Challenges and Opportunities for the Digital Goods Industry in Brazil

From individual consumers to large enterprises, the digital goods industry has everything to keep growing – it just needs to be able to handle current challenges and seize the opportunities

Digital goods, products of a digital nature such as streaming services and online games, are growing rapidly in Brazil and worldwide, driven by the expansion of digital mobility and improved mobile connectivity, especially with 5G. As with any growing market, however, success in this scenario depends on knowing how to seize the main opportunities of today and deal with current challenges.

First, it is important to understand the dimension of the changes in the digital commerce scenario in Brazil, motivated, among other factors, by the 90% smartphone penetration rate among the adult population and significant e-commerce revenues, totaling US$111 billion in 2020. In the same year, 77% of adults (128 million people) have already made an online purchase. All this led the digital goods and services sector to have an estimated growth of 50%, with a revenue of $53 million, a highly expressive number.

These indicators show that the market for digital sales and products in Brazil is large and growing even more each day, especially given the almost absolute presence of mobile technology in people’s lives. Similarly, they also reinforce the importance of companies being fully prepared to deal with this fully digital context, where the customer buys and enjoys the product directly from their computer, TV or cell phone.

3 current challenges

In a scenario where the clients are highly demanding and the competition between merchants is stronger than ever, more than acquiring new customers, keeping them is key.

To achieve the desired results in sales and market consolidation in this segment, it is necessary to deal with some critical points. Among the various elements that must be considered, the following are worth mentioning:

Offering consumer’s preferred payment methods

First, it is fundamental to understand the importance of payment methods. When dealing with a dynamic and fast-paced environment such as that of digital products, working with payment methods that are consistent, fast, and preferably based at the customer’s location is fundamental.

In Brazil, Pix, boletos, and national credit and debit cards make up almost all online payments, with local credit cards accounting for 43% of the total while e-wallets already represented 17%. Therefore, it is essential that the company is ready to offer and manage these payment formats, especially with local currency (Real), ensuring a variety of options and the best possible experience at this stage for your customer.

Adapting to buying behavior

As your audience has varying degrees of digital maturity, it is important to look at intuitiveness of use, setting up a clear, easy, and secure interface. From the moment of advertisement, through payment and into product usage, it is a valuable differentiator to understand how your customer thinks, what they are looking for, and how they intend to use your service.

Fees and taxes

The Brazilian tax system is known to be complex and unfriendly, and this can be a problem for companies looking to grow. It is fundamental to count on the support of suppliers that understand this complexity, know the technical details for processing and payment, and build a strategy that takes all this into account in its operation, in an integrated way and without undesired surprises.

3 current opportunities

Having overcome these challenges, it is time to look at the excellent opportunities that permeate this market. With the population even more connected to digital products due to the social restrictions and lockdowns caused by the pandemic, this segment offers great sales possibilities, such as:

More audiences

With digitalization reaching various socioeconomic levels, such as classes C and D, companies are able to reach a market niche that previously could be difficult to access effectively.

E-learning

After the fast adaptation of educational institutions to digital learning because of the pandemic, this educational modality now has everything to remain strong in the market, with students already used to this format and with its benefits more evident. Both in regular education and in free courses, teaching through digital platforms brings a series of excellent possibilities.

Entertainment

Online games, streaming video and music, social networks: who today does not have at least one app for these services? With the remarkable growth of all these platforms (take TikTok, for example, which already has billions of installations), those who want to grow in this sector have a good chance of earning money by betting on entertainment solutions. This should be even stronger with the consolidation of 5G, which will guarantee more streaming power, allowing the consumption of richer content.

A land of possibilities – for those who are ready

An abundant consumer public, with a complex scenario, but full of opportunities: this is the digital goods market in the country today. Want to grow in this sector? Then count on who brings ready-made solutions for the local digital reality, with full adaptation to the Brazilian tax system, payments in local methods and local currency, and a complete system for your sales.

Learn more about our the potential, the trends, and the challenges of selling digital goods in Brazil and how to expand your business in our exclusive guide:

Guide: How to Sell Digital Goods in Brazil

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