Unmasking the Pain Points: Brazil's Quick Commerce Market Faces High Costs and Low Margins - Can it thrive against the Odds? : Ken Research

July 2023  

Propelled by the surge in digital adoption and internet penetration during the global COVID-19 pandemic, Brazil's quick commerce market has witnessed a phenomenal rise. However, like any success story, it faces its fair share of challenges. The market is grappling with soaring operational costs, demanding technological advancements, and slim profit margins, all casting a shadow of uncertainty over its future trajectory. Will this growth narrative persevere amidst these obstacles? Let’s find out together.

1. The number of internet users increase from 150 Mn to 160 Mn in 2021; ~14% of Brazil’s Digital Market is used in online food delivery

Brazil Quick Commerce Industry

About 81% of the population is consuming internet in 2021, compared to only 67.0% in 2018, reflecting a growth rate of 20.9% between the years.

Brazil had about 160 million Internet users in 2022, or 74.0% of the population aged ten or older.

The Brazil Digital Market is distributed between various sectors with Online Food Delivery comprising of 14.2% of total usage and 11.2% is used for Food & Personal Care means.

2. This was due to the imposition of lockdown by governing authorities that caused customers to adapt to online shopping which boosted Brazil’s Quick Commerce Market

Brazil Quick Commerce Industry

2.1 Moreover, Contrary to traditional shopping, Q-commerce services are available 24 hours a day, and higher availability of products

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3. The increasing usage of the Internet & latest technology in services among others have been driving the growth of the Quick Commerce market in Brazil

Brazil Quick Commerce Industry

4. However, some major challenges like high Operating Costs coupled with the latest technology requirements and low margins are faced by players operating in the market

Brazil Quick Commerce Industry

5. But still, with changes in consumer patterns and awareness of e-commerce services post covid 19 pandemic, the growth trend of the Brazil Quick Commerce market is only expected to rise in the future

Brazil Quick Commerce Industry

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Brazil Quick Commerce Market