Cross-Border E-commerce fulfillment service for the Brazilian market
Looking for a new growth point for your business?
Ecommerce businesses looking to expand internationally encounter an outstanding opportunity in Brazil. The country’s ecommerce industry continued booming: in 2019, a quarter of the country’s population purchased online and ecommerce revenues grew by 12%, reaching a total of USD 26.4 billion. For 2021, the segment is forecasted to see a growth of 13%.
NOVATRADE helps Online Sellers to expand in Brazil via fully-managed and turnkey solutions. Partner with us to build your Ecommerce and brand presence in Brazil low risk and low cost.
One Complete E-commerce System
Novatrade is built as a single system for orchestrating the entire flow of commerce, from pricing pre-analysis, import management, customs clearance, inventory, and fulfillment orchestration. All critical commerce functionality is included and designed to work together in real-time so everything is always in sync and orders run smoothly, exactly as they should.
Restricted Access to Foreign Online Sellers
Overseas online shops cannot deliver their products to customer´s door because paying Import Duties from abroad is forbidden in Brazil.
80% of the Ecommerce market requires domestic payment methods but it is forbidden to provide Brazilian payment gateways from abroad.
Specialists’ word about Brazilian barriers
It is not legal to ship goods to Brazil under the Incoterm DDP scheme with delivered duty paid by the vendor. International merchants can estimate the final price including import duties for the consumer, but they cannot collect the payment for import duties. The import duties will have to be paid directly by the Brazilian consumer or a third party entity with legal representation in Brazil.
Imports and Fulfilment of E-commerce from Abroad to Brazil,
19 June 2018 / techinbrazil.com
Companies without a local entity in Brazil have restricted access to domestic payment methods. Most international merchants start their operations in Brazil accepting card payments and are faced with decline rates typically of 70%.
This happens because only about 30% of cards issued in Brazil, even international labels like Visa or Mastercard, are enabled for cross-border payments. Furthermore, access to alternative domestic payment methods, such as boleto bancário and online banking transfer, is also limited to local companies.
“Brazil: sell cross-border or go local?”,
20 June 2018 / thepaypers.com
When expanding cross-border into any new marketplace, conducting in-depth research into local fees and taxes is essential for preventing such nightmarish scenarios. In Brazil, for example, there are no less than seven different income taxes. An added headache is that they are cumulative.
Furthermore, merchants using cloud services outside of Brazil for an online store are charged 40% on top of the invoice as an additional tax. Brazil also imposes a flat import tax of 60% on the cost of merchandise valued up to $3,000.
As the buyer has to pay the taxes up front, the delivery process can sometimes drag on if the sum is not paid promptly. If you weren’t even aware of the existence of this tax, it follows that you also did not know that the item would not be delivered before payment was made.
The best solution to prevent this sort of nightmare is to consult with local experts who are familiar with the country’s taxes and tariffs before launching in that market.
“Cross-Border E-commerce Nightmares: How To Avoid Five Common Pitfalls”,
3 March 2016 / forbes.com
Major challenge associated selling e-commerce services into Latin America is that of regulation. There are at least six different regulatory landscapes that merchants need to understand and navigate with differing and complex tax arrangements.
“E-commerce in Latin America: Challenges, Opportunities and Rewards”,
07 February 2018 / allpago.com
Success Stories in Brazil
EngieApp is an Israeli company sponsored by Uri Levine, Waze co-founder, that specializes in a full car maintenance solution.
Thanks to an ergonomic OBD device found under the dashboard and connected to a phone app, EngieAPP allows you to diagnosis over 10.000 car errors and put you through its network of mechanics and gas stations to get real-time quotes from local service providers.
EngieApp launched in 2016 and is already active in the UK, Mexico and now Brazil.
They arrived in Brazil with big expectations, forecasting to double their global sales only in Brazil due to the size of the market. EngieApp contacted Novatrade at the end of 2017 to set up their operations quickly by the end of the year. A few weeks later they began distributing in Brazil through our cross-border fulfillment service benefiting from the Christmas sales increase.
Novatrade manages all operations from import to delivery and payment while digital and PR campaigns are launched continuously to support brand awareness.
In less than a semester, their sales boomed in Brazil making up 25% of their global sales with more than 25.000 products delivered and continue to grow.
Psio is the product of 20 years of R&D in variable frequency audiovisual stimulation. The product provides an innovative, simple and effective solution to rediscovering optimal well-being. Equipped with a MP3 player, PSiO is a pair of glasses which combines music and relaxation with voice with light stimulation.
Psio expands themselves in Brazil through Novatrade using two channels: online sales and network sales with ambassadors.
Novatrade helps off shore companies allows the ambassadors to avoid bearing the costs of investing in local stock and developing their network with the support of an Ecommerce platform where orders, payment, delivery and customers support is managed. On the another hand, a network build by ambassadors is maintained thanks to an online community to keep in touch any updates regarding Psio and let users share experiences and advice.
Launched in October 2017, they reach around 100 000 BRL turnover within less than 10 months Psio start to grow faster proportionally to their network expansion and target also today health and well-being institutes as well as medical centers.