Black Friday: the biggest e-commerce date of the year in Brazil

Even though Brazil does not celebrate Thanksgiving, we are very much into Black Friday. Local retailers noticed that the American shopping holiday sparked interest here and decided to imitate their neighbors to the north in 2010. That year marked the very first Brazilian Black Friday.

The first to import the American tradition was a website called “Busca Descontos,” which aggregates coupons for discounts in Brazil’s top e-commerce stores. Only 50 retailers joined in, which explains the paltry results: the first Brazilian Black Friday raised roughly BRL 3 million (about USD 800,000).

The following year, supermarket chain Extra decided to extend special offers to physical stores, which essentially made the consumption holiday really begin. Sales reached BRL 100 million. The imported custom, it seemed, opened up a new window of opportunity.

Everything for half of double the price

But novelties can also bring out the worst in people. Soon, opportunist retailers realized they could use the brouhaha to scam consumers. Retailers would dramatically raise their prices in the weeks leading up to the big day, and then offer “magic” discounts of up to 70 percent. This nasty practice was so widespread that Brazilians jokingly referred to the promotions as: “Everything for half of double the price.” The holiday was renamed “Black Fraud”.

In 2017, over 2,000 customers complained about the same old scam tactics pulled by retailers, such as fake discounts and changes made to the price tag as the purchase is confirmed. In many websites, products with discounts are often “unavailable”—serving as bait for unaware customers who, once already facing a wide catalog of products, usually end up buying at least one thing they don’t need.

In 2013, Forbes called the date “a means for retailers to scam eager shoppers, happy to participate in an American tradition that is still as foreign to them as the moon.” Ouch.

Protecting consumers

Since then, authorities and retailers have been working hard to improve Black Friday’s reputation. And the effort seems to be paying off: this is now the most important online sales event of the year, beating even Christmas. Tecmundo, a technology news site, created in 2017 a browser extension that not only compares prices between sellers but also provides a graphic of the evolution of the price of a certain product over time.

Brazil's Black Friday: from scam to biggest e-commerce date of the year

Sales have been growing steadily: in 2018, predicted sales are of BRL 2.43 billion, a 15 percent increase in comparison with last year. On average, each consumer will spend BRL 607.50, 8 percent more than last year. The majority of Brazilians intend to buy something until November 23: 88.6 percent (up 8 percent).

That willingness to spend is explained by the latest update in the Consumer Confidence Index elaborated by think tank Fundação Getulio Vargas. It measures consumers’ trust in a positive economic scenario in the short- to mid-term future.

Brazil's Black Friday: from scam to biggest e-commerce date of the year

While online Black Friday is the main shopping event, in real life, Christmas is still king. While the former generates roughly BRL 2 billion in sales, the latter’s number is way bigger: BRL 9 billion. Consumers see the November occasion as an opportunity to buy something for themselves rather than ticking boxes on the Christmas gift list. Only 20 percent of consumers will buy presents on Black Friday.

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MoneyNov 21, 2018

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BY The Brazilian Report

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