The social isolation imposed by the COVID-19 pandemic has greatly impacted people’s routines in every corner of the world, promoting practices that had been a reality for just a few people, such as remote working and online shopping. After the health crisis’ peak, we see people gradually return to offices, but e-commerce continues to increase.
From 2019 to 2022, online sales in Brazil totaled R$ 450 billion. This figure is more than double the R$ 178 billion yielded between 2016 and 2019. E-commerce is here not only to stay but to take a large share of sales in conventional channels.
Currently, national platforms compete directly with sales sites operating globally, which is why purchasing a product from another country has become usual. This type of digital trading is known as “cross-border e-commerce.” In 2021, online sales between countries reached US$ 785 billion, with estimates reaching US$ 7.9 trillion by 2030. This unprecedented boom in online retail goes beyond the purchase of everyday products such as electronics, cell phones, and clothing, extending to non-durable items such as food and beverages. There is even a term for this: “e-grocery.”
Whatever the product we are talking about, e-commerce offers benefits that go beyond the personal revenue yielded. The World Bank, for instance, highlights the significance of e-commerce platforms in reducing poverty, boosting global trade, stimulating export diversification, and creating jobs. By helping to overcome geographical barriers, online exchanges present themselves as an inclusive way of bringing companies and producers of all sizes and sectors into international trade.
Regarding small and medium-sized food producers, the platforms connect rural areas with international markets, providing an efficient and swift marketing channel amid the complex global supply chain.
We can see an example of this trend in China, where the Alibaba Group has created small rural communities called “Taobao Villages,” integrating e-commerce to sell local food products and handicraft pieces. This promotes social inclusion and increases the income of these communities’ members.
China indeed leads global e-commerce, with a 34% share of the world market. In 2022 alone, the Asian giant country traded US$ 2 trillion. By way of comparison, Brazil’s GDP last year was US$ 1.92 trillion. The United States and the United Kingdom are second and third in this ranking, with sales of around US$ 1.8 trillion and US$ 287 billion.
For Brazil, the world’s third largest food exporter and a leading producer of several agricultural commodities, e-commerce offers the opportunity to bring producers and buyers closer together. This shortening of the production chain means a silent revolution in the food distribution system, driving producers, cooperatives, and agro-industries to embrace online sales strategies at national and international levels.
Success in expanding online commerce across borders includes overcoming challenges related to marketing, packaging, logistics, distribution channels, partnerships, different time zones, and languages. On the other hand, selling directly to another country can offer more revenue, reduce transaction costs, and ensure process traceability. This allows to establish a dialog with new consumers, receive useful feedback, and control the brand’s image.
Differentiation is the key to standing out in e-commerce, where you can find everything you need. International customers in Asia and the Middle East are also consolidating their preferences: products with low levels of processing, with a high nutritional value, free from or with reduced ingredients (such as fats), diet/light, fruit and nuts, energy drinks, fortified and functional products, and products for athletes.
The range of Brazilian products can and should go beyond the obvious. Besides quality and diversity, Brazilian production has a “story to tell.” Trading where these features are appreciated and well-paid for is a wise strategy. Even better if they’re just a click away.
For consumers worldwide, buying food online is a trend. For rural entrepreneurs in Brazil, it’s a unique opportunity.
* Sueme Mori is the Director of International Relations at the Brazilian Confederation of Agriculture and Livestock (CNA).
** Originally published on Broadcast Agro/Estadão.