BRAZIL | Looking to get in on a business-to-consumer e-commerce market that according to some estimates is growing by as much as 25% annually, big international retail companies continue to set up shop in Brazil.
Source: Internet RETAILER
The latest companies include 1-800-Flowers.com Inc., No. 51 in the 2012 Internet Retailer Top 500 Guide, which is making an investment in a Brazilian online floral company, and Otto Group, No. 2 in the 2012 Internet Retailer Top 400 Europe, which is setting up a joint venture in the online apparel and accessories market.
While the dollar value of the investment wasn’t disclosed, 1-800-Flowers.com has taken about a 32% stake in Flores Online, a Brazilian online floral retailer founded in 1998. 1-800-Flowers.com isn’t saying much about the timing of the deal or other details such as what plans the company has in mind for Brazil, which eBit, a Brazilian e-commerce consulting firm, predicts could grow by about 26% to an estimated $12.6 billion in 2012 online sales from $10 billion in 2011. “Our customers expect us to help them with their social expressions both locally and around the world,” says 1-800-Flowers CEO Jim McCann.
Flores Online has annual sales of about $20 million, the company says. “We have a lot of similarity with them and they are just moving into gift baskets,” says a 1-800-Flowers spokesman. “We can work with them on marketing.”
Otto Group, one of the biggest retailing companies in Europe and the parent company of U.S. retail chain Crate and Barrel (No. 59 in the Top 500 Guide), also has big plans in mind for the Brazilian online retailing market. While exact terms of the deal weren’t disclosed, Otto Group is forming a joint venture with Posthaus, a Brazilian direct marketer with annual sales of about $129 million, to create an e-commerce site for the apparel and accessories space. “Brazil is an important milestone for the Otto Group in its international expansion and for further growth of the group,” says CEO Hans-Otto Schrader.
Under terms of the joint venture Poshaus will continue to sell its own private-label fashions on its e-commerce site, which launched in 2007. But going forward the Posthaus e-commerce infrastructure will sell products from such Otto brands as Bon Prix, a line of women’s apparel. “As in Russia, we expect that within five years in Brazil we will have achieved market leadership in fashion e-commerce and increased turnover to $500 million,“ says Schrader.