Thanks to smartphones, shopping trips are no longer limited by proximity to a local store or mall. While behind the average for the rest of the world, the eCommerce landscape in Brazil is growing quickly. In Q2 2014, purchases made through mobile devices (m-commerce) in Brazil represented 9.7% of all eCommerce sales in the country, and that percentage grew to 13.5% in Q2 2015. Globally, m-commerce represents 34% of all eCommerce transactions.
So, how are smartphone users in Brazil making these m-commerce purchases? Why is the rate of m-commerce usage much lower in Brazil than in other countries? We explore these questions in the first part of a two-part series about eCommerce and mobile transactions.
More payment options, more app usage
When we looked at the top used Shopping apps in Brazil, as measured by average daily active users, we noticed a trend among the top five—the most used apps offer more payment options beyond in-app credit card transactions.
RecargaPay: A user pays for mobile recharge with a credit card (in installments), bank transfer in-app, a cash deposit in store, or with Boleto.
AliExpress: A user pays in-app with credit card, bank transfer, or with Boleto.
OLX Brasil: A user pays seller in person or with bank transfer.
Wish - Shopping Made Fun: A user pays in-app with credit card.
MercadoLibre: A user pays in-app with a credit card or through MercadoPago (payment installments.)
With OLX Brasil, users never transact in the app. Rather, they use the app as a way to browse products, contact the seller, and coordinate the sale of the item off-line, not as a way to pay for the item itself. The app is popular—while it sits at number three in terms of daily active users, it’s the number one shopping app in Brazil when measured by data usage. OLX Brasil has 4x more data usage than number two AliExpress Shopping.
In a country with a credit card penetration rate of 50%, the acceptance of only in-app transactions as a form of payment is limiting Brazil’s adoption of m-commerce apps. Giving users multiple transaction options will fuel growth in the market.
However, it’s important to note that payment apps in Brazil have not quite taken off either. When looking at the top ten Finance apps in Brazil as measured by daily active users, we found that 70% were mobile banking apps. These apps allow a user to deposit checks, review bank statements, and transfer funds through their mobile device. Examples of these banking apps include Bradesco, Banco do Brazil, Itaú, and Minha Conta PF for Santander. What’s missing from this list are payment apps, such as mobile wallet apps.
Overall, Brazilian smartphone users don’t quite trust the technology of mobile wallet apps like Samsung Pay or Google Wallet. When smartphone users in Brazil were asked about the benefits of using a mobile app as a way to pay online or in a store, 43% responded that it was a convenient way to to pay, but only 11% responded that it was a safe way to pay. While users understand that these apps are convenient, they don’t trust them as the safest way to make a payment or purchase an item.
Please visit us for part two of this series: mobile transactions and m-commerce apps in India.
Interested in learning more about app usage in Brazil, India, or other emerging markets?