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Brazil Is Online — but Not Shopping There Yet

The Cariocas, as the residents of Rio de Janiero call themselves, like to joke that the people of São Paulo, the Paulistanos, love to shop because they don’t have any beaches.

That might be true. But little of that luxury shopping — in São Paulo or in the rest of Brazil — is happening online.

Brazil has clearly embraced the online universe, with one in every three people having access to the Internet. But that figure is not translating into online luxury sales for social and economic reasons.

“Shopping is a fundamental part of the Brazilian culture,” says Ana Santi, deputy editor of Draper’s magazine who has a popular blog called Born in Brazil. “In São Paulo, their beach is the shopping malls.”

Luxury customers in Brazil are extremely brand conscious and put a large importance on perceivable wealth that they display through brands, “especially the ones with more recognizable logos,” remarks Juliano Corbetta, the editor of Made In Brazil magazine. Add to all that the fact that a high level of service is expected by customers, who enjoy being pampered by salespeople, and it explains why it is hard to lure a top-tier clientele into the fledgling, antiseptic world that is the current e-commerce experience in Brazil.

“The market is still very much on the initial phase of development,” says Carlos Ferreirinha, the founder of the luxury brand marketing agency MCF Consultoria & Conhecimento, based in São Paulo. He expects the country’s online luxury industry to come of age in two to three years: “By 2014 we will have something strong.”

But, he noted, for that to happen the country’s Internet infrastructure will have to catch up with demand. Most of the population still uses DSL landline connections, which are slow and do not operate well for more advanced uses like video download and real-time game-playing.

Another consideration is the cost of shipping luxury goods from the United States or Europe, as well as the customs duties, which sometimes can exceed the price of the purchase.

One of the most successful e-retailers in Brazil is e-closet.com.br, which features most of the domestic high-end designer labels and a number of international brands. As import and export restrictions were only loosened in Brazil during the 1980s, Brazilians are generally more familiar with the names of domestic luxury brands than international ones, although thanks to the power of the Internet, that dynamic is starting to change.

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Brazil's shoppers still prefer places like the Iguatemi mall in São Paulo, above, but observers say online shopping should boom over the next few years.Credit...Lalo de Almeida for the International Herald Tribune

One international e-commerce group that is taking the customs issue head-on is mrporter.com, the men’s wear site, and its sister operations, netaporter.com and theoutnet.com. “With our goal being to provide fantastic service and the ultimate ease of use to our customers, we introduced a duties-paid policy for Brazil, taking the guesswork out of knowing the total amount customers will be charged to get their orders in hand,” says Alison Loehnis, vice president of sales and marketing at netaporter.

Another international e-commerce site that has homed in on the Brazilian market is farfetch.com. An online fashion marketplace for independent fashion boutiques in Europe and North America, the site is a kind of online middle man that connects Internet shoppers with e-retailers selling designer labels.

For more than two years the site has been building a local presence, and now it has a staff of 25 in São Paulo. Its Brazil-only marketplace has made a point of offering domestic brands, prices are listed in Brazilian reais, customer service is in Portuguese, and there is an installment payment option, a service offered at most stores in Brazil but infrequently on e-commerce sites.

“Online shopping is still relatively a new concept for Brazilians,” says Mr. Corbetta, adding that people’s fears of credit card cloning and fraud, both of which have been problems, were online retailing’s major stumbling blocks. More secure sites and a budding middle class that has found itself with disposable income have helped to bolster sales.

According to MCF, the marketing agency, 30 percent of the country’s Internet users bought something online in 2010, with each buyer spending an average of $820 — but most of the purchases were books, DVDs, appliances and electronics.

The good news for e-retailing is that a large portion of those sales are coming from Brazilians younger than 30. Sixty percent of the country’s population is younger than 29. And, of course, younger Brazilians are the most Internet-savvy sector, spending an average of nine hours a day on Web-related activities, according to MCF.

To tap such buyers, brands say they need to harness the country’s booming social network craze. Seventy-nine percent of Brazil’s Internet users are part of at least one social network and commonly spend more than six hours a month updating their pages, according to Agência Click, a digital advertising and marketing agency with four offices in Brazil.

Mr. Ferreirinha of MCF has been recommending that luxury brands create local fan pages on sites like Orkut and Facebook and generate videos in Portuguese for YouTube.

But he also stresses that the key to conquering the online luxury market is the “human touch” and keeping a sense of joy with the process: “Brazilians have a very joyful spirit.”

That human touch might just come in the form of bloggers. Already a powerful force in a large portion of the luxury online world, blogging is just now catching on Brazil. Agência Click calculates that 2.6 million Brazilians update their blogs daily, which ranks the country as among the world’s most active in terms of blog activity.

A correction was made on 
Nov. 9, 2011

An earlier version of this article referred to the Web site theoutnet.com as outnet.com

How we handle corrections

A version of this article appears in print on   in The International Herald Tribune. Order Reprints | Today’s Paper | Subscribe

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