Current Panorama and Main Trends On Logistics in Brazil and Mexico
As the COVID-19 pandemic reshapes our world, more consumers have begun shopping online in greater numbers and frequency. According to IBM U.S. Retail index, in the first quarter of 2020, department physical store sales and those from other “non-essential” retailers declined by 25%. This grew to a 75% decline in the second quarter. Meanwhile, e-commerce is projected to grow even more in 2021.
For that reason, in this article we will share a couple of trends and tips on how you can boost your business when selling to Brazil to grow even more in the region.
Understanding the Brazilian Customer Behavior
It's very important to understand the Brazilian customer behavior to discover what is the best approach to reach them. Brazilians seek innovation, high-quality products and well-known brands, which are usually sold in the U.S. for a very fair price. Brazilians are very much willing to spend that little bit more money just to get that high-quality product and well-known brand that they are looking for (which is typically not found in Brazil).
In 2019, alone Brazilians imported around 30 billion dollars worth of goods from the United States, so needless to say that demand is very high. Brazilians seek vendors that truly understand their demand, have a basic knowledge of import and import regulations in Brazil because they want to avoid bureaucracy at all costs. Despite the high import taxes Brazilians continue to import, because of the very fair price of the products in the United States and the very low freight rates they can find in the U.S.worth of goods from the United States, so needless to say that demand is very high. Brazilians seek vendors that truly understand their demand, have a basic knowledge of import and import regulations in Brazil because they want to avoid bureaucracy at all costs. Despite the high import taxes Brazilians continue to import, because of the very fair price of the products in the United States and the very low freight rates they can find in the U.S.
Logistics are a game-changer for Brazilians
Brazilians have the want, the need and the financial power to get what they want. They just need that practical logistics solution at their fingertips. According to Beyond Borders 2020/2021 Study about e-commerce and payments in Latin America after COVID-19, in the first few months of 2020, Brazilians imports increased by 33% when compared to the same months in 2019. The demand is there, you just need a very practical solution so you can reach the demands of your customers.
Postal Service in Mexico - What remains of 2020 and what is come in 2021
Nowadays we must face the challenges arising from the pandemic caused by COVID-19. This implies that the Mexican Postal Service business continuity plan, and even the ones of postal services worldwide, consider dynamic adjustments in the logistical process of postal objects, which is impacting delivery time on the entire planet. Internationally, the capability and frequency of flights have been considerably diminished by several factors derived from the sanitary emergency, which has also led airports and borders to close.
At the local level, there has been a decrease in the postal staff, considering vulnerable personnel, as well as the correlation of the dependencies with which we have a relationship to continue with the postal process.
This is the case of the tax administration service, better known as customs, which in the operations of the international postal service, conducts the review of parcels for their clearance.
There are some challenges to solve in terms of deliveries in Mexico, such as:
- Fewer customs agents
- More international arrivals
- Longer Release and Delivery Time
According to Gamaliel Galegos (Communication and Dissemination Manager at Correos Mexico), "First we have to face the new dynamics of the postal market, which is oriented towards deliveries generated by purchases made through the Internet, and being able to go all-in into this segment of the national market, whose domain is currently held by private delivery services. Besides, we must promote more aggressive strategies to cover the e-commerce demand that comes through postal operators around the world, and then be able to compete in the processes carried out by other postal services.".
If you want to learn more about shipping to Latin America, you can check this article. It's important to remember that the products shipped to Mexico should also comply with the NOM (Normas Oficiales Mexicanas) who'd regulate the entry of certain products into the Mexican territory, such as products or services that might constitute a health or safety risk for the population, animals or the environment in general.
Latin American countries have a similar perception when it comes to regulations, customs and taxes - however we strongly believe that understanding the peculiarities and the context of the country you're selling to is the best way to succeed in it - so before expanding to a new market or region make sure you understand things not only from the seller's side but also from the customers' point of view.
Want to learn more about the Latin American Market scenario after COVID-19? EBANX's annual exclusive study is out! Curated by EBANX's experts, this study provides a contextualized portrait of the behavioral trends shaping the region's payments and cross-border e-commerce market, especially after Covid-19.