Brazil uncovers the enormous commercial potential of Facebook

Facebook Brazil is quickly expanding its e-commerce portfolio, reconciling social networking and purchase activity. Last month they started testing a “buy” button and autofill functions for shoppers on their website. Then last week they hired a new VP for their Retail and E-commerce division, Marcelo Lobianco, making clear that they intend to expand their commercial operations.

The social networking website Facebook is a favourite amongst Brazilians. It reported more than 86 million users in April 2014, a penetration of 84% amongst the country´s 105.6 million Internet users. Facebook is an instrumental tool for all aspects of life in Brazil, including messaging friends, promoting events, exchanging news, creating discussion and establishing monetary activity.

According to the latest data from Facebook’s advertising platform, Brazil has the third largest number of Facebook users in the world, trailing only the US and India.

The numbers in Brazil are staggering. Facebook reached almost 133 million beauty fans in July 2014 (the sum of fans from all communities within the industry). It also had more almost 111 million food and 63 million beverage fans. Guaraná Antarctica (a Brazilian soft drink owned by InBev) alone had more than 17.6 million fans, while Coca-Cola exceeded 16.8 million. This is according to Facebook analytics firm Socialbakers.

Mintel’s E-commerce – Brazil, 2014 report revealed that 17% of Brazilian consumers were prompted to visit a retailer’s website by a Facebook advertisement in the past twelve months. This means that almost one in five Brazilian adults has clicked on a commercial link displayed on their Facebook page in the past year.

Our research also suggests that these users are very prolific buyers. Almost one in six people (15%) who have clicked on a Facebook adverts have purchased at least one FMCG good online in the past 12 months. This is compared to just 8% for the total population. Such behavior is even more pronounced for consumers aged 16-24 years of age, at 28%.

The commercial possibilities within Facebook are not limited to advertising and “buy” buttons. Industry suppliers can use their fan community for profiling and segmenting purposes. Or they can pay Facebook for the service in case their community is not large enough. For example, a clothing retailer targeted at young people can effectively advertise to the desired age group only. It can even tailor its campaign to specific personal traits. For example, it can advertise its surf collection only to those who have navigated beach-related communities and websites, and so on.

Companies can also create Facebook applications with multiple functionalities. Gol Linhas Aéreas, the Brazilian airline with the largest online sales volume, has set up a “Facebook store” allowing users to buy tickets, allocate seats, and manage their booking. It also gives users access to special promotions not available elsewhere.

Finally, Facebook is a powerful barometer of social, economic and behavior changes. For example, the community of Eduardo Campos, a key Brazilian presidential candidate, grew by more than 3,000% in just a few hours following his death in a plane crash last week.

Brazil is arguably leading the way into the future of e-commerce on Facebook. Other countries should keep an eye. They could learn a lot from a country strongly influenced, guided and even defined by media interaction and social networking.

Victor Fraga is Senior Analyst for Mintel’s Brazil report series. He has more than 13 years of experience in industries including technology, healthcare and the public sector. His previous roles have included companies such as Frost & Sullivan, and Guardian News & Media.