The Evolution of E-Commerce in Brazil: Innovation, Personalization, and Efficiency

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We are living in an era of innovation and expansion in e-commerce in Brazil, driven by a generation of disruptive startups. These companies are rewriting the way people shop. As the founder of an online store for perfumes and cosmetics in the last century, I experienced the birth of e-commerce in Brazil and had the privilege of closely observing the early days of this industry. I witnessed numerous innovations and saw companies, ideas, and concepts emerge and disappear.

An interesting fact was that the online store I founded ended up being the first client of Vtex, which at the time still focused on the textile market, but completely pivoted its business and became a global e-commerce giant, even listed on the American stock exchange. Someday I might write more about this lesser-known beginning of Vtex and how my story intersects with the founders' back in 2001. Now, as a General Partner at Verve Capital, I am excited to be part of this new phase of e-commerce.

With an estimated revenue of R$185 billion in 2023, according to the Brazilian Association of E-commerce (ABComm), the sector has established itself as one of the most relevant in the world, with millions of recurring consumers and numbers that continue to grow. Just as I witnessed in the early days of e-commerce, where every day was unmapped territory, "uncharted waters", we are now exploring a new era of e-commerce, relying more and more on tools for deep personalization, agile checkout processes, differentiated and targeted ad formats, among other innovative features.

In this dynamic scenario, some companies in our portfolio stand out, such as Malga, for example, a payment processing platform that has been helping improve the sales conversion of different clients in various industries in their online transactions. Its relevance is particularly notable in large-scale events like Black Friday, a period in which ABComm predicts a 17% increase in sales for 2023. Malga demonstrates how innovative payment technology solutions can significantly boost business results, adapting to the emerging needs of the digital market.

Newtail is another company delivering incredible results every quarter and already serving clients like Unilever, Johnson, Coca-Cola, BRF, Hortifruti, and Mondelez. The Rio de Janeiro-based company is experiencing substantial growth in market share and revenue for its clients through Retail Media. This form of digital advertising involves brands promoting their products directly on retailers' websites and platforms. By doing so, they can connect with consumers at the point of online sale, utilizing the retailer's traffic and data to deliver more personalized and relevant advertisements. We recently discussed a bit more about Retail Media here.

Hubii is another incredible company contributing to the growth of e-commerce in Brazil. It uses a business model that focuses on the integration between e-commerce and physical retail, similar to the "New Retail" approach that transformed retail in China in recent years. Through its platform, Hubii empowers small retailers to capture a share of the online market without losing their local presence and relevance. This not only enhances the reach (revenue) of these retailers but also facilitates the democratization of access to e-commerce, allowing more sellers and consumers to participate in the digital economy with minimal investment.

We are witnessing a significant shift in e-commerce, which has evolved from a simple shopping alternative to becoming an integral part of the daily lives of millions of Brazilians. The relentless pursuit of increasingly personalized, integrated, and efficient experiences will undoubtedly drive the emergence of a wave of remarkable technology companies in Latin America in the coming years.

We have recently witnessed a clear maturation of the Venture Capital ecosystem in Latin America, laying the groundwork and strengthening the industry's backbone to foster the emergence of significant local tech companies. As the head of Verve Capital, I am eager for the upcoming years and the exciting developments that will unfold. I will always seek to contribute to the strengthening of the Venture Capital ecosystem in Brazil, which, in my view, is still in its infancy. Much more to come! #VamosLatam

AUTHOR: MARCELO FRANCO, VERVE CAPITAL FOUNDER