Global B2B website Alibaba.com, already entrenched in BRIC countries China and India, is expanding its presence in a third with a deeper push into Brazil.
Despite the Latin American nation’s diminished economic outlook of late, Alibaba.com has targeted Brazil as a top prospect for long-term growth because of its big population (250 million, fifth in the world) and concentration of 7 million small-and-medium-sized businesses, Alibaba.com’s main customers.
The world’s sixth-largest economy has 90 million Internet users and one of the highest Internet penetration rates among developing countries: 45 percent compared with China’s 38 percent, according to consultancy A.T. Kearney.
Alibaba.com already has more than 1 million registered members in Brazil, and the number of monthly unique visits to the wholesale trading website from the country have more than tripled in the past year. “We’ve been getting this growth without doing much,” said Michael Lee, director of global marketing for Alibaba.com, which helps match buyers with wholesale suppliers and provides global trading services.
“That’s what’s prompted us to start looking deeper into this country,” Lee said. “The market is still pretty open for B2B. There are many B2C sites but there aren’t major (B2B) competitors.”
Alibaba.com in August formed an internal team to develop market strategy. In the past, the website has focused its efforts on Brazilian suppliers, but that focus now also includes buyers, Brazilian companies interested in sourcing products overseas. The shift occurred because Alibaba noticed a significant increase in buying requests from Brazil that were being made to the tens of thousands of Chinese manufacturers that sell through Alibaba.com. “The lower-hanging fruit is the buyers,” said Lee.
Alibaba.com recently launched a marketing campaign designed to raise brand awareness and encourage Brazilian businesses to try international e-commerce. “They may not be aware that (overseas) sourcing can be easy and it does not have to be daunting,” Lee said. “We have the suppliers, variety of products and an array of value-added services that can help deliver the goods to the door.”
Lee noted the website helps suppliers find freight-forwarding companies experienced with goods shipped between China and Brazil. The website also provides short-term inventory loans to buyers through its e-Credit Line service.
The Brazilian market poses several obstacles to e-commerce importers. “There are a lot of taxes imposed by customs and logistics can be a challenge,” Lee said. To help overcome some of the hurdles, Alibaba.com is seeking to partner with companies with local knowledge, and plans to work with import agencies and customs brokers. “We’ll probably build a referral service platform similar to our existing Inspection Service,” Lee said, “so when buyers want to import from China, they can work through customs brokers. We just get the key players together on the platform to make things happen for the buyer.”
Key to attracting users is providing content in Portuguese. Alibaba.com has a machine-translated Portuguese home page, but the website is currently hiring native Portuguese speakers to create better content. The real challenge is being able to accurately translate dynamic content such as product listings, Lee said, a problem the website is working on. “We have made the Portuguese site a top priority,” he said.
When an initial guerilla marketing push was completed recently, Alibaba.com saw its Brazil Facebook fan roster increase from 500 to 4,000 in two weeks, Lee said. A football-themed digital marketing campaign is planned for January, and TV ads might also appear in 2014, he added.
Currently Alibaba.com’s top three markets, not counting the company’s home market of China, are the U.S., the U.K. and Australia.
Because Brazil is a trading hub for neighboring Latin American nations, “our long term goal is not only to cover this country but also to use it as a step to expand to other South American countries,” Lee said. Other regions being eyed by Alibaba include the Middle East and Russia.
