WebShoppers 27th Edition - English Version

Table of Contents

WebShoppers................................................................................................. 03

e-bit............................................................................................................ 04

e-bit products................................................................................................ 06

Report methodology......................................................................................... 07

Executive Summary......................................................................................... 08

Report Structure………....................................................................................... 10

Chapter I - 2012 conclusion and segment expectations for 2013……............................. 11

Chapter II – Digital Commerce............................................................................. 21

Chapter III – Payment Methods….......................................................................... 24

Chapter IV – Buscapé/FIPE Index.......................................................................... 33

Major e-bit clients…………….................................................................................. 38

About e.net-chamber........................................................................................ 39

Press information……………................................................................................... 40

Contact information.......................................................................................... 41

2 Copyright e-bit – All Rights Reserved

WebShoppers

Created by e-bit, WebShoppers aims at disseminating key information regarding electronic commerce in Brazil

Published semi-annually, the report assesses e-commerce progress, trends and estimates, consumer preferences andbehavior changes, in order to identify trends and thus contribute to the segment’s development.


Operating in the Brazilian market since January 2000, e-bit has been monitoring the development of Brazilian digital retailfrom its very beginning, and has become a major reference in the segment.

Through its sophisticated system, which gathers data directly from online buyers, e-bit generates detailed e-commerceinformation on a daily basis.

The e-bit website provides essential information for the consumer decision-making process (www.ebit.com.br), in additionto offering services and products to retailers.

The e-bit retailer certification helps leverage consumers’ confidence in online purchase transactions. The medal-ratingsystem (Diamond, Gold, Silver and Bronze) certifies the quality of services offered by retailers, and assists consumers inthe purchase decision process. For executives and retailers, e-bit serves as a source of knowledge regarding e-commerce in

e-bit

the purchase decision process. For executives and retailers, e-bit serves as a source of knowledge regarding e-commerce inBrazil, and contributes to the development of businesses and the segment in general.

Published semi-annually, the report assesses e-commerce progress, trends and estimates, as well as consumer preferencesand behavior changes, identifying trends and contributing to the segment’s development.

Learn more about e-bit and its main products below.


e-bit products

� e-bit Certification – A pioneer virtual store rating service in Latin America, and a major reference for electroniccommerce in Brazil. e-bit covers over 8,000 virtual stores, whose consumers are asked to complete a survey uponconcluding online acquisitions. The survey encompasses three stages: the first stage comes immediately after theeffective purchase; the second takes place a few days later, in order to assess delivery quality; and the third stageevaluates product usability. The entire process is automatic and simple, carried out entirely online.

� e-bit Help – An exclusive service, free of charge, which helps consumers contact virtual stores. e-bit Help aims atreducing difficulties and the time spent by consumers attempting to contact stores, whenever products are not delivered.

� Electronic Commerce Information – Questionnaires completed on a daily basis by consumers, regarding the quality ofservices rendered by virtual stores, which are stored in e-bit’s database. By cross-referencing such data, e-bit generatesreports that identify online consumer profiles – gender, age, income, educational background, habits – and offercomparative assessments of services provided by virtual stores, payment methods, invoicing, etc. Among the main reportscomparative assessments of services provided by virtual stores, payment methods, invoicing, etc. Among the main reportsare:

� e-Dashboard – A cutting-edge tool that provides daily-updated information based on virtual store and marketdevelopment, presenting data such as: number of orders, invoicing, average ticket, number of single consumers,geographical region share, category market share (computers, electronic products, etc.), purchase motivators, deliverystatus, payment methods used, among others.

� E-commerce Overview and Forecast Report: Provides market development data since 2000, including projectionstowards 2020.


e-bit products

� Price Monitor – In addition to reports that monitor Brazilian e-commerce transactions, e-bit also provides a monitoringservice that collects information regarding price, competitiveness and virtual consumer purchase intent. The PriceMonitor provides nearly real-time monitoring of product prices in virtual stores, in addition to rating categories,products and brands that are most sought-after by consumers when buying online, as well as product purchase intentand shipping prices.

� TOP HITS – Lists the most sought-after products by Brazilian e-consumers, detailing each category and sub-category’sshare, based on Buscapé network data.

� Survey Panel - e-bit relies on a highly-qualified panel of survey respondents comprised of over 1.3 million virtualconsumers. Respondents are invited to participate in quantitative and qualitative online surveys, for which they aregranted coupons to compete for rewards. Survey respondent samples may be pre-selected based on gender, age,income, educational background, geographic location, and topics of interest.income, educational background, geographic location, and topics of interest.

� Behavioral Analysis Report: Provides executive information regarding the level of satisfaction with services renderedand the profile of virtual stores’ consumers, compared to the e-commerce market in general. Additionally, users canchoose to receive comments from unsatisfied customers in real time, along with the respective order number. Thisallows immediately detecting eventual issues and adopting measures to solve problems and retain clients, promotingcustomer loyalty.

Learn more about e-bit products at [email protected].


The 27th edition of the WebShoppers report is based on information from surveys conducted by e-bit, encompassing over8,000 virtual stores, and its consumer panel, in addition to ad hoc surveys and external data.

e-bit Certification Survey

Since January 2000, e-bit has gathered over 15 million surveys completed after online purchase transactions, and 250,000new surveys are added to this total every month.

e-bit data is also collected from online buyers, immediately after the acquisition. In addition to rating the virtual store andpurchase experience, the e-bit certification service also allows buyers to rate post-sale services, customer services,probability of recurring purchases and store recommendation to friends and relatives, known as NPS (Net Promoter Score).

Report methodology

Such compiled information generates monthly Market Intelligence reports that establish social-demographic profiles of e-consumers, in addition to identifying the most sold products, most used payment methods, and repurchase indicators,among others.

With the latest edition of WebShoppers, e-bit hopes to carry on contributing to the constant development of the Internetand electronic commerce in Brazil.Enjoy!

e-bit staff


Executive Summary

� The segment ended 2012 with R$ 22.5 billion in earnings, an increase of 20% compared to 2011, when a total of R$18.7 billion was recorded in consumer goods sales. Balance sheets were compensated in the second half of the year dueto the slight average ticket increase over the 2nd semester: R$ 338 X R$ 346.

� A total of 66.7 million orders were placed in 2012, a 24.2% increase compared to the previous year. The rising demandwas accompanied by an increase in the number of virtual consumers (10.3 million new consumers). Currently, over 42.2million people have performed at least one online purchase in Brazil.

� In 2012, 46% of those who made their first online purchase had a family income between R$ 1,000.00 and R$ 3,000.00(Class C range). Categories with most orders were defined as follows: ‘Home Appliances’ in first place, with 12.4%,followed by ‘Fashion and Accessories’, increasingly consolidated, with 12.2%. In third place, ‘Health, beauty andmedications’ with 12%. ‘Computer Products’ and ‘House and Decoration’ completed the ranking with 9.1% and 7.9%,respectively.

� 54% of orders placed included free shipping, which generated “savings” of R$ 1.09 billion to Brazilian consumers - ahigher figure if compared to total shipping expenses in Brazil in 2012. The 46% remaining orders generated additionalcosts totaling R$ 932.1 million.

� In 2012, the Group Buying segment earned R$ 1.65 billion, an increase of 8% compared to 2011. However, the numberof offers acquired recorded a much higher growth, totaling 25.3 million orders, which represents a 30% increasecompared to 2011.

� In January 2012, the M-Commerce transaction volume share was 0.8%. In June, the index was 1.3% and, in January2013, it reached 2.5%.

� Brazilian electronic commerce figures will continue to rise in 2013. According to the projections of e-bit, a specializedcompany in the segment, B2C e-commerce should present a rated increase of 25%, reaching R$ 28 billion in earnings by2013.


Executive Summary

� According to such data, estimated B2C Digital Commerce earnings in Brazil in 2012 totaled R$ 49.7 billion (including R$22.5 billion earned by the virtual retail segment in consumer goods). The estimated B2C Digital Commerce marketgrowth in 2013 is 19.8%, reaching total earnings of R$ 59.5 billion.

� An ad hoc survey conducted by e-bit indicates that debit cards were mostly used by women. According to annualdata, 54% of e-consumers who use such payment method are women. The number of women who use this paymentmethod is even higher among new e-consumers: 57%. The survey indicated that most consumers (19%) who used creditcards chose to settle the debt in a single installment. With the use of debit cards becoming increasingly popular in themarket, this payment method is likely to gain increasing acceptance and rank amongst top e-consumer payment options.

� In February 2013, the Buscapé/FIPE Index, a report that analyzes the prices of over 1.3 million products in theBrazilian B2C e-commerce segment on a monthly basis, recorded an average price drop of -0.42%. Such decrease furtherconsolidates the recent deflationary trend, interrupted in January 2012 (0.90%) and January 2013 (2.39%), whichconsolidates the recent deflationary trend, interrupted in January 2012 (0.90%) and January 2013 (2.39%), whichpotentially reflects a seasonal behavior of e-commerce prices.

� During a twelve-month period (Feb13/Feb12) the Buscapé/FIPE Index recorded a drop of -6.13%, with 9 out of 10groups reducing prices and significant variations between product groups within the index. According to a surveyconducted by FIPE, gains totaling R$ 5.8 billion stem from the fact that prices are 10% cheaper online, compared to thephysical market, and gains totaling R$ 3.6 billion result from consumers’ access to price comparison tools, generatingtotal savings of R$ 9.4 billion for Brazilian e-consumers.


Report structure

CHAPTER I CHAPTER II CHAPTER III CHAPTER IV

2012 conclusion and

segment expectations for 2013

Digital Commerce Payment Methods

Buscapé/FIPE Index


CHAPTER I

2012 conclusion and

Report structure

2012 conclusion and segment expectations for 2013


Chapter I

Closing the 2012 books

The year of 2012 ended with positive figures for Brazilian B2C e-commerce. The segment ended the year with R$ 22.5 billion in earnings, anincrease of 20% compared to 2011, when a total of R$ 18.7 billion was recorded in consumer goods sales. Such figures confirm e-bit’selectronic commerce projections, provided in the last edition of the WebShoppers report.

After the subpar performance during the 1st half of 2012, mainly due to the government’s difficulty in stimulating the economy, the segmentcaught second wind in the second half, compensating balance sheets mainly due to the slight average ticket increase in the 2nd semester: R$338 X R$ 346. The 2012 average ticket closed at R$ 342.

One of the factors behind such increase is the higher number of seasonal dates in the 2nd half of the year, including Christmas. In addition toFather’s Day and Children’s Day, by the end of the year, Christmas was once again the most relevant seasonal date, recording the highestsales volume: R$ 3.06 billion.


Chapter I

Additionally, Black Friday was permanently consolidated as a new seasonal date in Brazil, establishing record figures. On November 23, atotal of R$ 243.8 million was recorded in online consumer goods sales, in only 24 hours; this represents an increase of 143.8% compared to2011, which totaled R$ 100 million.

A total of 66.7 million orders were placed in 2012, a 24.2% increase compared to the previous year. The rising demand was accompanied byan increase in the number of virtual consumers (10.3 million new consumers). Currently, over 42.2 million people have performed at leastone online purchase in Brazil.


Chapter I

An important factor is e-consumers’ satisfaction with B2C online retail; a positive sign for the segment, which continues to meetexpectations, even with more deliveries and consumers to handle. According to data gathered by e-bit in partnership with the MovimentoInternet Segura [Secure Internet Movement] (MIS), Brazilian Electronic Commerce Chamber committee (e.net-chamber), an average of86.1% of Brazilian consumers were satisfied with B2C virtual retail in 2012, based on an excellence cutoff score of 85%.

e-consumer profile

The virtual consumer profile indicates that men and women are virtually tied, with a slight majority of females: 50.1% X 49.9% of males.Regarding new e-consumers, however, the difference is greater: 56.7% women X 43.3% men.

Regarding age ranges, both new and “old” consumers share equal positions: 38% are between the ages of 35 and 49.


Chapter I

An intriguing difference lies in educational background. Most new consumers (38%) currently attend High School, while consumers attendingCollege (29%) represent the majority of more “experienced” consumers.

Regarding income, the segment remains significantly supplied by the constant entrance of Class C members. Most e-consumers (37%) belongto this social class. The most relevant figure, however, refers to new consumers. In 2012, 46% of people who performed their first onlinepurchase had a family income between R$ 1,000.00 and R$ 3,000.00 (Class C range).

Most sold categories

In 2012, categories with most orders were defined as follows: ‘Home Appliances’ in first place, with 12.4%, followed by ‘Fashion andAccessories’, increasingly consolidated, with 12.2%. In third place, ‘Health, beauty and medications’ with 12%. ‘Computer Products’ and‘House and Decoration’ completed the ranking with 9.1% and 7.9%, respectively.


Chapter I

Shipping: Expenses and savings

According to e-bit data, 54% of orders placed included free shipping, which generated “savings” of R$ 1.09 billion to Brazilian consumers - ahigher figure if compared to total shipping expenses in Brazil in 2012. The 46% remaining orders generated additional costs totaling R$ 932.1million.

Group Buying

The 27th edition of the WebShoppers also provided new figures and data regarding the Brazilian Group Buying segment.

In 2012, the segment earned R$ 1.65 billion, an increase of 8% compared to 2011. However, the number of offers acquired recorded a muchhigher growth, totaling 25.3 million orders, which represents a 30% increase compared to 2011.

The average ticket dropped 17% between 2011 and 2012, ending the year at R$ 65.40. Such decrease may be explained by increased sales ofBars and Restaurants offers, which present lower average ticket compared to other categories of the segment, such as Tourism and Traveling.Bars and Restaurants offers, which present lower average ticket compared to other categories of the segment, such as Tourism and Traveling.


Chapter I

According to the survey, 61% of e-consumers are still women and 39% are men, based on an average age of 39. Regarding educationalbackground, 54% are graduates and have an average family income of R$ 4,144.00.

Offer recommendation

Of all consumers who acquired offers during 2012, 55% stated that they did not recommend the offer to friends or relatives, while theremaining 45% recommended offers.

Among recommending consumers, 38% did so via email; 30% personally; 14% via telephone; and 12% via Facebook, which indicates that socialnetworks are expected to gain more space in social-commerce and recommendation of products and services in the near future.

However, when consumers were asked if they actually intended to recommend offers, responses varied slightly in each of the categories:43% stated they intended to recommend via email; 33% personally; 8% via telephone; and 11% via Facebook.


Chapter I

Mobile Commerce

More than just a trend; a reality. That is how Mobile Commerce is interpreted within the digital market.The channel’s exponential growth clearly supports such statement.

In January 2012, the M-Commerce transaction volume share was 0.8%. In June, it was1.3% and in January it reached 2.5%.

With new applications and technologies focused on this type of commerce, progress will persist throughout the next few years. TheOmnichannel and the ability to compare prices at physical stores are consumers’ main allies in this segment.


Chapter I

2013: what lies ahead?

Brazilian electronic commerce figures will continue to rise in 2013. According to the projections of e-bit, a specializedcompany in the segment, B2C e-commerce should present a rated increase of 25%, reaching R$ 28 billion in earnings by2013.

Better results are expected, compared to 2012, due to the returning economic development and increased sales of mobiledevices such as tablets and smartphones.

Another element that indicates such growth is the constant entrance of Class C and D members into the market.Approximately 56% of new consumers belong to these classes, despite current signs of indebtedness which could eventuallyslow down consumption. In November, for example, 59% of consumers stated they had outstanding debts, 6.8% of whichslow down consumption. In November, for example, 59% of consumers stated they had outstanding debts, 6.8% of whichstated they were unable to settle such debts, which invariably affects B2C e-commerce. If such indebtedness rate waslower, B2C e-commerce would grow even more.


Chapter I

In 2013, the demand for TV sets is also expected to increase, since a significant number of Electronics was sold in 2010,especially LED and flat-screen TV sets, encouraged by the upcoming World Cup. In 2013, Brazil will host the ConfederationsCup, which may anticipate the replacement of such products for the 2014 World Cup.


CHAPTER II

Digital Commerce

Report structure


Chapter II

B2C Digital Commerce Estimates

Much more than simply understanding the ‘traditional’ online retail segment, e-bit strives to understand the digital market as a whole. Based onthis premise, the company conducted a survey that will be updated annually, revealing how other areas of the digital segment operate andgenerate revenue, covering Market Places, online ticket sales, airline and traveling tickets and packages, as well as group buying. Such segmentsare currently not covered by e-bit’s traditional survey collection methodology, and will be monitored with the aid of other statistical methodsand processes.

Such monitoring activity offers even more benefits for the digital market, since figures cover not only online retail history, monitored by e-bitsince 2001, but also all operating fronts of the digital segment, virtually encompassing the entirety of B2C Digital Commerce, except for digitalcontent sales, such as books, songs, apps and games.

The methodology behind such estimates includes assessing internal data, public company information, market analyses, ad hoc surveys, audienceratings tools and market news.

Numbers on the table

According to data obtained from such assessment, 2012 B2C Digital Commerce earnings in Brazil are estimated at R$ 49.7 billion (including R$22.5 billion earned by the consumer goods virtual retail segment.)

Such assessment indicates that Market Places accounted for a GMV (Gross Merchandise Volume) of R$ 6.5 billion in 2012, representing 13.2% ofthe B2C Digital Commerce total.

Airline tickets, tourism and Ticket segments, in turn, represented a significant share of this total, accounting for 38.1%. Such relevance isattributed to the increased percentage of airline tickets and traveling packages sold online, with a growth rate above the GDP in the last fewyears.

e-bit added the Group Buying segment’s 2012 earnings, totaling R$ 1.655 billion, to the B2C Digital Commerce total, as specified in the firstchapter of this report.

Finally, we also added online Consumer Goods sales in 2012, totaling R$ 22.5 billion, known as online retail or B2C e-commerce earnings,traditionally assessed by e-bit since 2001. This segment accounted for 45.3% of the B2C Digital Commerce segment in 2012.


Chapter II

B2C Digital Commerce 2013 growth projections

The B2C Digital Commerce market is expected to grow by 19.8% in 2013, reaching total earnings of R$ 59.5 billion.


CHAPTER III

Payment methods

Report structure


Chapter III

Payment methods

In the current WebShoppers edition, e-bit attempted to better understand how consumers relate to different payment methods, specificallywith online debit payment.

In 2012, 47% of e-consumers who used “Debit Cards” were performing their first online purchase. This indicates that, due to the segment’smaturity, newcomers are more confident and face less difficulties in using such payment method.

Men or women?

Debit cards are mostly used by women. According to annual data, 54% of e-consumers who used such payment method were women. Thenumber of women using debit cards is even higher among new e-consumers: 57%.


Chapter III

Consumer debit card satisfaction rates are also higher when compared to credit cards and payment slips. This is mainlyattributed to the fact that debit cards provide fast-validating transactions, which expedites the logistics and productshipment processes and, as a result, increases online consumer satisfaction.

Payment terms and installments are the main concerns of most consumers, right? Well, not quite. The survey indicatedthat most consumers (19%) who used credit cards chose to settle the debt in a single installment. With the use of debitcards becoming increasingly popular in the market, this payment method is likely to gain increasing acceptance and rankamongst top e-consumer payment options.


Chapter III


Chapter III

B2C e-commerce market and electronic payment methods

The Internet constantly expands around the world, as it grows into the most important and easy purchase and sale channel. Under the goal ofunderstanding the needs and expectations of virtual consumers, as well as their consumption habits, Visa, a global payment technologycompany, studied such factors thoroughly. Results indicated a significant increase in the number of B2C e-commerce sales due to enhancedbandwidth access, greater use of banking services and security, as well as government reforms that stimulate the segment.

Surveys indicate that Brazil presents a significant increase in the adoption of B2C commerce as a sale and purchase platform, revealing thatthe segment grew 43% between 2010 and 2011. The rise of B2C e-commerce consolidated Brazil as the top Latin American country in whichonline sales reached 1% of the country’s Gross Domestic Product (GDP). Among Latin America and Caribbean countries presenting the highestaccrued electronic commerce purchases, in percentage order, Brazil leads the ranking with 59.1%, followed by Mexico (14.2%), Caribbean(6.4%), Argentina (6.2%), Chile (3.5%), Venezuela (3.3%), Central America (2.4%), Colombia (2%) and Peru (1.4%). The survey also indicatesthat Latin America is expected to reach a growth rate of 28.5% by late 2013.


Chapter III

Another survey assessed countries’ ability and readiness to transform the Internet into a sales channel effectively capableof reaching consumers. The indicator showed that Brazil’s ability grew 31% between 2010 and 2011, compared among 18countries throughout Latin America. Key points assessed to determine such positive results were market volume,technology infrastructure, banking services coverage, adoption of new technologies by consumers, and local offerpotential.

Based on such data, it is possible to infer that the reasons behind this segment’s development are not restricted to B2C e-commerce incentive, or even consumers’ confidence when performing online purchases. The positive scenario andperspectives regarding electronic commerce can also be explained by the increased use of electronic payment methods,such as credit and debit cards, which are replacing bank transfers and payment slips. According to e-bit data, for example,credit cards are the main choice of online consumers, accounting for 73% of all payments (mainly due to the possibility ofpayment in installments), followed by bank payment slips (18%) and others (8%). Such figures illustrate that onlinepayment in installments), followed by bank payment slips (18%) and others (8%). Such figures illustrate that onlineconsumers prefer electronic payment methods, and such trend may potentially increase even more, since such methodsare perceived as practical, convenient and, particularly, as secure purchasing methods.

The use of electronic payment methods in B2C e-commerce does not benefit consumers exclusively. This payment methodbenefits all stakeholders, such as establishments, financial institutions and governments, positively affecting the country’seconomy in general. Such statement is supported by the results of a survey regarding the impact of electronic paymentmethods on the economy, which indicated that the use of credit and debit cards added US$ 51.3 billion to Brazil’s GrossDomestic Product GDP) between 2008 and 2012.


Chapter III

The presence of electronic payment methods in e-commerce will surely stimulate the economy and retail activities further –as can be concluded from the debit card use survey. The percentage of people who owned debit cards in 2011 increased from63% to 72%, while the number of people who use debit cards for purchases rose from 67% in 2010 to 81% in the following year.These results indicate that this purchase method is now virtually as popular as credit cards. As debit cards become widelyaccepted on the Internet, electronic commerce is expected to grow proportionally.

Percentage of people who own debit cards: 63% [2010] [2011]Percentage of people who use debit cards for purchases: 67% [2010] 81% [2011]

The increase in debit card use is partially attributed to the new Class C, whose members typically did not have credit andrelied on payment slips, and are now able to make purchases with debit cards. In 2012, for example, this group covered54% of Brazilian citizens and presented a consumption potential of over R$ 1 trillion, equivalent to 51% of all familyincomes. In the same year, 9 million Brazilians made their first purchases, totaling R$ 24.12 billion in transactions. Inseveral cases, purchases are usually initiated with low ticket items, such as stores and services focused on low-value sales,including group buying, mobile recharging, song and movie downloads, etc. Some discounts are offered in case of cash, slipand especially debit payments.


Source: America Economia Intelligence 2012

Chapter III

Debit card benefits

With a total of 42.2 million e-consumers, B2C e-commerce’s excellent projections are evident in Brazil. The Internet hasbeen increasingly used as a strategic purchase channel for both new establishments and those that are already consolidatedin the market.

Despite the fact that Brazilians still use cash, checks and payment slips, the potential of electronic payment methods ishuge. According to a survey conducted by ABECS (Associação Brasileira das Empresas de Cartões de Créditos e Serviços[Brazilian Association of Credit Card and Service Companies]), only 27% of the country’s payments are effected via credit,debit or prepaid cards.

Compared to other payment methods, credit cards generate several benefits for consumers and retailers. PaymentCompared to other payment methods, credit cards generate several benefits for consumers and retailers. Paymentconfirmation of a purchase made with debit card, for example, occurs at the time of purchase, while confirmation ofpayments via payment slips occur at least two business days later. The effective receipt of purchases made with debit cardsoccurs in D+1 (purchase date plus one business day); that is, payments are received one day after the effective sale. In caseof payment slips, values effectively paid are only transferred to retailers in an average D+3 (three business days), subject toclearance from banking institutions.


Chapter III

The conversion rate between debit and payment slip sales is an additional highlight. With debit, purchases areauthenticated and confirmed within seconds, while Visa do Brasil surveys indicate that 30% to 50% of bank payment slipsissued at the time of purchase are never effectively paid. Purchase abandonments generate losses to retailers and affectbusinesses, since the product is reserved and cannot be sold to other consumers.

Another benefit generated by debit cards is security. Financial institutions that issue such cards provide solutions thatauthenticate cardholders at the time of online purchase, verifying data known only by the cardholder and the bank. Thedebit card issuing bank is responsible for validating cardholders, thereby ensuring safety in online transactions.

This technology, widely known as Verified by Visa (VbV) is based on a 3-D Secure protocol, which is standard in theelectronic payment method market, and is required for all online transactions performed with Visa Electron debit cards.

The VbV system boosts the volume of online card purchases, since several credit card clients refrain from makingpurchases at virtual stores due to lack of trust in providing card information to online stores.

Debit card and payment methods data:: e-bitVISA survey sources:comScore. Câmara Brasileira de Comércio Eletrônico [Brazilian Electronic Commerce Chamber] – e.net-chamber.ABComm (Associação Brasileira de Comércio Eletrônico [Brazilian Electronic Commerce Association])America Economía- eCommerce LAC study- Part I 20123D-Secure Protocol – Security protocol developed and owned by Visa, applied in purchases based on the non-present card modality (B2C e-commerce)AmericaEconomia IntelligenceMoody’s AnalyticsKitelab


CHAPTER IV

Buscapé/FIPE Index

Report structure


Chapter IV

In February 2013, the Buscapé/FIPE Index, a report that analyzes the prices of over 1.3 million products in the Brazilian B2C e-commerce segmenton a monthly basis, recorded an average price drop of -0.42%. Such decrease further consolidates the recent deflationary trend, interrupted inJanuary 2012 (0.90%) and January 2013 (2.39%), which potentially reflects a seasonal behavior of e-commerce prices.

During a twelve-month period (Feb13/Feb12) the Buscapé/FIPE Index recorded a drop of -6.13%, with 9 out of 10 groups reducing prices andsignificant variations between product groups within the index.

Despite price variations in different products, a generalized and expressive price decrease trend is observed, since out of 151 product categoriesassessed, 110 (73% of the total) presented an average price decrease of -7.46%, and only 41 presented an average price increase of 3.51% within a12-month period.


Chapter IV

The category with most significant decrease was Electronics (-14.51%), followed by Fashion and Accessories (-12.75%), Photography (-10.86%) andTelephony (-9.32%). The leading Home Appliances category was the only one to record a price increase of 0.11% in the Feb13/Feb12 period,sustaining a series of annual drops for twelve consecutive months as of January 2013.

Brazilian B2C E-commerce Price Search Value (FIPE Survey)

The Brazilian B2C e-commerce segment accounted for R$ 22.5 billion in 2012. One of the segment’s development factors is the “long-tail” effect,which allows wider product offers focused on B2C e-commerce niches rather than the physical market, which entails a much greater inventory ofvirtual stores compared to physical stores – surveys held in other countries, for example, indicate that online stores’ inventories are 6 to 23 timeslarger than those of physical stores.


Chapter IV

For consumers, the “long-tail” effect translates into a wider range of products and stores to choose from.

Preliminary surveys conducted in the U.S., France and India indicate that online store prices are, on average, 10% lowerthan offline stores. Assuming that such figure also applies to Brazil – which remains to be confirmed -, and based on the B2Ce-commerce segment’s earnings of R$ 22.5 billion in 2012, the average gain for Brazilian consumers who shop online wouldbe R$ 2.5 billion this year.

Considering that the benefits of price transparency, provided by online search engines, directly and significantly reflectover the offline retail segment, also through a process named “ROPO” (Research Online/Purchase Offline); that is, clientsthat search for products online, but actually acquire the products in physical stores. A McKinsey survey indicated that theROPO rate in Brazil was 1.3 in 2009; in other words, for each Real spent in B2C e-commerce, 1.3 Reais were spent in thephysical retail segment, after prior Internet search. Assuming such proportion for 2012, the physical retail segment wouldphysical retail segment, after prior Internet search. Assuming such proportion for 2012, the physical retail segment wouldpresent earnings of R$ 29.3 billion directly related to prior online searches in that year. Such figure would incorporate pricetransparency gains generated by online searches, approximately 10% (R$ 3.3 billion). Therefore, we estimate that price-comparison tools in B2C e-commerce should generate direct savings of approximately R$ 5.8 billion for Brazilian consumersin 2012, based on an average price 10% lower than that reflected on online and offline purchases.


Chapter IV

Considering the prices of products encompassed by the Buscapé/FIPE Index in May/12, the average difference between thelowest average price in B2C e-commerce (R$ 1,429.37) is 14% lower than the average price (R$ 1,660.86), which is wherethe potential additional gain based on price-comparison searches is located. Hypothetically, if such difference between thelowest and highest prices is cut in half, for example, (7%), B2C e-commerce consumers would save R$ 1.6 billion in 2012, inaddition to its effect on physical purchases (RAPA effect), which would total R$ 2.0 billion, generating additional gains of R$3.6 billion.

Considering the aforementioned actual gains of approximately R$ 5.8 billion, potential gains of R$ 9.4 billion are directlyrelated to transparency and competition stimulation resulting from online price-comparison tools.

In summary, gains of R$ 5.8 billion stem from the fact that prices are 10% lower online, compared to the physical market,and an additional R$ 3.6 billion results from access to price-comparison tools by consumers, generating total savings of R$and an additional R$ 3.6 billion results from access to price-comparison tools by consumers, generating total savings of R$9.4 billion for Brazilian e-consumers.

Such figures further stress the fact that e-commerce, supported by price-comparison and search engines, generatessignificant economic efficiency savings that directly translate into consumer cash and time savings, which explains thesegment’s significant sustainable development.

*The methodology to calculate the FIPE BuscaPe Index is a responsibility of Fundação Instituto de Pesquisas Econômicas, representedby teacher Sergio Crispim, Telephone Number: (+55 11 3767-1700 / 1701)


Major clients


Credits / About e.net-chamber

The Brazilian Electronic Commerce Chamber (e.net-chamber), established on May 7, 2001, is the main multi-segmentDigital Economy entity in Brazil and Latin America, focused on electronic businesses as strategic sustainable andeconomic development factors in the 21st century. Its mission is to qualify individuals and organizations to safelyconduct electronic businesses, by developing and disseminating cutting-edge knowledge, as well as defendingconsensus positions along with leading agents (public and private, domestic and foreign), who are connected with thepromotion of communication and information technologies. One of the chamber’s top priorities is devising andproposing public, regulatory and market policies, encouraging the production and spreading of communication andinformation technology benefits. The entity’s 100 partners represent leading companies within chief economicsegments in Brazil and around the world.

Visit the website at www.camara-e.net.


Press information

E-bit data disclosure

e-bit must be indicated as the information source in any academic study, press release, op-ed articles, or newspaperarticles mentioning the data collected in the former’s surveys regarding the Brazilian e-commerce market, particularly theWebShoppers report.

We hereby emphasize that the data provided herein is owned by e-bit and, therefore, those who use such data must informthe source, in order to ensure credibility and prevent data disclosed by the company from being attributed to other sources.


Pedro GuastiBuscapé Intelligence Marketing VP

e-bit General Director

Cris Rothere-bit Business Director

[email protected]+55 11 3848-8730

Pedro GuastiBuscapé Intelligence Marketing VP

e-bit General Director

Cris Rothere-bit Business Director

[email protected]+55 11 3848-8730

WebShoppers 27th Edition - English Version

Technology

Transcript of WebShoppers 27th Edition - English Version