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WEBSHOPPERS

34 EDITION
TH
2016

www.ebit.com.br www.buscapecompany.com
TABLE OF CONTENTS
INTRODUCTION
• What is WebShoppers
03 • About Ebit
• Ebit Certification
• Methodology
• Tailored Reports

11
EXECUTIVE SUMMARY

CHAPTER 1
13 360º appraisal of the first half of 2016

CHAPTER 2
Online purchasing cycle
24
CHAPTER 3
The economic and political crisis
according to FecomercioSP
34
CHAPTER 4
FIPE/Buscapé Index

48
FINAL CONSIDERATIONS
• Main clients
• Glossary
54 • Communication support
• Press information
• Team/Contacts
INTRODUCTION

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INTRODUCTION | WHAT IS WEBSHOPPERS / ABOUT EBIT TABLE OF CONTENTS

WEBSHOPPERS

WHAT IS WEBSHOPPERS
Performed by Ebit since 2001, WebShoppers
is the highest credibility report on Brazilian e-commerce
and it is considered the main reference for professionals in this segment.

In this study, we will show the current e-commerce market scenario,


estimates for 2016, as well as changes in behavior and preferences of consumers.
Insights obtained in this research aim at outlining the online market direction
and contributing to understand and develop the sector.

ABOUT EBIT
P resent in the Brazilian market since January
2000, Ebit has been following the evolution
of online retail in our country since its begin-
tifies the quality of services provided by retail-
ers, consumers find arguments that help them
at the moment of decision.
ning, and it is a reference in this topic. Using a
sophisticated system that collects data directly For the executive, Ebit works as a source of
from the online buyer, Ebit generates detailed knowledge on e-commerce in Brazil, contri-
information on e-commerce. buting to the growth of business and of the
sector in general. Learn more on Ebit and its
On its website, Ebit ( www.ebit.com.br) pro- main products below.
vides relevant information for purchase deci-
sion-making processes, and it offers products This edition of the WebShoppers report uses
and services to retailers. Ebit's store certifi- information deriving from the research carried
cation helps consumers build trust in online out by Ebit with over 21,000 online stores already
purchases. Through a classification by medals certified and with its consumer panel, as well as
(Diamond, Gold, Silver, and Bronze), which cer- from ad hoc research and external information.

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INTRODUCTION | EBIT CERTIFICATION / BENEFITS FOR CONSUMERS / METHODOLOGY TABLE OF CONTENTS

EBIT METHODOLOGY
CERTIFICATION 1. THE CONSUMER VIEWS THE EBIT BANNER
0976 8765 6543 7098
ON THE PURCHASE CONFIRMATION
SCREEN, WHICH WILL LEAD THEM
09 7 1

TO THE SATISFACTION RESEARCH.

DIAMOND GOLD SILVER BRONZE


Pesquisa E-bit
2. CLIENTS ANALYZE THE ONLINE STORE ATTRIBUTING
POINTS BASED ON THEIR PURCHASE EXPERIENCE
AND OTHER PIECES OF INFORMATION, SUCH AS
SHIPPING, PAYMENT METHOD, AND DELIVERY.

E bit has partnerships with over


21,000 online stores. Once the con-
sumers complete a purchase on one of
3. ONE DAY AFTER THE DELIVERY
DEADLINE, EBIT SENDS A SURVEY
VIA EMAIL TO ASSESS THE POST-SALE
these stores, they are invited to answer EXPERIENCE OF THE STORE.

a survey. There are three steps: one im-


mediately after the effective purchase Pesquisa E-bit
4. A FEW WEEKS AFTER THE PRODUCT
IS DELIVERED, EBIT SENDS AN
ASSESSEMENT RESEARCH ABOUT
and another some days after, to assess OVERALL SATISFACTION WITH THE ITEM.
delivery, and the third one is about
product usability. The process is auto- 5. ACCORDING TO THESE SURVEYS,
THE STORES ARE CLASSIFIED BY MEDALS:
matic and simple, done over the Inter- BRONZE, SILVER, GOLD, OR DIAMOND,
net. Through these evaluations, Ebit ACCORDING TO PRE-ESTABLISHED CRITERIA.

calculates a score for each store and


classifies them by medals (Diamond,
6. BASED ON ALL INFORMATION
COLLECTED FROM CONSUMERS,
EBIT GENERATES REPORTS AND
Gold, Silver, and Bronze). INFORMATION ON E-COMMERCE AND
DISPLAYS THEM IN THE RETAILER'S AREA.

BENEFITS FOR S ince January, 2000, Ebit has already collected


over 25 million questionnaires, answered af-
ter the online purchase process, and over 300,000
CONSUMERS new questionnaires are added to this value on a
monthly basis. This compiled information gener-

T he Ebit Store classification builds


trust in online purchases and en-
sures a higher quality service for all
ates monthly Business Intelligence reports that
indicate the social demographic profile of the
e-consumer, as well as the most sold products,
users. Through the medal classifica- most frequently used means of payment, re-pur-
tion, which verify the quality of the chase indicators, among other pieces of informa-
services provided by the retailers, the tion. Through another WebShoppers edition, Ebit
consumer finds arguments that help wishes to continue to contribute to developing In-
them at the moment of decision. ternet and e-commerce in Brazil.

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INTRODUCTION | TAILORED REPORTS TABLE OF CONTENTS

TAILORED REPORTS
T he questionnaires, answered on a daily
basis by consumers, feed Ebit's databa-
se, and by cross checking this information, the
The reports offered by Ebit to retailers
comply with operational, tactical, and strate-
gic objectives, and engagement varies accor-
company has valuable reports which outli- ding to business needs. The Categories* defi-
ne consumer profile and also comparatively ne the areas recommended for each report.
analyze the services provided by online stores,
regarding points such as delivery, product pri- *Categories: commercial, executive, management, business
intelligence, logistics, marketing, products, customer service.
ce, means of payment, NPS®, among others.

GENERAL OBJECTIVE

SPECIAL STUDIES DEVELOPED FOR WEBSHOPPERS REPORTS

Business intelligence

Especially developed research for WebShoppers report:


6
E-commerce purchase cycle (WS34), Cross Border (WS33),
Mobile Purchase Habit (WS32), and World Cup impact (WS31). BI-YEARLY

OPERATIONAL OBJECTIVE

COMPARATIVE PERFORMANCE OF THE ONLINE STORE

Commercial Logistics Marketing Products Customer service

Comparative study between the market and its competing market, along an
1
evolution over the last 12 months. With information on e-consumer profile, purchase
frequency, purchase and delivery aspects, average ticket, NPS®, among others. MONTHLY

TACTICAL AND STRATEGIC OBJECTIVE

COMPARATIVE ANALYSIS OF COMMERCIAL PERFORMANCE

Commercial Marketing

Essential follow-up on the financial data of your store, comparing it with


definite market and general market. It offers the following data: sales, number
of orders, average ticket, general and new e-consumers, sales per categories
DAILY
and subcategories, results per region and state.

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INTRODUCTION | TAILORED REPORTS TABLE OF CONTENTS

TACTICAL OBJECTIVE

REAL-TIME FOLLOW-UP ON E-COMMERCE SALES

Commercial Marketing

Dashboard to follow and compare your store's sales vs. general market
on an hourly basis, with e-commerce sales information, number of orders,
average ticket, and share per device (e-commerce x m-commerce). Particularly
REAL TIME
for seasonal events such as Black Friday, Mother's Day, Valentine's Day etc.

DETAILED FOLLOW-UP ON E-COMMERCE SALES

Commercial Marketing

Detailed sales database of the online store compared to the general market (without
the store). The following information is shown: category, subcategory, order volume, 1
financial volume, shipping value, gender, region, type of device (desktop, mobile),
MONTHLY
new buyer, income range, reason for purchase, and type of shipping (paid or not).

TIPS ON MOST SOLD PRODUCTS

Commercial Marketing

List of the 10 most sold products in the market, in the most


important categories of your store (last 7 days).
DAILY

TOP E-COMMERCE SALES

Commercial

Information on the most sold products in e-commerce with


average ticket paid by consumers (including shipping).
WEEKLY

PRODUCTS THAT GENERATED MORE VISITS TO THE STORES PRESENT ON BUSCAPÉ

Commercial

Information on the products that generated more visits to the stores present 1
on Buscapé, predicting the purchase intention of consumers.
MONTHLY

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INTRODUCTION | TAILORED REPORTS TABLE OF CONTENTS

REAL-TIME COMMENTS BY CONSUMERS

Customer service

Comments made by consumers in the Ebit Certification Research,


at the moment of purchasing and after-sales, who answered “unlikely”,
“highly unlikely”, or “maybe” when asked about purchasing again. REAL TIME

COMMENTS BY CONSUMERS

Customer service

Comments made by consumers in the research shall be daily sent in Excel format,
containing several pieces of information such as complaints, compliments, or
suggestions, probability of purchasing again on that store and order number. DAILY

EVOLUTION OF THE MAIN MANAGEMENT INDICATORS - DAILY

Management Marketing Customer service

Dashboard to follow the evolution of your store’s service


quality vs. general market on a daily basis, attributed by your consumers
in the Ebit certification research: delivery performance, delay, NPS®,
DAILY
consumer profile, and comments on your store.

EVOLUTION OF THE MAIN MANAGEMENT INDICATORS - WEEKLY

Management Marketing Customer service

Information to follow clients’ scores in the Ebit certification research


on a weekly basis and their variation compared to the previous week,
analyzing purchasing aspects (price, payment, ease to buy, etc). WEEKLY

NPS® - NET PROMOTER SCORE®

Management

Information on customer satisfaction and loyalty using NPS® methodology,


compared to the market and to direct competitors.
DAILY

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INTRODUCTION | TAILORED REPORTS TABLE OF CONTENTS

STRATEGIC OBJECTIVE

OVERVIEW FOR ONLINE STORE MANAGEMENT

Management Marketing Customer service

Essential information on the store's performance.


It contains scores attributed in the research at the moment of purchase
and post-sales, orders delivered within and out of the deadline, daily,
30 and 90-day NPS®, client appraisal on purchase aspects (price, delivery, DAILY
customer service etc); client profile, comments by consumers, among others.

PURCHASING BEHAVIOR OF CONSUMERS

Marketing

Information on customers’ purchasing process, with its evolution


1
over the last 12 months. Shopping motivators, omnichannel
behavior, installments, means of payment etc. MONTHLY

COMPETITIVE SHIPPING ANALYSIS

Commercial Marketing

Full report focused on shipping, which shows its impact on sales and other
variables, compared to the market. Distribution of shipping value by price 1
ranges, average promised deadline in business days for each shipping range,
MONTHLY
average ticket by installments etc.

ANALYSIS OF THE USE OF MEANS OF PAYMENT IN E-COMMERCE

Commercial Marketing

Analyses of means of payments in online purchases.


Financial volume by means of payment, by flags, by issuing bank, 3
by State, by consumer profile (gender, age, income, education),
QUARTERLY
by device (e-commerce x m-commerce), and by category.

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INTRODUCTION | TAILORED REPORTS TABLE OF CONTENTS

RELATIONSHIP WITH THE FINANCIAL MARKET

Commercial Marketing

• Presence of Ebit e-commerce specialists


at meetings, lectures, and events held by your company
• Invite your clients, partners, and investors to
1
pre-launching events of WebShoppers reports at Ebit
• Monthly access to the most important MONTHLY
financial and metric e-commerce information
• Anticipated access to forecast of growth estimates (2 years) – December.

EXECUTIVE PRESENTATION BY EBIT SPECIALISTS

Executives

Executive presentation by Ebit e-commerce specialists


with a detailed analysis of the online store's comparative performance 1
report x competing market, together with market insights
MONTHLY
in the period and specific recommendations.

TAILORED REPORTS
Is any data or information which you
need and not listed here?
We can tailor it for you.

Contact comercial@ebit.com.br
and let's talk about it!

10
INTRODUCTION | EXECUTIVE SUMMARY TABLE OF CONTENTS

EXECUTIVE SUMMARY
T the current economic and
political moment in Bra-
zil has posed several obsta-
increased substantially, espe-
cially in 2015, thus generating
several obstacles and a lack of
ges in the Government. The
last two months of the first
half of 2016 signaled a react-
cles to the growth trajectory optimism by retail consumers ion regarding sales recovery,
observed over the last years, in the country. which caused e-commerce
with clear impacts on the pro- market to reach a nominal
ductive activity and on em- Following this unfavorable growth of 5.2% in the period,
ployment levels throughout scenario, Brazilian e-commer- with R$ 19.6 billion in sales.
national territory. After the ce did not show any growth
adoption of a comprehensive in the first months of the year, The main e-commerce high-
tax policy between 2009 and when it started to show some lights of the first half of the year
2014, Brazilian public deficit reaction after a few chan- are outlined on the next page.

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INTRODUCTION | EXECUTIVE SUMMARY TABLE OF CONTENTS

MAJOR HIGHLIGHTS OF BRAZILIAN E-COMMERCE


IN THE FIRST HALF OF 2016

ORDERS MOBILE DEVICES


With increased Sales via mobile devices
unemployment and weaker purchases showed a strong growth over the
by class C, after a slowdown in sales at year, reaching a share of 23% of
the beginning of the year, we registered sales in June/2016.
a drop of 2% in the order volume,
compared to the previous year.

E-COMMERCE
IN SÃO PAULO
AVERAGE TICKET
The actual e-commerce sales in
Driven by the increased the State of São Paulo reached
prices registered by FIPE/Buscapé R$ 3.6 billion in the first quarter
Index, the average ticket spent of 2016, which represents a 7.4%
by Brazilian consumers in drop compared to the R$ 3.9 billion
e-commerce was R$ 403.46 recorded in the same period in 2015.
which represents a nominal
growth of 7% compared
to the first half of 2015.

ONLINE PURCHASING CYCLE

Purchases of products over


the Internet can be better planned,
ACTIVE CONSUMERS
as the consumers can compare
23.1 million online products and prices before closing
consumers performed at least one an order on this channel. According
purchase in the first half of 2016, a to the special Ebit research, people
volume 31% higher than in 2015, took, on average, 16 days to perform
boosted by migration of sales from a purchase, for instance, of a mobile
physical retail to the online channel. phone/smartphone.

12
CHAPTER 1

360º APPRAISAL
OF THE FIRST
HALF OF 2016

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

360º APPRAISAL OF
THE FIRST HALF OF 2016
AMIDST A TROUBLED POLITICAL AND ECONOMIC MOMENT IN BRAZIL,
E-COMMERCE IN THE FIRST HALF OF THE YEAR WAS MARKED BY THE FACT THAT
MANY COMPANIES IN THE SECTOR HAD TO RETHINK THEIR STRATEGIES AND
REVIEW THEIR EXPENSES IN SEARCH FOR SURVIVAL AND GROWTH

I
n addition to the challenges of the macro- the “Good Law”, which ensured a zero PIS/Cofins
economic moment of the country, online re- aliquot for computing and telecom products (In
tail was affected in the first half of 2016 by summary increasing taxes).
increased product prices, as registered by the
FIPE/Buscapé Index (chapter IV), changes in the In this scenario, the solution for companies
ICMS billing model, and also by the downfall if in the sector was to improve online consumer

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

experience both for access via desktop and via


mobile devices, which accounted for a total of
18.8% of the transactions in the period. DEVICES USED
TO PERFORM ONLINE
PURCHASES WERE:
In addition, online retail operations aim at
improving their operational experience in or-
der to attract the highest possible volume of
consumers in the offline channel. In the first
half of 2016, we registered an increase in the
number of active e-consumers in Brazil. This
shows that, in general, consumers have been
in search of advantages in the sector, which
the traditional retail cannot offer.

POPULARIZATION OF SMARTPHONES IN
BRAZIL, ALONG WITH THE NEED TO IMPROVE

18.8% 81.2%
CONVERSION TO VISITS VIA MOBILE DEVICE HAS
FORCED COMPANIES TO OFFER A BETTER USER
EXPERIENCE ON RESPONSIVE WEBSITES AND APPS, of transactions of transactions
were performed via were performed via
THUS DIRECTLY REFLECTING THE GROWTH IN mobile devices computers/laptops
SHARE OF M-COMMERCE SALES.
SOURCE: EBIT INFORMATION
states Pedro Guasti, CEO of Ebit

EVOLUTION OF ACTIVE E-CONSUMERS

25
VAR.
31% 23.1
18.9 IN BRAZIL,
20
17.6 23.1 MILLION

14.1
CONSUMERS

CONSUMERS
(MILLION)

15
PERFORMED
AT LEAST ONE
ONLINE SALE
10
IN THE FIRST HALF
OF 2016,
5 THUS ACCOUNTING
FOR A 31%
INCREASE COMPARED
1ST HALF OF 2013 2014 2015 2016
TO 2015
SOURCE: EBIT INFORMATION – NUMBER OF ACTIVE CONSUMERS, 1ST HALF OF 2016

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

CONSUMER PROFILE IN THE 1ST HALF OF 2016


GENDER WOMAN MEN IN THE FIRST
HALF OF 2016,
THE SHARE OF
1S/2015
50.01% 49.99% WOMEN WAS
HIGHER IN
E-COMMERCE THERE

51.87% 48.13%
WERE 828,655 MORE
1S/2016 WOMEN THAN MEN

AGE GROUP FAMILY INCOME

1S/2015 1S/2016

LESS THAN
R$ 3,000 40,35% 34,70%
1S/
2015 8% 22% 37% 33% 43.1 BETWEEN
R$ 3,001
21,99% 21,97%
8% 23% 37% 32% 42.8
1S/ AND
2016 R$ 5,000

TO BETWEEN BETWEEN ABOVE AVERAGE BETWEEN


24 YEARS
OLD
25 AND 34
YEARS OLD
35 AND 49
YEARS OLD
50 YEARS
OLD
AGE
(YEARS OLD)
R$ 5.001
AND
R$ 8.000
15,30% 16,51%
THE AVERAGE AGE OF THE BRAZILIAN CONSUMER IS STILL 43 YEARS OLD.
DUE TO THE INTRODUCTION OF NEW, YOUNGER CONSUMERS
ABOVE
R$ 8.001 15,09% 19,24%
REGION 1S/2015 1S/2016

64.5% 63.8% 7,27% 7,58%


I’D RATHER
SOUTHEAST NOT
ANSWER

SOUTH 13.7% 14.5%


5.174
FAMILY

NORTHEAST 12.9% 12.5% SOUTHERN AND


AVERAGE
INCOME
R$ 4.658 R$
MID-WESTERN
REGIONS HAVE
MID-WEST 6.1% 6.6% GAINED A LARGER
SHARE IN
THE AVERAGE INCOME
OF ONLINE CONSUMERS INCREASED

2.6%
E-COMMERCE BY 11%, BOOSTED BY A WEAKER CLASS C
NORTH 2.8% SALES IN E-COMMERCE PURCHASES

SOURCE: EBIT INFORMATION

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

SHARE OF INCOME RANGES IN E-COMMERCE (ORDER VOLUME)

60%
50.3 49.0 48.5
50% 46.1
43.5
40.9 41.6

40%
39.4 40.2 41.1
37.7 38.6 38.5 37.5
30%

20%
20.8
16.3 17.9
10% 14.5
12.0 12.4 13.0

1S/2013 2S/2013 1S/2014 2S/2014 1S/2015 2S/2015 1S/2016

UP TO R$ 3 THOUSAND FROM R$ 3 THOUSAND TO R$ 8 THOUSAND OVER R$ 8 THOUSAND


SOURCE: EBIT INFORMATION

Online stores are still reducing their free unemployment and additional discounts for
shipping policy and e-consumers started to payments in one installment. In the first semes-
choose cash payment or payment in up to three ter of 2016, 42% of online purchases were per-
installments, due to high interest rates, risk of formed with free shipping.

E-COMMERCE IS
FREE SHIPPING
MATURING AND FREE
SHIPPING NO LONGER
50% NEEDS TO BE USED AS
43 44
40 40 40
42 THE ONLY STRATEGY
40% 43 43 TO STIMULATE
PURCHASES.
30% 33 FROM NOW ON,
27 FREIGHT SHALL
26
20% SINCE JULY/2014 BE DYNAMICALLY
E-COMMERCE HAS DECREASED 19
THE PERCENTAGE OF OFFERED TO
10% FREE SHIPPING, MOSTLY CONSUMERS
BIG RETAILERS. ACCORDING TO THEIR
1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 NEED OR URGENCY.
TOP 10 GENERAL MARKET
highlights André Ricardo Dias,
SOURCE: EBIT INFORMATION
COO of Ebit

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

MAIN PAYMENT METHOD

4-12 INSTALLMENTS
CASH 2-3 INSTALLMENTS
OR MORE
HIGHLIGHTS

1S/
2015 39.6% 24.6% 35.8%
As SELIC rate
and inflation
remain high, stores

42.0% 25.1% 33.0%


have chosen to offer
1S/ shorter installment
2016 deadlines with interests.

SOURCE: EBIT INFORMATION

Higher incentive to pay


AVERAGE INSTALLMENTS in cash (with bank slip)
(NUMBER OF INSTALLMENTS)
or in up to three installments.

INSTALLMENTS:
2.5 2.4
IN 2016, ONLINE
installments installments Websites have limited
CONSUMERS payments to a maximum
HAVE CHOSEN TO of ten installments.
PURCHASE LESS WITH 1S/2015 1S/2016
INSTALLMENTS. SOURCE: EBIT INFORMATION
SOURCE: EBIT INFORMATION

With the worsening crisis, the first half cash payment. On the other hand, in the first
of 2016 registered a slight change in the pay- six months of 2016, 42% have decided to pay
ment forms on online purchase: in the same their purchases in only one installment, also
period of 2015, 39.6% of consumers preferred benefiting from discounts offered by stores.

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

FINANCIAL DATA:
ORDERS, SALES, AND AVERAGE TICKET
E -commerce sales in Bra-
zil in 2016 kept rising
and started to grow again.
lected, e-commerce sales
were R$ 19.6 billion in the
first half of the year. This
nal growth of 5.2% com-
pared to the same period in
2015, when a total of R$ 18.6
According to the datacol- number represents a nomi- billion were sold.

EVEN WITH THE


ONLINE SALES (CONSUMER GOODS) IN BILLION OF BRAZILIAN REAIS
SLOWER GROWTH IN THIS
SEMESTER, E-COMMERCE
25 100%
ADVANCES AT MUCH
HIGHER RATES THAN OTHER 90%

SECTORS OF THE ECONOMY. 20 19.6 80%


18.6
THIS RHYTHM WON'T 70%
16.1
STOP BECAUSE MORE
R$ BILLION

15 60%
AND MORE BRAZILIANS
12.7
WILL UNDERSTAND THAT 50%
10.2
PERFORMING A MORE 10 40%
8.4 31.1%
CONSCIOUS PURCHASE 25.9% 30%
IS POSSIBLE OVER THE
5 27.5% 16.0% 20%
INTERNET, AS WELL AS 13.5%
SAVING WITH AN EASIER 5.2% 10%

PRICE COMPARISON.
1S/11 1S/12 1S/13 1S/14 1S/15 1S/16

FINANCIAL VARIATION
explains Sandoval Martins,
SOURCE: EBIT INFORMATION
CEO of Buscapé Company

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

EVOLUTION OF THE AVERAGE TICKET OVER THE 1ST SIX MONTHS

THE MAIN
450 50%
FACTORS DRIVING 403.5
GROWTH IN 400 376.6 40%
353.4
E-COMMERCE 350 334.1 333.4
30%
309.5
SALES WERE 300

INCREASED 250
13%
20%
R$

AVERAGE TICKET, 7% 7% 10%


200
HIGHER SHARE -5% 0%
OF CLASSES AB, 150 -7% -7%

AND CONTINUED 100 -10%

SALES OF PRODUCT 50 -20%

CATEGORIES WITH
HIGHER VALUE
1S/11 1S/12 1S/13 1S/14 1S/15 1S/16

AVERAGE TICKET VARIATION

SOURCE: EBIT INFORMATION

The main factors driving


NUMBER OF ORDERS IN E-COMMERCE
growth in Brazilian e-commer-
ce sales were the increased
60 70%
average ticket, boosted by
the increased prices of 49.4
60%
50 48.2 48.5
products sold in the sec- 50%
tor, as registered by the 40.4%
FIPE/Buscapé Index; high- 40 35.5% 40%
35.5
MILLION

er share of classes AB; and 30%


29.6
continued sales of higher 30 20.1%
25.0 20%
value product categories,
18.4%
such as Household Appli- 20
2.5%
10%

ances and Telephony/Mo- -1.8%


0%
bile phones. 10
-10%

We registered a 7% in-
1S/11 1S/12 1S/13 1S/14 1S/15 1S/16
crease in the average ticket
TRANSACTIONAL VARIATION
of online consumers in the
SOURCE: EBIT INFORMATION
first half of 2016.

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

MOST SOLD CATEGORIES: IN VOLUME OF ORDERS

HIGHLIGHTS

14% 13% 12% 12% 9%


BOOKS / HOUSEHOLD FASHION & HEALTH / TELEPHONY /
SUBSCRIPTIONS / APPLIANCES ACCESSORIES COSMETICS MOBILE
BOOKLETS & PERFUMERY PHONES
Despite the 4% fall in
volume of orders, the
category Household
Appliances kept its
leadership position in
e-commerce sales.

9% 6% 5% 4% 2%
HOUSE COMPUTING ELECTRONIC SPORTS TOYS &
& DECOR DEVICES & LEISURE GAMES

SOURCE: EBIT INFORMATION – 1ST HALF OF 2016


In the second position
is Telephony/Mobile
phones with a 19%
increase compared to
MOST SOLD CATEGORIES: IN SALES
2015, mainly strengthened
by the increase in average
price spent by consumers,
since there was
a 16% drop in volume
of orders compared to
the first half of 2015.

24% 20% 12% 10% 7%


HOUSEHOLD TELEPHONY / ELECTRONIC COMPUTING HOUSE
APPLIANCES MOBILE PHONES DEVICES & DECOR

The category
Automotive Accessories
reached 3% of share in
Brazilian e-commerce
5% 5% 4% 3% 3% sales, with a 75% increase
compared to the
FASHION & HEALTH / BOOKS / SPORTS AUTOMOTIVE
ACCESSORIES COSMETICS SUBSCRIPTIONS / & LEISURE ACCESSORIES previous year.
& PERFUMERY BOOKLETS

SOURCE: EBIT INFORMATION


SOURCE: EBIT INFORMATION – 1ST HALF OF 2016

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CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

DELIVERY AND SATISFACTION:


NPS® AND DELIVERY DEADLINE
O ne of the major highlights of e-commerce
in 2015 was certainly related to the quali-
ty of services provided by online retailers. Ebit
% DELAYED
DELIVERY 8.6% 7.7%
registered a drop in volume of delayed AVERAGE
deliveries, reaching a percentage of only 7.7%. DEADLINE 9.2 9.5
ADVERTISED DAYS DAYS

1S/2015 1S/2016
However, we identified that the average
SOURCE: EBIT INFORMATION
deadline advertised by the stores increased in
the first half of 2016, compared to the same
period last year, to ensure delivery within the ber on, there was a considerable drop in NPS®,
promised deadline. to 59.7% with increased delayed deliveries in
e-commerce due to the large volume of sales
Net Promoter Score® (NPS®), trademark of of Black Friday.
Bain & Company, is an indicator that measures
client satisfaction and loyalty. From January 2016 onwards, the indica-
tor showed improvement, although it still
Since 2013, when Ebit started to perform remained 1.9 percentage point lower than
this measurement, the best result was in July what was registered in July 2015 when clos-
2015, with 66.3%, showing stability over the ing the period comprising the last 12 months
subsequent months. However, from Decem- (in June 2016).

NET PROMOTER SCORE® - NPS® (%)


66.3 65.6 65.0 65.4 65.9 64.0 64.5 64.4
70%
59.7 59.7 61.2 61.6
60%

JUL15 AUG15 SEPT15 OCT15 NOV15 DEC15 JAN16 FEB16 MAR16 APR16 MAY16 JUN16
SOURCE: EBIT INFORMATION

DELAYED DELIVERY (%)


8.5 7.3 7.8 8.1 7.3 8.0 7.8
10% 5.9 5.7 5.8 5.7 6.0
5%

JUL15 AUG15 SEPT15 OCT15 NOV15 DEC15 JAN16 FEB16 MAR16 APR16 MAY16 JUN16
SOURCE: EBIT INFORMATION

22
CHAPTER 1 | 360º APPRAISAL OF THE FIRST HALF OF 2016 TABLE OF CONTENTS

PROJECTION FOR 2016


A fter a nominal growth
of 5.2% in the first half
of 2016, Ebit projects that
SALES GROWTH ESTIMATE IN 2016

50 120%
44.6
growth in e-commerce sa- 41.3 100%
R$ BILLION 40
35.8
les will remain at 8% in 80%
30 28.8
2016, reaching a total of 22.5 60%
18.7
44.6 billion in sales. 20
26% 28% 24% 40%
20% 15%
10 8% 20%
Although sales in the first 0%
2011 2012 2013 2014 2015 2016
half of 2016 have shown a
2% drop in volume of orders, FINANCIAL VARIATION

SOURCE: EBIT INFORMATION


Ebit estimates that, as the
optimism of consumers has
improved due to changes ORDER VOLUME ESTIMATE IN 2016
in Brazilian politics, as well
120 120%
as a second half strength- 103.4
106.5 106.5
100 88.3 100%
ened by Black Friday and
VOLUME

80 80%
Christmas, the sector shall 66.7
60 53.7 60%
have a slight recovery. Thus, 34% 32%
40 25% 40%
by the end of the year, the 17%
20 3% 20%
0%
total volume of orders might 0%
2011 2012 2013 2014 2015 2016
reach 106.5 million, a num-
ber close to the one shown ORDERS VARIATION

SOURCE: EBIT INFORMATION


throughout 2015.

Without increase in sa- AVERAGE TICKET ESTIMATE IN 2016


les, growth in billing shall
be supported by the in- 450 418 30%
388
349 338 327 347
BRAZILIAN REAIS

crease in average ticket, 350 12% 20%


6% 8%
which shall reach an average 10%
R$

250
value of R$ 418 this year. -3% -3%
-6% 0%
150
-10%
50

2011 2012 2013 2014 2015 2016

2016 AVERAGE TICKET VARIATION

SOURCE: EBIT INFORMATION

23
CHAPTER 2

ONLINE
PURCHASING
CYCLE

24
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

1 IDENTIFY A
DESIRE, NEED,
1 OR PROBLEM

PEOPLE'S 2 SEARCH FOR


THE PRODUCT
5 NATURAL 2
PURCHASING 3 ASSESS
CYCLE ALTERNATIVES

4 PURCHASE
THE PRODUCT

4 3 5 APPRAISAL

THE IMPORTANCE OF THE


CATEGORY TELEPHONY/MOBILE
PHONES IN E-COMMERCE
I
t has become increasingly The purchasing cycle to search for the desired
important for e-commer- starts when the consumer product or service, and might
ce companies to un- identifies that they need be influenced by a huge
derstand consumers and something or have a amount of ads and publicity
their purchasing habits, problem that requires acquir- with the most diverse formats
in order to create more ing a new product or service. until they make their decision.
effective sales and client Some consumers are more
loyalty strategies. When impetuous while others like After surveying the op-
performing a purchase over to think carefully about the tions, consumers then start
the Internet or even in tradi- real need to acquire some to analyze several features
tional retail, people usually merchandise. From this mo- such as quality, durabili-
go through a natural pur- ment on, the consumer who ty, brand, and above all,
chasing cycle before acquir- is currently more aware product price – this is one of
ing a product or a service. and wellinformed starts the main purchase-decision

25
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

factors. After making their used to having smartphones estimates that approxima-
decision, having weighed for personal and professional tely 3.98 million smart-
up all benefits as well use several times a day, this phones were sold in the
as negative points, con- category reached the sec- Brazilian e-commerce. This
sumers decide to buy the ond position in e-commerce high sales volume makes
product with the best sales in Brazil, with an aver- Brazil a large market for
cost-benefit ratio. age price of R$ 867 in the manufacturers and Telecom
first half of 2016. In the first operators, whose mission is
In this scenario, the six months of 2016 alone, Ebit to broaden the installed 3G
question posed by many and 4G base over the next
companies in the sector is: years. By crossing check-
"What is the process and ing information obtained by
time to purchase a product PNAD survey with data from
in different categories by Teleco/Anatel, Ebit estimates
e-commerce websites?" there are approximately
100 million users who have
We know that the cate- some type of mobile phone
gory Telephony and Mobile with Internet connection.
phones has been gaining rel-
evance with online practices An article in portal Ex-
over the last years, with in- ame.com in 2015 estimat-
creasing share in the nation- ed that Brazilians like to ex-
al e-commerce market. In change mobile phones, on
THE INTERNET
2013, this category occupied average, every year and one
HAS SIGNIFICANTLY
the sixth position in volume month, thus generating a po-
CHANGED THE
of orders, with a 6% share of tential market/year of 100
WAY HOW
sales; in 2014, it rose to the million new devices in Brazil.
PEOPE ACQUIRE
fourth position with 8% of
A PRODUCT OR SERVICE
share in online purchases. In The increasing use of
AS THE RULE IS
2015, the category rose again, smartphones and mobile
NO LONGER HOW
reaching the third position in phones has been largely de-
TO FIND YOUR CLIENTS
the ranking of most sold cate- bated and displayed in the
BUT HOW TO BE FOUND
gories in the Brazilian e-com- last Ebit Webshoppers re-
BY THEM IN A NON-
merce, with a total of 11% of ports. The share of online
INVASIVE MANNER AND
sales in volume of orders. purchases via mobile devices,
WITH CREDIBILITY.
which was practically non-exis-
Having increasingly be- says André Ricardo Dias, tent in June 2011 (0.3%), has risen
come an object of desire and COO of Ebit to 23% in five years, a 6,300%
a need for Brazilians, who growth over the period.

26
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

If we compare the current


E-COMMERCE SHARE (ORDERS %)*
share mobile devices have in
purchases of other, more ma-
25% 23% ture markets, we might un-
derstand that although we
20%
have 23% in Brazil, we still
15% have much to grow. On the
10.1% last Black Friday in the United
10%
7% States, in November 2015, IBM
estimated that 36% of the total
5% 3.6%
0.3% 1.3% e-commerce sales were per-
0% formed over mobile devices and
JUN/11 JUN/12 JUN/13 JUN/14 JUN/15 JUN/16
57% of circulation in the stores
SOURCE: EBIT INFORMATION
came from these devices.

ANALYSIS OF THE PURCHASING


CYCLE IN THE CATEGORY
MOBILE PHONE/SMARTPHONE
T o better understand smartphone
commercialization opportunities for onli-
ne stores, manufacturers, and other markets,
le phone/Smartphone, Air Conditioner, TV sets,
Women's Fashion/Accessories, Men's Fashion/
Accessories, Sports & Leisure, Perfume, Refrige-
Ebit carried out an online survey between rator/Freezer, Washing Machine, Stove, Games,
June 03 and July 11 2016 using its e-consumer Car Tires, Printer, Laptop, Wine, Coffee Machine,
panel, collecting a sample of 7,809 e-consu- Water Purifier, Microwaves, and Beer.
mers throughout national territory.
The survey pointed out that Mobi-
In this survey, we asked interviewees which le phone/Smartphone was the most cho-
products they had purchased recently over the sen option, with 26% of consumer pre-
Internet (last three months). It was possible to ference, followed by Women's Fashion/
choose up to three out of the 19 previously de- Accessories (19%), Men's Fashion/Accessories
fined product subcategories, which were: Mobi- (15%), Perfume (12%), and Sports & Leisure (11%).

27
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

PURCHASING CYCLE SURVEY: MOST BOUGHT PRODUCTS ONLINE RECENTLY (%)*

MOBILE PHONE / SMARTPHONE 26


WOMEN'S FASHION / ACCESSORIES 19
MEN'S FASHION / ACCESSORIES 15
PERFUME 12
SPORTS & LEISURE 11
TV SETS 7
GAMES 6
CAR TIRES 5
WINE 5
LAPTOP 5
BEER 4
REFRIGERATOR / FREEZER 4
WASHING MACHINE 4
PRINTER 3
STOVE 3
AIR CONDITIONER 3
COFFEE MACHINE 3
MICROWAVE 2
WATER PURIFIER 2
NONE OF THE LISTED PRODUCTS 31

0% 5% 10% 15% 20% 25% 30% 35%


SOURCE: EBIT INFORMATION BASE: 7,809 PERIOD: JUNE 03 TO JULY 11/2016

ONLINE CONSUMER PROFILE:


MOBILE PHONE/SMARTPHONE
T he survey pointed out
that most consumers
in this category are men
PURCHASING CYCLE RESEARCH: PURCHASING BEHAVIOR
OF MOBILE PHONES/SMARTPHONES: GENDER*

(68%), due to the interest and


What is your gender?
68% MAN 32% WOMAN
technological affinity usually
shown by this public. Overall,
considering all e-commerce
sales there is a technical tie
SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016
between men and women.

28
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

PEOPLE WHO ARE, ON


PURCHASING CYCLE SURVEY: PURCHASING BEHAVIOR
OF MOBILE PHONES/SMARTPHONES: AGE*
AVERAGE, 44 YEARS OLD
ARE THE LARGEST BUYERS How old are you?
OF MOBILE PHONES
AND SMARTPHONES
4% 21% 40% 14% 17% 5%
BETWEEN BETWEEN BETWEEN BETWEEN BETWEEN OVER
Regarding age, buyers 18 AND 24 25 AND 34 35 AND 49 50 AND 54 55 AND 64 64 YEARS
YEARS OLD YEARS OLD YEARS OLD YEARS OLD YEARS OLD OLD
in this category are, on av-
erage, 44 years old, and the SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

range between 35 and 49 is


the most representative, with
PURCHASING CYCLE SURVEY: PURCHASING BEHAVIOR
40% of the answers. This OF MOBILE PHONES/SMARTPHONES: EDUCATION*
average is above the mean
What is your level of education?
age of online consumers point-
ed out by Ebit in the first half of
2016, which was 43 years old.
0% 3% 26% 19% 31% 21%
Another piece of inform- PRIMARY ELEMENTARY HIGH INCOMPLETE COMPLETE POST-
ation highlighted by the SCHOOL SCHOOL SCHOOL GRADUATION GRADUATION GRADUATION
COURSE
survey is the balance in
education level among SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

people who said they bought


this category. While 52% of
PURCHASING CYCLE SURVEY: PURCHASING BEHAVIOR
consumers have completed OF MOBILE PHONES/SMARTPHONES: INCOME*
a graduation or post-gradu-
What is your household's monthly family income?
ation course, 47% said they
didn't start or complete any
graduation course.

On the other hand,


regarding purchasing power,
the average family income
stated in the survey,
R$ 5,322, is nearly 10% 3% 26% 28% 18% 12% 8% 6%
higher than the average LESS THAN
R$ 1,000
BETWEEN
R$ 1,000
BETWEEN
R$ 3,001
BETWEEN
R$ 5,001
BETWEEN
R$ 8,001
OVER
R$ 12,000
I'D RATHER
NOT SAY
income of the Brazilian on- AND AND AND AND
R$ 3,000 R$ 5,000 R$ 8,000 R$ 12,000
line consumer in the first half
of 2016, which was R$ 5,174. SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

29
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

PURCHASING BEHAVIOR:
MOBILE PHONE/SMARTPHONE
T he higher the added value of the
acquired product, the higher the need
for researching and searching for the best
ne/smartphone, 57% chose price as the main
decision factor, while 50% chose quality, 23%
chose free shipping, and 22% chose product
cost-benefit ratio, mainly when the product brand as the most important aspect.
belongs to a category that will be part of
the consumer's daily life, which is practi- Therefore, choosing a product might take
cally 24 hours connected a day. longer than people think. The survey indica-
ted that only 15% of consumers immediately
Only 3% of consumers said they did not chose the purchased item, while for 42%, it
research product prices, whereas 53% search- took up to a week to choose the ideal item,
ed for this piece of information only over and over two weeks for another 42%.
the Internet, and 37% used both digital
media and physical stores for that purpose.
The use of mobile devices positively helps
BUSCAPÉ’S APP IS PART OF
with this challenge. One of the leaders in
CONSUMER BEHAVIOR HABITS, AS IT
launching apps was Buscapé, with over
MAKES THIS ROUTINE MORE PRACTICAL
8 million downloads, which represents an
AND PROVIDES A DIFFERENTIAL
extreme change in the behavior of consumers,
EXPERIENCE ANYWHERE CONSUMERS
who usually use this resource over the weekend
GO BY TURNING THE COMPARISON OF
at shopping centers and street stores.
PRICES AND PRODUCTS ON THE BEST
E-COMMERCE STORES IN BRAZIL
Through another question, we under-
A SIMPLE PROCESS.
stood the relevance of the main attributes
that directly influence the purchase-decision says Fábio Sakae,
making process. When buying a mobile pho- Marketing Director of Buscapé

30
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

PURCHASING CYCLE RESEARCH: PURCHASING BEHAVIOR OF MOBILE PHONES/SMARTPHONES:


KEY FACTORS THAT INDUCE PURCHASE*

When you think of buying a new product, what are the main features you consider the most?

PRICE

60%
QUALITY

57%
50%
50%
40%

FREE
30% SHIPPING BRAND
PAYMENT
CONDITION
20% 23% 22% DELIVERY ADDED
DEADLINE VALUE
17% INNOVATION IMMEDIATE
DELIVERY
10%
10% 10%
0%
6% 5%
SOURCE: EBIT INFORMATION BASE: 2,024 PERIOD: JUNE 03 TO JULY 11/2016

PURCHASING CYCLE SURVEY: PURCHASING BEHAVIOR OF MOBILE PHONES/SMARTPHONES:


PURCHASING SURVEY AND DECISION TIME*

Before performing this purchase, did you On average, how long did it take for
research prices at stores or over the Internet? you to decide to buy the product?

3% 53% UP TO 1 WEEK 42
I DIDN’T I RESEARCHED
RESEARCH ON THE 1 MONTH 18
INTERNET

2 WEEKS 15

OVER 1 MONTH 13 ON AVERAGE, IT TOOK


16 DAYS FOR PEOPLE

7% 37%
TO DECIDE TO BUY THE
IMMEDIATELY 11 MOBILE PHONE/
I RESEARCHED I RESEARCHED SMARTPHONE
AT PHYSICAL
STORES
AT PHYSICAL I DON'T KNOW / 2
STORES AND DON'T REMEMBER
ON THE INTERNET 0% 10% 20% 30% 40% 50%

SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

31
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

PURCHASING FREQUENCY OF
MOBILE PHONE/SMARTPHONE
T he study also point-
ed out the purchasing
frequency of this product
are frequently launched,
and also due to “early
adopters" and fanatics,
THE GREAT MAJORITY
ANSWERED THAT
by consumers on online who always acquire newly- THEY BOUGHT THEIR
stores in Brazil. We see launched products. The MOBILE DEVICES
that 6% purchase this item great majority answered
ANNUALLY (34%)
every six months, which is that they bought their mo-
typical of technological cat- bile devices annually (34%) OR EVERY
egories, as new products or every two years (31%). TWO YEARS (31%)

PURCHASING CYCLE SURVEY: PURCHASE FREQUENCY: MOBILE PHONE/SMARTPHONE*

How often do you usually buy it?


40%

34%
31%
30%

20%

10%
10%
6% 6%
3% 4% 3% 2% 1% 1%
0%
EVERY EVERY EVERY EVERY EVERY EVERY EVERY EVERY EVERY MORE FIRST
MONTH THREE SIX YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS THAN TIME I
MONTHS MONTHS 6 YEARS BOUGHT

SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

32
CHAPTER 2 | ONLINE PURCHASING CYCLE TABLE OF CONTENTS

RELATIONSHIP BRAND x PRICE


IN DECIDING TO PURCHASE A
MOBILE PHONE/SMARTPHONE
A s to the purchasing decision of products in
this category, 48% of consumers chose to
acquire another brand with lower price, 34%
Brazilian online consumers. The winner in
this category is Apple, as 63% of the inter-
viewees who bought a product of this brand
were faithful to their usual choice and 13% cho- said they did not research any products from
se, along with their preferred brand, products a competing brand.
with higher value. Regarding brands preferred
by online consumers, the survey indicated Sam-
sung as the leader, with 41%, followed by Moto- Ebit commercializes this type
of thorough study on other
rola, in second with 18%, LG in third with 10%,
19 product categories and
Apple in 4th with 4th (8%), Asus in 5th (5%) and subcategories. Your company
Microsoft/Nokia in 6th with 5% of the answers. can engage this study requesting
further information by email:
The survey also pointed out which of comercial@ebit.com.br
them have higher loyalty and preference by

PURCHASING CYCLE RESEARCH: PREFERRED BRAND BY E-CONSUMERS*

Did you research another brand before purchasing? If so, did you by the more inexpensive or the more expensive brand?

SAMSUNG 46 38 11 4

MOTOROLA 47 31 16 6

LG 55 23 18 5

APPLE 16 63 20 2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

I BOUGHT THE MORE INEXPENSIVE BRAND I DIDN'T RESEARCH ANOTHER BRAND I BOUGHT THE MOST EXPENSIVE BRAND DON'T KNOW / I DON'T REMEMBER

SOURCE: EBIT INFORMATION BASE: 2,025 PERIOD: JUNE 03 TO JULY 11/2016

*IN QUESTIONS THAT USE SELECTION BOXES, THE TOTAL NUMBER OF ANSWERS MIGHT BE HIGHER THAN THE NUMBERS OF
INTERVIEWEES. THIS MIGHT CAUSE THE TOTAL PERCENTAGES OF THE ANSWER TO EXCEED 100%.

33
CHAPTER 3

THE ECONOMIC
AND POLITICAL
CRISIS,
according to FecomercioSP

34
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

THE ECONOMIC AND


POLITICAL CRISIS,
ACCORDING TO FECOMERCIOSP

B
razil is probably experiencing the great- projections by the Federation of Goods, Services,
est crisis of its history. GDP (Gross Domes- and Tourism of the State of São Paulo – Fecomer-
tic Product) shall decrease approximately cioSP. Consequently, unemployment rate has
3.5% in 2016, after having registered a 3.8% drop exceeded 11%. Over 100 thousand formal job
last year. It will be the first time since the 1930's vacancies have been eliminated per month in
that the Brazilian economy registers a retraction our country. In the trade in goods and services
for two consecutive years. The per capita income of the State of São Paulo, over 260 thousand job
shall drop for the third consecutive year and re- positions have already been extinguished in one
tail sales in São Paulo, which dropped 3% in 2014 year, according to the survey conducted by the
and 6% in 2015, shall remain unchanged in 2016 federation based on data of the General Regis-
in an optimistic scenario, according to data and try of Employed and Unemployed – CAGED.

35
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

Despite the declining economic activi-


ty and the consequent increased unemploy-
ment, inflation remains high – although the
latest data have indicated a slowdown – and
interests are also high; banks are not willing
to lend; companies are postponing or cutting
down investments, while families, who work
more and more on a tight budget, are cutting
expenses and avoiding to take on debts.

The characteristics of the current re-


cession, however, are quite different from DESPITE THE DEPRESSION
conventional recessions, which usually oc- IN THE ECONOMIC ACTIVITY
cur within economic cycles, resulting, for AND THE CONSEQUENT INCREASE
instance, from periods of euphoria and
excessive investments or as a reflection of
IN UNEMPLOYMENT, INFLATION
external shocks. The Brazilian crisis is above REMAINS HIGH – ALTHOUGH
all a confidence crisis. Evidence of that is THE LAST DATA HAVE
the pessimism of executives and consumers, INDICATED A SLOWDOWN –
indicated in confidence indicators calculated by
FecomercioSP, which have reached the lowest
AND INTERESTS ARE ALSO HIGH
levels in history throughout 2015 and 2016.

It is difficult to pinpoint the exact begin- actions have made investors lose confidence.
ning of a crisis, which typically results of a Despite the decrease in revenue deriving from
combination of factors; however, the fact is a weaker economic activity, the Government
that incorrect interventions performed by continued to expand costs, which resulted in
the Government from 2012 on have under- deficit in government accounts in 2014 and
mined key sectors such as the energy sec- 2015. The country ended up having its invest-
tor, while subsidies to specific groups have ment grade lowered by the main international
resulted in market concentration and inef- risk assessment agencies.
ficiency. Structural problems, such as in-
creased Social Security expenses, have been While the crisis worsened, the Govern-
left aside throughout the last decade, some- ment didn't seem confident in the diagnosis
what overcast by a favorable international shown by the main Brazilian executives and
scenario for Brazil. economists, and did not submit proposals or
show any ability for political articulation to
However, the international situation overcome the problem. Thus, it lost popula-
has changed. Misguided governmental tion and Congress support.

36
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

THE CRISIS AND RETAIL IN SÃO PAULO


R etail sales in São Paulo
have been falling since
2014 after nearly a decade
The insistence in an
economic policy that favored
increased consumption, credit,
and in civil construction, rea-
ched the sector of commerce
and services, the main em-
of continuous growth. This and government expenses re- ployer in Brazil. After all, with
year, the sector suffered sulted in a scenario with high decreased sales, increased
a negative impact by inflation, and unbalance in pu- costs, and in face of an
increased interests, decreased blic and external accounts. Af- increasingly disruptive political
credit offer, and the increa- ter the election results, the Se- scenario, executives nee-
sing distrust of consumers lic rate was high again. Public ded to improve efficiency,
due to the uncertainty that tariff realignment, particularly cut costs, and readjust their
started to take over the for electric energy, hit consu- staff to a lower demand. All
scenario and to the need mers' pockets hard. Unem- factors started to retro-feed each
for adjustments in economy ployment, which had already other, in a truly vicious circle.
that began to take shape. been rising in the industry
With the crisis and a
tighter budget, consumers
ACTUAL RETAIL SALES IN SÃO PAULO became more conservative,
(IN R$ BILLION, ACCORDING TO PRICES IN MAR/16)
reducing consumption, and
2008 493.9
avoiding to take on debts and
favoring the acquisition of es-
2009 503.4 sential goods and services.
Thus, the highest sales drops
2010 557.2
were observed in non-durable
2011 593.1
and semi-durable goods.

2012 595.2 The downswing in retail


sales was mitigated by the
2013 620.2
positive performance of the
2014 602.7 -2.8%
Supermarket, Drugstore, and
Perfumery sectors, which re-
2015 564.6 -6.3% gistered an increase becau-
12M até
se of the essential nature of
562.3 -6.0%
mar/16 the goods marketed by them,
whose price increase is limited
450

475

500

525

550

575

600

625

650

650

less than proportionally to the


SOURCE: FECOMERCIOSP, SÃO PAULO STATE TREASURY OFFICE (SEFAZ)
demand for them.

37
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

E-COMMERCE IN
SÃO PAULO
(FECOMERCIOSP/EBIT SURVEY)

F rom 2015 on, with the launching of the


E-commerce Conjunctural Research (PCCE),
FecomercioSP, in partnership with Ebit, start-
for surveying unprecedented information on
commerce in São Paulo and for elaborating,
for instance, comparisons between the volume
ed to systematically investigate the behavior of negotiated in e-commerce and monthly sales of
sales performed over the Internet, the so-called physical stores in the State of São Paulo, divided
e-commerce. This was due to the acknowledg- in the 16 regions defined by the Regional Tax
ment of the increasing and undeniable relevance Offices of the São Paulo State Treasury Office
this segment has been gaining in the Brazilian (Sefaz). This enabled knowledge of the e-commerce
retail in general and in São Paulo, particularly. share in retail sales in each one of these regions, as
well as the indicator behavior over time.
The process of monthly monitoring
e-commerce required the elaboration of an In addition, in the exclusive context of
exclusive methodology, which, in turn, allowed e-commerce, unprecedented monthly data start-
ed to be provided on number of orders, average
ticket, and the actual sales variation in this segment.

It is thus another important source


ENABLED THE of information for the monitoring of the
situation of commerce in a segment of in-
KNOWLEDGE OF E-COMMERCE
creasing importance in the economy, which
SHARE IN RETAIL SALES, AS can be a valuable instrument for executives
WELL AS THE INDICATOR to define their strategies and also a guidance
BEHAVIOR OVER TIME element for public policies directed to safety
and improvement of transactions performed
in the world of e-commerce.

38
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

HIGHLIGHTS OF
THE 1ST QUARTER OF 2016
A ctual e-commerce sales
in the State of São Pau-
lo reached R$ 3.6 billion in
interests, the lowest cred-
it offer for consumption, in-
creased unemployment, and
fore, e-commerce share in
retail sales in SãoPaulo,
which was 2.9% in the first
the first half of 2016, which consumers' unwillingness to quarter of 2013, 3.6% in the
represents a 7.4% fall compared take out loans. first quarter of 2014, and
to the R$ 3.9 billion registered 3.6% in the first quarter of
in the same period of 2015. While e-commerce in São 2015, dropped to 3.3% in the
Paulo registered a 7.4% fall in first quarter of this year.
In the first quarter of actual sales in the first quar-
2015, e-commerce sales in ter of this year, retail in the In other words, techno-
São Paulo had registered State of São Paulo (which logical advances and chang-
an increase of only 0.9%, includes physical and online es in consumer habits were
after an expressive growth stores) showed a smaller de- capable of minimizing the
of 27.5% observed between crease, of 1.7%. When the sec- effects of the crisis on this
2013 and 2014. Similar to re- tors Vehicle Dealerships, Car sector, which had been
tail in São Paulo as a whole, Parts & Accessories, and Con- growing at a two-figure rate
e-commerce has also suf- struction Materials are con- since 2014. The retraction of
fered with the high inflation, sidered, the (restricted) retail e-commerce sales can also
which undermines consumers' result over the period be- be explained by the fact that
purchasing power, high comes positive, 0.9%. There- many of the activities that

ACTUAL E-COMMERCE SALES IN THE STATE


OF SÃO PAULO (R$ MILLION¹)
THE ACTUAL
4.000
E-COMMERCE SALES
3.852 0.9% 3.886
-7.4% 3.599
IN THE STATE OF SÃO
27.5%
3.500
PAULO REACHED
3.000
3.020
R$ 3.6 BILLION
2.500
IN THE FIRST
QUARTER
1Q13 1Q14 1Q15 1Q16 OF 2016
¹ ACCORDING TO PRICES IN MARCH 2016. SOURCE: FECOMERCIOSP, EBIT

39
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

E-COMMERCE SHARE IN RETAIL have been suffering the most


SALES OF THE STATE OF SÃO PAULO¹
with the crisis, such as Cloth-
ing & Shoes and Household
4% 3.6 0.0P.P 3.6 -0.3P.P Appliances & Electronics, are
0.7P.P 3.3
2.9 precisely the ones with high-
3%
er share in e-commerce sales.
2%

While the total retail sales


1%
in São Paulo registered a
1.7% drop in Clothing, Fabric,
1Q13 1Q14 1Q15 1Q16
and Shoe stores in the first
¹ WITH THE AIM OF CREATING AN INDICATOR SIMILAR TO THE NATIONAL ONE ESTIMATED
BY EBIT FOR THE CALCULATION OF SHARE IN RETAIL, THE ACTIVITIES OF VEHICLE DEALERSHIPS, CAR PARTS quarter compared to the
&ACCESSORIES AND CONSTRUCTION MATERIALS WERE NOT CONSIDERED. SOURCE: FECOMERCIOSP, EBIT
same period of 2015, down-
swing was 5.5%; in House-
NUMBER OF ORDERS IN E-COMMERCE hold Appliances, Electronic
OF THE STATE OF SÃO PAULO (THOUSANDS)
and Department stores,
the drop reached 8.1%. Re-
11,190
12,000 traction of retail in the first
33.9% -8.2% three months of the year
11,000
10,267 was mitigated by the good
10,000 -7.2% performance of Drugstores
9,529
& Perfumeries (+10.6%) and
9,000
8,357
Supermarkets (+9%) whose
e-commerce share in sales is
1Q13 1Q14 1Q15 1Q16
still relatively low.
SOURCE: FECOMERCIOSP, EBIT

Monthly performances
ACTUAL AVERAGE TICKET IN E-COMMERCE for actual sales in São Pau-
OF THE STATE OF SÃO PAULO (R$¹)
lo compared to the same
months of 2015 were: -11.2%
400.00 in January, -5.5% in February,
378.50 -0.2% 377.66
and finally, -4.6% in March.
375.00
361.44 10% Therefore, in the first quar-
-4.8%
350.00 344.24 ter of the year, we observed
a 7.4% accumulated retrac-
325.00
tion compared to the three
first months of 2015. Actual
1Q13 1Q14 1Q15 1Q16
fall in e-commerce sales
¹ ACCORDING TO PRICES IN MARCH 2016. SOURCE: FECOMERCIOSP, EBIT
thus continues to accelerate

40
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

after the downswing of 0.6% the average ticket (billing


registered in 2015, which per order) was practically
occurred after the expres- stationary at R$ 378, regis-
sive growth of 18.9% ob- tered over the three first
served in 2014. In 12 months months of last year. In the THE NUMBER
up to March, the actual same period of 2014, however,
e-commerce sales in São the amount was 9.1% lower
OF ORDERS
Paulo had accumulated a (R$ 344). This suggests that IN THE STATE WENT
2.7% drop compared to the 12 with the crisis, e-commerce FROM 10,267 MILLION,
months immediately before. sales have concentrated in IN THE FIRST
higher value items. Moreover,
QUARTER OF 2015,
The number of orders in the unfavorable economic
the State went from 10,267 situation might have stopped TO 9,529 MILLION
million in the first quarter of the migration of lower so- IN THE FIRST
2015 to 9,529 million in the cial strata to this purchase QUARTER OF 2016.
first quarter of 2016. This channel. With the higher THIS REPRESENTS
represents a 7.2% decline, share of richer strata in pur-
very close to the drop ob- chases, the average value
A 7.2% DROP
served in sales. With this, per order continues high.

E-COMMERCE SHARE IN RETAIL SALES IN THE STATE OF SÃO PAULO¹

5.2
4.8

5%
4.1

4% 3.5%
3.3%

2.8%
3%

2%

1%

0%
2013 2014 2015 2016
MAY

MAY

MAY
SEPT

OCT

SEPT

OCT

SEPT

OCT
JAN

FEB

MAR

APR

JUN

JUL

AUG

NOV

DEC

JAN

FEB

MAR

APR

JUN

JUL

AUG

NOV

DEC

JAN

FEB

MAR

APR

JUN

JUL

AUG

NOV

DEC

JAN

FEB

MAR

¹ WITH THE AIM OF CREATING AN INDICATOR SIMILAR TO THE NATIONAL ONE ESTIMATED BY EBIT FOR THE CALCULATION OF SHARE IN RETAIL,
THE ACTIVITIES OF VEHICLE DEALERS, CAR PARTS &ACCESSORIES AND CONSTRUCTION MATERIALS WERE NOT CONSIDERED. SOURCE: FECOMERCIOSP, SEFAZ, EBIT

41
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

APPRAISAL OF REGIONAL DATA


FROM THE STATE OF SÃO PAULO
A mong the 16 regions appraised by PCCE,
considering the accumulated billion in
the first quarter of 2016, only two registered
However, the region accounts for over 40%
of the total orders and for over 36% of actual
e-commerce sales; therefore, the average tick-
a positive variation compared to the same pe- et is naturally lower than in the other locations.
riod in 2015: ABCD (0.4%) and Osasco (1.8%).
On the other hand, the highest falls were ob- In the State of São Paulo, e-commerce
served in the regions of Presidente Prudente share in retail (excluding the sectors Vehicle
(-30.4%), Bauru (-21.6%), and São José do Rio Dealerships, Car parts & Accessories, and Fur-
Preto (19.4%). niture & Decor) was 3.3% in the first quarter,
lower than the 3.6% registered in the same pe-
The average ticket in São Paulo was riod of 2015 and the 3.7% of the last quarter of
R$ 377.66 in the first quarter. The regions that 2015, when the result was influenced by the
registered the highest average tickets were good sales performance of November in the
Marília (R$ 472.97), Taubaté (R$ 470.39), and sector due to Black Friday. In the ABCD region,
Jundiaí (R$ 428.91). At the other end, the capi- share reached 4.5% in the first quarter of 2016.
tal has the lowest average ticket, of R$ 339.71. In the capital, it reached 4.2%.

42
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

REAL E-COMMERCE SALES IN REGIONS OF THE STATE OF SÃO PAULO (R$¹): 1Q16 X 1Q15

OSASCO 1.8
ABCD 0.4
JUNDIAÍ -1.3
CAMPINAS -2.7
SOROCABA -4.1
TAUBATÉ -4.5
CAPITAL -5.8
ESTADO DE SÃO PAULO -7.4
GUARULHOS -10.4
ARARAQUARA -11.4
MARÍLIA -13.3
ARAÇATUBA -15.6
LITORAL -17.0
RIBEIRÃO PRETO -19.3
SÃO JOSÉ DO RIO PRETO -19.4
BAURU -21.6
PRESIDENTE PRUDENTE -30.4

-35% -30% -25% -20% -15% -10% -5% 0% 5%

SOURCE: FECOMERCIOSP, EBIT

REAL E-COMMERCE SALES IN REGIONS OF THE STATE OF SÃO PAULO (R$ MILLION¹): 1Q16

CAPITAL 1,312
CAMPINAS 333
ABCD 260
OSASCO 257
TAUBATÉ 197
GUARULHOS 185
JUNDIAÍ 174
LITORAL 156
RIBEIRÃO PRETO 154
SOROCABA 140
ARARAQUARA 94
BAURU 92
SÃO JOSÉ DO RIO PRETO 79
MARÍLIA 71
ARAÇATUBA 50
PRESIDENTE PRUDENTE 44

R$ MILLION 0 250 500 750 1000 1250 1500

¹ ACCORDING TO PRICES IN MARCH 2016. SOURCE: FECOMERCIOSP, EBIT

43
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

AVERAGE TICKET OF E-COMMERCE IN REGIONS OF THE STATE OF SÃO PAULO (R$¹): 1Q16

MARÍLIA 472.97
TAUBATÉ 470.39
JUNDIAÍ 428.91
ABCD 413.47
CAMPINAS 405.87
RIBEIRÃO PRETO 404.82
LITORAL 400.70
ARAÇATUBA 395.78
BAURU 393.24
OSASCO 386.45
ARARAQUARA 386.40
PRESIDENTE PRUDENTE 379.36
ESTADO DE SÃO PAULO 377.66
RIBEIRÃO PRETO 375.89
GUARULHOS 374.81
SOROCABA 365.32
CAPITAL 339.71

R$ BRAZILIAN REAIS 0 50 100 150 200 250 300 350 400 450 500

¹ ACCORDING TO PRICES IN MARCH 2016. SOURCE: FECOMERCIOSP, EBIT

E-COMMERCE SHARE IN RETAIL SALES OF THE STATE OF SÃO PAULO¹: 1Q16


ABCD 4.5
CAPITAL 4.2
CAMPINAS 3.8
TAUBATÉ 3.8
LITORAL 3.4
ESTADO DE SÃO PAULO 3.3
ARARAQUARA 3.2
MARÍLIA 3.0
GUARULHOS 3.0
ARAÇATUBA 2.9
BAURU 2.9
PRESIDENTE PRUDENTE 2.7
JUNDIAÍ 2.6
RIBEIRÃO PRETO 2.6
SOROCABA 2.4
OSASCO 2.3
SÃO JOSÉ DO RIO PRETO 2.2

0% 1% 2% 3% 4% 5%

¹ WITH THE AIM OF CREATING AN INDICATOR SIMILAR TO THE NATIONAL ONE, ESTIMATED BY EBIT FOR THE CALCULATION OF SHARE IN RETAIL, THE ACTIVITIES OF
VEHICLE DEALERSHIPS, CAR PARTS &ACCESSORIES AND CONSTRUCTION MATERIALS WERE NOT CONSIDERED. SOURCE: FECOMERCIOSP, SEFAZ, EBIT

44
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

7
+ .9%
MAY vs JUN 2016
8
+ .2%
JUN 2015 vs 2016

REGAINING CONFIDENCE
A fter the increase in May,
the Consumer Confi-
dence Index (ICC) surveyed by
month when it was above
100 points.
drop compared to June of last
year, registered a 10.6% in-
crease compared to May and
FecomercioSP started rising As opposed to the previ- reached 52.4 points.
again and reached 98 points ous month, increased confi-
in June, an increase of 7.9% dence wasn’t only a reflec- The increase in IEC seems
compared to May of 2016, tion of renewed hopes. The to symbolize some kind of vote
and of 8.2% compared to Consumer Expectations In- of confidence given by con-
June 2015. This is the first in- dex (IEC) increased again and sumers to the new economic
crease observed when com- reached 128.5 points in June, team, which however has an
paring between a month and a value 7.2% higher than May expiry date. Moreover, because
the same month in the previ- and 26.6% higher than June of the depth and extension of
ous year since January 2013. 2015 – it is the highest growth the crisis and also due to the
In other words, the index of registered since January 2010; fact that the political changing
June interrupted a three-con- therefore, it has reached the process has been troubled, the
secutive-year decrease (more highest level since Febru- expiry date of this vote of confi-
precisely 40 months) in this ary 2014, when it was 132.2 dence is relatively short.
basis of comparison. There- points. The Index of Current
fore, ICC has reached its high- Economic Conditions (ICEA), For consumer confidence
est value since 2015 – the last on its turn, despite its 29.4% to keep growing, it is necessary

45
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

that some kind of economic with which they have been comprise ICF, remained at 35.2
policy is effectively delivered announced seem to have points, the same value of May,
by the Government, such as encouraged consumers. However, the lowest level in the historical
structural reforms, adjust- if this initial momentum is not series. Compared to June 2015,
ments public accounts with confirmed by changes and this value is 37.4% lower. It also
cut in costs – and not with effective approvals, consumers is the item with the lowest
increased taxes –, and the might be discouraged again, score among the seven items
approval of an expenditure thus undermining the expected researched. The decrease in
ceiling in the public sector resumption of consumption. consumption level has directly
and privatizations. reflected in retail sales, which
Improved confidence, have an accumulated fall of
The measures an- however, hasn't influenced 6% over a year in the State of
nounced so far and the speed overall retail sales in the State of São Paulo. There are still no
São Paulo, yet; they registered indications of a recovery of the
a fall on Mother's Day (May) sector in the short term: the
and Valentine's Day (June) – the intention to take on debts is still
two major commerce dates low – despite the slight increase
in the first half of the year. in June – and the analysis
In fact, despite the growth of this moment for durable
in the expectation indicator, items, another component
consumers are still struggling of ICF, repeated the historical
with high inflation, high minimum value in June by
THE HOUSEHOLD interests, and increased reaching 38.2 points, 4.2% lower
CONSUMPTION unemployment, which affect than May and 32.1% lower than
INTENTION (ICF), their financial situation, and June 2015. It is the item with the
CALCULATED consequently, their perception second lowest score among the
of current conditions. seven items researched.
MONTHLY BY Therefore, the household
FECOMERCIOSP, consumption intention Items "current revenue"
HAS RENOVATED (ICF), monthly calculated by and "credit access" also re-
THE MINIMUM FecomercioSP, repeated the peated their minimum values
minimum historical value and in June. The former reached
HISTORICAL VALUE reached 63 points in June, 0.9% 69.6 points – a drop of 4.7%
AND REACHED lower than May and 22.9% compared to May 2016 and of
63 POINTS IN JUNE, lower than June 2015. 28.7% compared to June 2015
A 0.9% FALL – while the latter remained at
The assessment of the 62.3 points – 3.5% lower than
COMPARED TO MAY level of "current consumption", May 2016 and 28.7% lower
one of the seven items that than June 2015.

46
CHAPTER 3 | THE ECONOMIC AND POLITICAL CRISIS, according to FecomercioSP TABLE OF CONTENTS

BETTER PERSPECTIVES
T he perception of consumers regarding
current jobs has reached 87.6 points,
practically the same as May, when it was
in Christmas compared to this date in 2015.
Still facing many uncertainties, consumers
are conservative; however, they tend
87.4 points, but 17.4% lower than June 2015. to gradually return to stores as a less
pessimistic scenario unfolds. Consumers
If the assessment of item "current who only buy indispensable items today
jobs" was practically stable in the monthly tend to resume their more ambitious
comparison, the indicator of "professional plans for consumption when regaining
perspective" increased 1.5% and reached confidence, in face of a less gloomy
97.6 points. With improved "professional scenario. It is expected that from the
perspective", "consumption perspective" second half of the year on, scenario will
also improved: this item reached 50.4 become clearer and measures for the
points, 3.9% higher than May. rationalization of the public sector and
the resumption of investments will reflate
Data aren't as encouraging, yet, since economy after the greatest economic
they generally indicate dissatisfaction of crisis in the history of our country. Thence,
households regarding consumption con- the stakes on a Christmas that symbolizes
ditions. On the other hand, there was a this resumption of retail sales.
visible improvement in perspectives, in
line with ICC data. For expectations to turn
into increased sales, however, consump-
tion conditions must improve effectively,
with price stability, labor market stability, THE END OF THE
and reduced interest rates, which will only YEAR MIGHT BE BETTER
come with an effective tax adjustment
FOR RETAIL THAN
and the announcement of measures to
stimulate private investments. ITS BEGINNING, WITH
BETTER SALES IN
However, if the trend towards CHRISTMAS COMPARED
improving expectations is consolidated,
TO THIS DATE IN 2015
the end of the year might be better for
retail than its beginning, with better sales

47
CHAPTER 4

FIPE/BUSCAPÉ
INDEX
The FIPE/Buscape price index calculation is
under the responsibility of the Economic
Researches Foundation Institute,
represented by Prof. Sergio Crispim

48
CHAPTER 4 | FIPE/BUSCAPÉ INDEX TABLE OF CONTENTS

MONTHLY EVOLUTION OF
THE FIPE/BUSCAPÉ INDEX
T he FIPE/Buscapé Index was
created to monitor prices
in the Brazilian E-commerce
of the sector, and the nature of
the products that are predomi-
nantly sold in this sector, as
er than the 3.73% variation
of the first half of 2015 due to
the lower foreign exchange
and has been published for 65 shown by the graph below. pressure over product prices
months. This period of over five and imported components,
years has been characterized In this first half of 2016, which have a high weight in
by a 45-month price drop, or positive accumulated variation e-commerce. Nevertheless, in
69% of the period, reflecting the of 2.83% of FIPE/Buscapé four of the six first months of
dynamism and competitiveness Index has been slightly low- 2016, there was price increase.

MONTHLY VARIATIONS IN FIPE/BUSCAPÉ PRICE INDEX (%)

4.73
5.0%

4.0%
3.07

2.85
3.0%
2.39

2.23
1.75

2.0%
1.35
1.00
0.90

0.85
0.59

0.40
1.0%
0.28

0.20
0.24

0.14
0.04

0.17

0.17

0.11
0.0%
-0.03

-0.02
-0.01
-0.05

-0.06
-0.19
-0.25

-0.26
-0.28

-0.32
-0.34
-0.34
-0.36

-0.35

-0.35
-0.37
-0.40

-0.38
-0.40

-0.41
-0.42
-0.44

-0.44
-0.52
-0.64

-0.64

-0.67
-0.73
-0.73

-1.0%
-0.74
-0.79

-1.06
-1.18

-1.19

-1.21
-1.22

-1.28

-1.28
-1.42
-1.42

-2.0%
-1.85
-1.91
-2.41

-2.44

-3.0%
-2.85

2011 2012 2013 2014 2015 2016


MAY

MAY

MAY

MAY

MAY

MAY
SEPT
OCT

SEPT
OCT

SEPT
OCT

SEPT
OCT

SEPT
OCT
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN

SOURCE: FIPE/BUSCAPÉ INDEX

49
CHAPTER 4 | FIPE/BUSCAPÉ INDEX TABLE OF CONTENTS

EVOLUTION OF ANNUAL
VARIATIONS AND JUNE/16
C onsidering the 54 annual variations (t/t-12) of
the FIPE/Buscapé Index series, there was price
drop in 38 periods, or 65% of the series, emphasizing
went from a pattern of annual variation of 6.5% to
10.5%, and it also reflects the dollar appreciation,
which has revelead annual variations to sharply rise
that annual variations were positive (inflation) over throughout 2015 and in the first quarter of 2016, but
the last 15 months. The annual variation June 2016/ signals a slow down in the 2nd quarter of 2016: 1st
June 2015, of 8.29%, still characterizes the expressive quarter of 2015/2014 (21.3%), 2nd quarter of 2015/2014
reversal in the FIPE/Buscapé Index trend over the (37.7%), 3rd quarter of 2015/2014 (54.8%), 4th quart-
last 12 months compared to the pattern of annual er of 2015/2014 (50.7%), 1st quarter of 2016/2015
variation of -3%, as shown in the graph below. (34.0%), and 2nd quarter of 2016/2015 (14.1%).

We can observe that in the beginning of the FIPE/ In this context, it is important to emphasize,
Buscapé Index series, annual variation went from that some categories that have significant weight
approximately -10% in 2012 to +8.5% in the first half in e-commerce are particularly influenced by the
of 2016. In other words, annual variation increased dollar appreciation in a significant and lagged
around 21%. This reversal reflects the acceler- manner: Electronic appliances, Computer, Photo-
ation of overall inflation that, measured by IPCA, graphy, and Telephony.

ANNUAL VARIATIONS OF FIPE/BUSCAPÉ INDEX (MONTH Q / MONTH Q-12)

15%
10.78
10.72
9.24
9.01

8.29
6.92

6.69
10% 5.89
4.17
3.54
2.03

5%
1.98
1.37
1.21
0.42

0.26

0.0%
-0.77

-1.31
-1.22

-1.27
-1.36

-1.66

-1.56
-1.48

-1.61
-1.78
-1.99

-1.89
-2.78

-2.48
-2.83

-3.25

-3.51

-5%
-3.62
-3.83
-4.24
-4.59
-4.87
-4.94
-5.22
-6.13
-6.42
-7.02
-7.67

-7.79
-7.89
-8.29

-10%
-8.92
-9.32

-9.25
-9.64
-9.73
-9.81
-9.85

2012 2013 2014 2015 2016


MAY

MAY

MAY

MAY

MAY
SEPT
OCT

SEPT
OCT

SEPT
OCT

SEPT
OCT
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN

SOURCE: FIPE/BUSCAPÉ INDEX

50
CHAPTER 4 | FIPE/BUSCAPÉ INDEX TABLE OF CONTENTS

In the annual period June 2016/June 2015, nine (13.62%). This group was followed by Computer-
out of the ten groups researched had price increas- ing (10.28%) – in which “printer cartridge”
es, and only one drop, with an expressive difference (20.09%), “no break” (15.06%), “printer” (14.87%),
between the groups of products that comprise and “laptop” (14.87%), and “laptop” (11.41%) were
the index, which ranges from a -7.24% drop in the highlights – and Electronics (9.63%) – influ-
Fashion & Accessories to a 11.02% increase in House- enced by “auto sound system” (15.96%), “DVD
hold Appliances, as shown in the graph below. player” (11.85%), and “home theater” (11.81%).

Of the 157 surveyed categories, 142 (90%) Among all products that comprise the in-
have an average price increase of 9.70% and dex, those whose increase outstood in the an-
only 15 (10%) had an average price drop of nual period of June 2016/June 2015, in addition
-1.18%. The only group with annual price drop to the ones previously mentioned, were: “hood/
in May 2016/May 2015 – Fashion & Accessories exhaust” (17.94%), “calculator” (14.47%), “freezer”
(-7.24%) – was quite influenced by “sneakers” (13.47%), “flat iron/straightener” (13.31%), “tent”
(-9.71%). The group with the highest price in- (12.62%), “bicycle”(11.40%), “pan set” (10.89%),
crease was Household Appliances (11.02%) due “sunscreen” (10.26%), and “treadmill” (9.95%). The
mainly to the products “high pressure washer” ones with the highest drop were: “football team
(18.85%), “electric stove” (18.14%), “microwave”, T-shirt” (-7.36%), “soccer shoes” (-5.61%), “suitcase”
(17.92%), “mini-bar” (15.76%), and “dish washer” (-4.35%), and “drink cooler” (-2.97%).

ANNUAL VARIATIONS OF FIPE/BUSCAPÉ INDEX BY PRODUCT CATEGORIES (JUN16/JUN15)

HOUSEHOLD APPLIANCES 11.02


COMPUTER 10.28
ELECTRONIC DEVICES 9.63
SPORTS & LEISURE 8.32
COSMETICS & PERFUMERY 7.85
HOUSE & DECOR 6.85
TOYS & GAMES 5.99
PHOTOGRAPHY 4.19
TELEPHONY 0.19
FASHION & ACCESSORIES -7.24

142 CATEGORIES WITH INCREASE 9.70


15 CATEGORIES WITH DROP -1.18

OVERALL TOTAL (157 CATEGORIES) 8.29


-10% -5% 0% 5% 10% 15%
SOURCE: FIPE/BUSCAPÉ INDEX

51
CHAPTER 4 | FIPE/BUSCAPÉ INDEX TABLE OF CONTENTS

E-COMMERCE PRICES COMPARED


TO OVERALL PRICES
T he following graph shows that
e-commerce prices have an
annual variation -0.51% lower than
remain lower, as it has been
throughout the series. If the
monthly average variation of the
The numbers in the
series translate a significant
competitiveness of product
the average IPCA prices in the FIPE/Buscapé Index of the second prices marketed in e-commerce
period June 2016/June 2015, since quarter of 2016 – which was 0.23% related to the average prices
e-commerce prices increased – is maintained, the expected that comprise household
8.29% in the period when IPCA average annual variation for the budget, partially explaining the
recorded an increase of 8.84%. second half shall be 5.8%. growth in the sector over time,
which was 15.3% in rated terms
In the first half of the year, Throughout 2012 – before the in 2015, and 13.3% in actual
the annual variation of the FIPE/ impact of the foreign exchange terms, based on the 1.79%
Buscapé Index was 8.53%, 1% devaluation over the prices of variation of the Fipe/Buscapé
lower than the IPCA variation imported products, which have Index. This growth is quite
of 9.63%. Forecasts are that a great weight in e-commerce – relevant considering that GDP
the annual IPCA variation shall variation of FIPE/Buscapé Index dropped -3.8% and it means
decline throughout the year but was approximately 13% lower than that e-commerce had a 17.7%
the annual variation of FIPE/ the variation of average prices in growth above the economy in
Buscapé Index will probably the economy. a recessive context.

ANNUAL VARIATIONS OF FIPE INDEX/BUSCAPÉ, IPCA, AND DIFFERENCE (MONTH Q / MONTH Q-12)

10.0

5.0

0.0

-5.0

-10.0

-15.0

2012 2013 2014 2015 2016


MAY

MAY

MAY

MAY

MAY
SEPT

SEPT
OCT

SEPT
OCT

SEPT
OCT
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
JAN
FEB
MAR
APR

JUN
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN

ANNUAL IPCA VARIATION ANNUAL FIPE-BUSCAPÉ VARIATION DIFFERENCE FIPE-BUSCAPÉ/IPCA

SOURCE: FIPE/BUSCAPÉ INDEX

52
CHAPTER 4 | FIPE/BUSCAPÉ INDEX TABLE OF CONTENTS

OVERAL IPCA INDEX, FIPE/BUSCAPÉ, AND COMPOUND FIPE/BUSCAPÉ WITH IPCA PRICES (JAN11=1)

1.500

1.400

1.300

1.200

1.100

1.000

0.900

0.800

2011 2012 2013 2014 2015 2016


MAY

MAY

MAY

MAY

MAY

MAY
SEPT
OCT

SEPT
OCT

SEPT
OCT

SEPT
OCT

SEPT
OCT
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
JUL
AUG

NOV
DEC
JAN
FEB
MAR
APR

JUN
OVERALL IPCA TOTAL FIPE/BUSCAPÉ INDEX COMPOUND INDEX (IBGE PRICE AND FIPE-BUSCAPÉ WEIGHT)

SOURCE: FIPE/BUSCAPÉ INDEX

The graph above the behavior of the FIPE/Bus- Buscapé Index, and 49% more
shows a comparison of the capé Index, and it represents than the Compound Index.
Overall IPCA with FIPE/ approximately 72% of the
Buscapé Index regarding weight of FIPE/Buscapé Index A significant part of these
prices in e-commerce and in e-commerce. differences can be explained by
a Compound Index of IPCA the following factors: a) the FIPE/
variations (physical retail) Specifically in June/2016, Buscapé Price Index monitors
with FIPE/Buscapé Index compared to the basis of a product basket different from
weights (weight of products January/2011 (65 months), the the one analyzed by the overall
in e-commerce) for the FIPE/Buscapé Index is 11% price indices, i.e., only those that
product categories that lower, and the Compound are marketed more significantly
are compatible with FIPE/ Index with IPCA prices and over the Internet; b) the weight
Buscapé, although with FIPE/Buscapé weights for of products that comprise the
different product baskets. compatible products is 2.5% FIPE/Buscapé Index are quite
lower. On the other hand, the different from their weight in ge-
It is noteworthy that the behavior of these two indices neric indices; c) the distribution
behavior of the Compound is quite different from the channel monitored by the FIPE/
Index of product categories behavior of Overall IPCA, which Buscapé Index is exclusively
surveyed by IPCA and by in the period June 2016/January e-commerce, while the other in-
FIPE/Buscapé Index is quite 2011 rose approximately 45.6%, dices monitor several other tra-
aligned and consistent with or 64% more than FIPE/ ditional and physical channels.

53
FINAL
CONSIDERATIONS

54
FINAL CONSIDERATIONS | MAIN CLIENTS TABLE OF CONTENTS

MAIN CLIENTS

55
FINAL CONSIDERATIONS | GLOSSARY TABLE OF CONTENTS

GLOSSARY
A ADHOC: research under request
with a specific purpose F FIPE/BUSCAPÉ INDEX:
systematized calculation of prices
in the Brazilian e-commerce
ORDER: each purchase performed,
request for a product to be purchased

APPS: abbreviation of applications

APPLICATIONS: programs developed


with a purpose (such as e-commerce,
game, services) which might be H HOUSEHOLD INCOME:
average earnings of a household,
P PLAYERS: market components,
retailers (regarding e-commerce)

downloaded by Internet, to be sum of members who work PRICE COMPARATORS: websites


used via mobile devices and live in the same residence whose main feature is to search
prices of a product and list the
AVERAGE TICKET: calculated average variety found in several stores
amount spent by order or purchase

I INTERNET: world
computer network

B BALANCE: sales result


over a certain period
R RATED GROWTH: evolution of
sales without deducting inflation,
difference in sales increase

BLACK FRIDAY: e-commerce date


with great discounts, typically on
L LAYOUT: a website visual due
to its design, appearance of an
Internet page. Online stores: a store
RESPONSIVE WEBSITES: website
adapted for mobile devices, with
the last Friday of November. This established online that performs settings and/or layout designed for the
event originated in the United States, sales in e-commerce. E-commerce mobile format, adapted to the size of the
and was deployed in the Brazilian screen and which make browsing easier.
e-commerce in 2012

BROWSER: browser to access


the Internet M MEDALS: Ebit medals, certification
assigned by Ebit to classify stores
according to online consumer S SALES: Total amount raised from sales

satisfaction after appraising the SEARCH ENGINES: service website


service provided (they might be for price search and/or comparison,

C CLASS A, B, C & D: classification


of social classes by household or
individual income (A and B: income
Diamond, Gold, Silver, and Bronze)

MOBILE COMMERCE:
e.g. Buscapé and Bondfaro

SHARE: market share


from R$3,001/ month on; C e D: online commerce performed
income up to R$ 3,000/month) via mobile devices, such SMARTPHONES: mobile telephony
as smartphones or tablets device, which enables access to the
CONSUMERS' DAY BRAZIL: date set in (m-commerce is its abbreviation) Internet and other advanced features
the online retail calendar and created
by Buscapé Company with the MOBILE DEVICES: mobile devices, SOCIAL MEDIA: websites
support of entities and retailers in the such as smartphones and tablets (environments) where people meet
sector for one discount day similar to (such as Facebook, Twitter, and others)
Black Friday. It takes place in March,
on a Wednesday near the 15th STORE CERTIFICATION: assessment

CROSS BORDER: operation of


an e-commerce order to be delivered
N NPS®: Net Promoter Score®,
trademark of Bain & Company.
An indicator that measures
performed by Ebit through a survey with
consumers who performed purchases
over Internet, in the post-sales, to build
to another country client satisfaction and loyalty confidence in online purchase

D DESKTOP:
desk computer O ONE-TIME E-CONSUMERS: those
who have performed at least one
T TABLETS: mobile device that works
as a portable computer, with use of
functionalities and Web browsing
purchase over the Internet through touch screen

OMNICHANNEL: concept according TRANSACTIONAL VOLUME:

E E-COMMERCE: online store,


environment of electronic
commerce. E-business,
to which all channels of a retail
brand become available for contact
with the consumer, inter-relation
sales proportion

TRANSACTIONS:
e-commerce, online retail, off-line and online operations, purchases performed
purchase over the Internet
ONLINE RETAIL: e-commerce,
E-CONSUMIDOR: consumer who
performs purchases over the Internet
online commerce, purchases
performed over the Internet W WI-FI: wireless access
to the Internet

56
FINAL CONSIDERATIONS | MARKETING SUPPORT TABLE OF CONTENTS

MARKETING SUPPORT
PREMIUM PARTNER

www.fecomercio.com.br

The Federation of Commerce of Goods, Services,


and Tourism of the State of São Paulo (FecomercioSP)
is the main union entity of São Paulo for the commerce
and service sectors. Responsible for managing the Social
Service of Commerce (Sesc) and the National Service
of Commercial Apprenticeship (Senac) in this State, it
represents an Economy segment that mobilizes over 1.8
million business activities of all sizes, and it gathers 154
employers' unions, which account for 11% of the GDP
in São Paulo – around 4% of the Brazilian GDP –,
generating around five million jobs.

57
FINAL CONSIDERATIONS | MARKETING SUPPORT TABLE OF CONTENTS

OTHER PARTNERS

www.camara-e.net
www.acsp.com.br
About the Brazilian Chamber
Since 1894, the Commercial of E-commerce: The mission of
Association of São Paulo has worked camara-e.net, main multi-sector
on behalf of entrepreneurs who entity in Latin America and Brazilian
have activities in the city of São association with the highest
Paulo. From family businesses to representativeness in Online
large industries, over 30 thousand Economy, is to qualify people and
entrepreneurs have the support organizations for the safe practice
of the Association to defend their of online businesses. With 15 years
interests before society and the since its foundation, its role has
Government and in providing been essential to the formulation
exclusive services that make the of public policies in line with
entrepreneur's daily life easier. modern society's aspirations, and
especially to enhance sectorial
regulatory milestones that provide
legal support to the incentive
measures required for the
development of our country.

posted on the E-Commerce Brasil portal


on a daily basis, print magazines, trainings
www.ecommercebrasil.com.br for professionals in the sector, as well as
promoting a series of events throughout
E-Commerce Brasil is an e-commerce the country, with emphasis on the
market fostering project in Brazil and it E-Commerce Brasil Forum, major
offers over 100 activities throughout the e-commerce event in the world and in
year, among which are: specialized content Latin America, according to Forrester.

58
FINAL CONSIDERATIONS | MARKETING SUPPORT TABLE OF CONTENTS

iabbrasil.net

Founded in 1998 with the core mission of


developing the interactive media market in www.ibevar.org.br
Brazil. From 2006 on, the Interactive Media
Association (AMI) became a part of the The Instituto Brasileiro de Executivos
most important network of associations de Varejo & Mercado de Consumo
in the world – the Interactive Advertising (Brazilian Institute of Retail Executives
Bureau –, changing its designation to IAB & Consumer Market) is a non-profitable
Brasil. Since then, this association has institution. It was founded in December
been part of an international network of 2009, in São Paulo, by a group of
associations, which has representations professionals linked to the retailer
in over 43 countries, among which are sector, with the objective of establishing
the USA, Australia, Singapore, Spain, discussion groups, relationships, and
France, England, Italy, Chile, and Mexico. knowledge regarding this market.
IAB Brasil has currently more than 230
associates, among websites, portals,
technology companies, Web-developing
agencies, which are leaders in their
segment in the country.

Our partners come from all segments


of Mobile Marketing, including brands,
advertisers, agencies, technology
www.mmaglobal.com platforms, media companies, operators,
among others. MMA's mission is to
MMA is the main non-profitable speed up changes and innovation in
association of the mobile ecosystem marketing through mobile devices,
worldwide, with over 800 partner promoting growth in the business with
companies in approximately 50 countries. high involvement of consumers.

59
CONSIDERAÇÕES
FINAL CONSIDERATIONS
FINAIS | INFORMAÇÕES
PRESS INFORMATION
PARA IMPRENSA
/ TEAM/CONTACTS
/ CONTATOS TABLE OF CONTENTS

PRESS
INFORMATION
EBIT DATA DISCLOSURE
Ebit requires to be referred to as a source
of information in any academic study, press release,
opinion article, editorial, or news article stating data collected
in its studies about the Brazilian e-commerce market,
especially the Webshoppers report. We reinforce that the data
is Ebit´s propriety, and therefore, those who use it must always
inform the source, in order to enhance the credibility
of the information and avoid that data disclosed
by the company is attributed to other source.

TEAM/CONTACTS
ANDRÉ RICARDO DIAS PEDRO GUASTI
Ebit COO Ebit CEO
andre.dias@ebit.com.br pedro.guasti@ebit.com.br
+55 11 3848-8700 +55 11 3848-8700

IMPLEMENTATION
EBIT TEAM PRESS OFFICE
KEINE MONTEIRO FIRSTCOM COMUNICAÇÃO OF EBIT SURVEY
Business Intelligence www.firstcom.com.br
+55 11 3034-4662 Contact
JÉSSICA OLIVEIRA convenio@ebit.com.br
Business Intelligence LUIS CLAUDIO ALLAN
luisclaudio@firstcom.com.br Know more aqui
RENANN MENDES
Marketing and Operations Coordinator CÍNTIA YAMASHIRO
cintia.yamashiro.ext@buscapecompany.com
LETÍCIA AVELAR REPORT
Marketing Analyst JANAINA CAVALHEIRI AND SURVEY
janaina@firstcom.com.br
VITÓRIA JABUR ENGAGEMENT
Marketing Analyst
ART & LAYOUT Contact
MÁRIO FROES RITA MAYUMI
IT Manager www.ritamayumi.com comercial@ebit.com.br

60
www.ebit.com.br
www.buscapecompany.com