Will 2018 be the Year of the Smartphone in Brazil?

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Data disputes e-commerce growth and ad spending in 2018

An interesting divergence in indicators has emerged in Brazil between e-commerce projections and advertising projections. These two industries are painting very different pictures of the immediate future.

First, the e-commerce data suggests that nearly 80% of Brazilians prefer to make online purchases from a desktop or laptop. (By contrast, in other developing and developed e-commerce markets, mobile shopping is a significantly higher percentage. For example, in South Korea, Indonesia, and Japan consumers prefer mobile shopping over desktop or laptop at 44.2%, 66%, and 65.8% respectively.)

However, when examining the desktop/laptop advertising projection data, there is a different story. 2018 will be the year that more ad spending gets directed to smartphones rather than desktop advertising, suggesting that those purchasing the ads are anticipating more conversion will begin happening on smartphones.

The divergence in e-commerce growth and advertising spending could be attributed to the fact that Brazilians’ mobile internet access officially surpassed desktop internet access only 3 years ago in 2014. (Also note that smartphone penetration doubled in Brazil between 2014 and 2016.)

Given this, although more Brazilians are accessing the internet via mobile, there may have been a lag in consumers feeling comfortable purchasing goods from their phones, leading to larger portions of this newly mobile internet landscape preferring to shop online via desktop.

E-tailers are anticipating the growth of m-commerce to catch up to the growth of mobile internet, according to the observed increase in mobile advertising spending.

While there are different estimates for smartphone penetration in Brazil, the trend is a general increase—either 30%+ or as much as 52% of the population will have a smartphone in their hands by 2018.

Hence, advertisers are betting on a larger m-commerce market opportunity and increasing conversion rates. If other regions and countries are to serve as an accurate barometer, we can predict that Brazil will start turning the corner on m-commerce in 2018.

Conclusion

Armed with this new knowledge, there is a tremendous opportunity for either entering or re-entering the market in Brazil. Going straight for mobile commerce and focusing efforts on mobile advertising beginning next year offers significant growth returns as the market shifts from desktops and laptops towards mobile.

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