even to foster that ecosystem.” In other words, in addition to selling their products, manufacturers have a better understanding of the credit profile of small retailers that were previously only served by distributors. Thus, the industry can define how much credit it is willing to give to each buyer, either in terms of limits or payment terms.

There are, however, some obstacles to development. One of them is the risk of cannibalization. Carelli says that the pace of emergence of platforms should continue intense over the next five years, but from there on there should be a consolidation.

For Fernando Gâmboa, partner and leader of consumption and retail of KPMG in Brazil and Latin America, although they benefit from working with “raw” market data and start to function as full-service providers, the companies are advancing in the distributors’ territory. “Besides breaking long-term contracts with the distributor, he will stay in the region and may bring in competitors.”

But both VTex and Infracommerce executives affirm that the figure of the distributor does not cease to exist. He can even enter as a seller on the platform, selling items from other companies, they say. “It is not disintermediation. It helps the distributor to increase inventory turnover, to optimize truck use. There is more information exchange,” says Mr. Pessanha.

*By Raquel Brandão — São Paulo

Source: Valor International

E-commerce drives number of regular exporters

Online platforms create opportunities for new companies abroad, experts say


Expansion of e-commerce has created opportunities for new companies to venture into exporting — Foto: Ana Paula Paiva/Valor

Expansion of e-commerce has created opportunities for new companies to venture into exporting — Foto: Ana Paula Paiva/Valor

The growth of internet sales — and a favorable exchange rate — drove commerce into a boom of new exporting companies with continuous sales to other countries. The number of those companies increased to 15,770 last year from 14,490 in 2019 — up 8.9%.

Commerce expanded nearly two times faster (16.5%) than the average and accounted for nearly one-third of the total number of regular exporters in 2021. The manufacturing sector remains the leader, with 9,400 companies last year, but its growth from 2019 to 2021 was smaller, at 2.8%. The data are from the Center for Foreign Trade Studies Foundation (Funcex).

For specialists, the expansion of e-commerce has created opportunities for new companies to venture into exporting. According to a survey by economist Daiane Santos and statistician Henry Pourchet, with Funcex, companies debuting in shipments overseas totaled 5,270 in 2021, 26% more than in 2019, before the pandemic hit Brazil. Again, commerce, with 2,500 companies, led the pack, with an increase of 45.8%. Industries added 1,960 companies, with an advance of 17.2%.

The devalued exchange rate, although not considered as a guarantee or as the only condition for the increase in shipments, also served as a stimulus, at the same time that the health crisis forced companies to improve their logistics structure, making the transportation and delivery of products more efficient and faster, said Ms. Santos.

The survey shows that in 2021 exporters totaled 30,960 companies, but only about half are regular exporters – those that made shipments every year during the period studied since they started selling overseas.

According to the survey, commerce was already gradually gaining more space among continuing exporters as the number of exporters grew. In 2000, the manufacturing segment accounted for 65.8% of regular exporters while commerce represented 24.5%. Ten years later, those shares were 64.8% and 27.9%. Last year they closed at 59.7% and 32%, respectively.

The data show the great interest that the foreign market arouses, especially from smaller companies that can serve certain niches in which small importing companies seek small suppliers, said José Augusto de Castro, head of the Foreign Trade Association of Brazil (AEB). The growth of trade over time among regular exporters, however, shows that the industry has more difficulty in sustaining its shipments, often taking advantage of favorable cycles or more irregular export opportunities.

Mr. Castro also considers that although the devaluation of the real may have created a temporary advantage for the surge in the number of companies, the exported values are concentrated by relatively few companies. The number of exporting companies in the agribusiness sector, he points out, exemplifies this well. In a sector in which newcomers are less common, regular exporters historically stand at around 300 companies. In 2021 there were 302, which represented about 2% of all regular exporters. In terms of value, the shipment of agricultural products last year accounted for 20% of the $280.8 billion exported by Brazil.

Ms. Santos and Mr. Pourchet say in the survey that the most recent export momentum was influenced by government stimulus policies and also by the economic situation. Between 2009, the first year after the international financial crisis, and 2014, the number of exporters stabilized at around 21,000 companies.

With the contraction of the domestic economy between 2015 and 2018, there is an increase in the number of companies entering the export base, with a new level of about 25,000 companies at the end of this period. In the last four years, there was a more vigorous year-over-year growth, maintained during the pandemic period.

Ms. Santos foresees that the number of regular exporters and opportunities will increase further amid the reorganization of the international trade in search of resilience and supplier diversification. “But it is not possible to rely solely on exchange rate devaluation to encourage new companies to export or help sustain shipments by newcomers,” she said. To do so, she stresses, it is necessary to have support from programs that encourage exports, including guidance and qualification for companies.

*By Marta Watanabe — São Paulo

Source: Valor International

Embraer enters cargo market with jet conversion

Jets are designed to meet transportation demand of e-commerce and modern trade


Embraer’s converted E-Jet — Foto: Reprodução

Embraer’s converted E-Jet

Embraer unveiled on Monday its entry into the air freight market with the launch of passenger-to-freight conversions of models E190F and E195F.

The jets are designed to meet the transportation demand of e-commerce and modern trade, which “require fast deliveries and decentralized operations,” the company said.

The conversion is available for E190 and E195 aircraft, scheduled to start operating in early 2024. Embraer projects a market for aircraft of this size of nearly 700 units over 20 years.

The new freighters fill a gap in the market, positioning themselves between turboprops and larger narrowbody jets, said Arjan Meijer, CEO of Embraer Commercial Aviation. “Our P2F E-Jet conversion hits the market as the demand for airfreight continues to take off, and as e-commerce and trade, in general, undergoes a global structural transformation,” he said.

The conversion will be done at Embraer’s units in Brazil and the jets can handle payloads of 10.7 tonnes (E190F) and 12.3 tonnes (E195F).

By Stella Fontes — São Paulo

Source: Valor International

E-commerce platforms pass on costs to customers

Veja o que você precisa para abrir um e-commerce

The rise in interest rates, the increase in logistics costs and the need for companies to recover some profitability have led Brazilian online marketplaces to raise prices. On such e-commerce platforms, product or service information is provided by multiple third parties, and they charge for the services they offer. They have already reported there was a reduction in shipping subsidies, reflecting an increase in the value paid by sellers, and a raise in commission rates.

Interest-free installments have also been reduced, and charges for fees that were previously exempt are expected to begin in the coming months. Some of these announcements have been made to sellers in recent weeks, and the measures vary from company to company, but involve most of the major platforms — Mercado Libre, Via and Amazon —, retailers told Valor.

According to consultants, this may be a sign of greater rationality in business management, after companies have lost a lot of market capitalization and after strong competition has affected the margins of some companies.

Those measures may increase final prices at a time when the inflation in the digital environment already exceeds the official inflation. Sellers say they will have to raise prices. Online inflation was 18.8% from January to October, above the Brazil’s benchmark inflation index IPCA or the General Market Price Index (IGP-M).

Sources say that some platforms have been guiding retailers to “improve” their prices so to adapt to these increases. Online marketplaces do not interfere in the commercial policy of the stores, but there is constant contact between them.

The most important change is coming from Mercado Libre, which communicated the changes to its partners on December 9. When contacted, the company confirmed the decision. Among the main changes in the rules is a reduction in the interest-free installment plans, and a reduction or elimination (depending on the retailer) of the freight subsidy Mercado Livre used to give to those who chose the platform for its deliveries. It will also take longer for the retailer to receive the money for the sale.

In a change announced this month, purchases of up to R$299 can be financed in up to nine interest-free installments. Between R$300 and R$1,499, the installment plan applies in 10 interest-free installments. Previously, in both situations, there was no fee charged in up to 12 installments.

Mercado Libre will also keep the shopkeeper’s resources in cash for longer. As of February, retailers with a reputation already calculated by the platform will receive the purchase price within five working days after delivery by the group. Previously, this happened in 48 hours.

Also since this month, there was an average increase of 3% in shipping costs that the shopkeeper pays for the free service on products up to 30 kilos. The subsidies have also been changed: retailers who sell for delivery within 24 hours, and with a good reputation on the website (green rating), now have a 10% subsidy on the shipping rate in 2022 instead of 40% in 2021. This change applies to new items starting at $79.

If the merchant’s reputation is not good, the company will no longer give discounts on the free shipping rate. It is a way for the company, in addition to reducing costs, to encourage sellers to have better grades.

Finally, there was also a change in the policy regarding financial investments. After February, the accounts of companies will no longer generate yields paid by Mercado Pago, the company’s payments arm. Funds held in accounts offered yields above the savings account.

For the company, the changes reflect the worsening economic situation. “We are living a very challenging outlook, with very strong interest rates and inflation, and with increases in costs such as energy and fuel, which affect the business. We intend to continue investing, but we are not unscathed by all this, so we have made some adjustments,” said Julia Rueff, head of the Mercado Libre’s online marketplace for Brazil.

Ms. Rueff believes that the company continues to have a competitive set of conditions compared to its rivals and sees no risk of losing sellers. So far, only Magazine Luiza and Americanas have not reported changes in rules. “These are adjustments to preserve our value proposition, and everything we offer and have been improving. We are a technology company, which demands hiring, investments,” she said.

“And if you analyze it well, this 3% increase in shipping costs, for example, for a much higher fuel inflation, we pass it on much less. So it was something studied and passed on to the store owners in advance.” In 2021, the company announced R$10 billion in investments in the country, more than double that of 2020.

Also in late 2021, Via (Casas Bahia and Ponto) informed storeowners about the withdrawal of discounts on their commission rate and also unveiled increases. The company exempted new sellers to draw more retailers and reduced the rates for others.

According to sellers consulted, Via raised this rate by up to five points compared to 2020. “They reduced [the rates] in part of 2021 to 2%, 3% to even 5%, and that was up to 14% previously. But as of this year, the overall rate [for all segments] went to 21%. For our lines, the commission went up to 18% from 14% on average,” said Jefferson Oliveira, head of Viabem, a healthcare products store.

Another change was the reduction of the interests-free installment plan. “They used to sell an R$100 product in 10 installments of R$10, without interest. Now, depending on the price of the product, they do only up to three times without interest. In six installments, they are charging 0.99% per month, a rate that they did not have last year,” the executive said.

“The commission with which Via worked before lasted for a long time. It is not sustainable, so they went up about five points now,” said Roberto Wajnsztok, a consultant at Origin5, which provides services with tenants. “In addition, investments have skyrocketed for a sector with weaker sales. Just look at Mercado Libre’s spending. It is necessary to give an answer to the market in the next earnings report.”

Amazon begins, in March, to charge fees to collect parcels, and as of June the company will implement fees for storage of products in the company’s centers and for removal of inventory (when the retailer picks up their products back at Amazon’s centers). The information has been passed on to retailers for several months. The company maintains its fees of 8% to 16%.

For Mr. Oliveira, it will be necessary to pass on part of these hikes to customers. “Our internal costs have also gone up, and that adds up to these changes in the rules,” he said.

For Gabriel Lima, CEO of the consulting firm ENext, Amazon and Mercado Libre could even pass on more of the impacts on costs, especially in logistics, with the rise in fuel. “Either they can still move more, or they prefer to maintain a strategy still competitive against Magazine Luiza and Americanas, which can also make their hikes at some point.”

Magazine Luiza says it has not changed its contract conditions, with commission rate at 12.8%, which can reach 16% when there is a request for early payment. But it sees a normalization process in the market, after the phase of lower rates. The company declined to say whether it will make adjustments in the short term. “What we see is a normalization in the conditions facing a market more pressured by inflation and interest rates. The platform needs to be sustainable and the ‘seller’ needs to be able to manage these costs and have their margins positive. It has to work both ways,” said Leandro Soares, executive director of Magazine’s online marketplace.

Source: Valor international

E-commerce grew 41.2% in 2020 driven by pandemic

The pandemic led to an explosion of electronic commerce in Brazil, which reached R$231.9 billion last year, up from R$164.2 billion in 2019. The net growth (adjusted by inflation) was 41.2%, data from the Secretariat of Federal Revenue’s electronic invoices bulletin show. The pace of expansion accelerated with the pandemic. In March, the increase was 16% year over year. In May, with social-distancing measures, it was 31.8%. In June, there was an explosion: 73.9% growth. The increase remained above 40% in the following months. “E-commerce starts to impact brick-and-mortar stores,” the secretary of the Federal Revenue, José Tostes Neto, said.

Source: Valor International

September had highest average daily sales of year; e-commerce grew 57%

Average daily sales in Brazil reached R$29.5 billion in September, the highest level in the year, according to the Secretariat of Federal Revenue’s bulletin that analyzes electronic invoices. The value is 10.2% higher than in August and 20% higher than in September 2019. Year-to-date, sales are already 4.7% higher, in real terms, compared with the same period in 2019. September is the fifth month of sales growth, after the strong fall that occurred in the first months of the covid-19 pandemic. Electronic invoices capture sales between companies, mainly between medium and large ones, as well as e-commerce. E-commerce sales grew 57.2% in September compared with the same month in 2019.

Source: Valor International

E-commerce takes revenue from physical stores

The social-distancing measures imposed by the pandemic will cause $7.6 billion in sales to migrate from brick-and-mortar retail to e-commerce in Brazil this year, estimates Euromonitor International. The consultancy also sees a higher participation of e-commerce in total retail sales. This share is expected to reach 12%, compared with 8% in 2019. Euromonitor projects a contraction of $6.2 billion (6.5%) in Brazilian retail sales volume in 2020 when compared with last year. On the opposite end, e-commerce sales should reach $27.6 billion this year, up 45%.

Source: Valor International