Team eCommerce Next interviewed Deborah Rossoni from Apex-Brasil to get more insights on the biggest challenges faced by businesses that try to break into Amazon’s marketplace. Following is our interview with her:
What are some of the biggest challenges faced by businesses that try to break into Amazon’s marketplace? Competition and pricing? Logistics? Marketing?
With more than 300 million active Amazon customers from around the world, it’s no surprise that businesses of all sizes and industries want to be on the platform – but being successful on Amazon is not guaranteed. Businesses often find it challenging to distinguish themselves from the millions of competing businesses on Amazon. Consider that only 10% of businesses on the platform generate over $100,000 annually, and only 1.5 million of the 6.4 million sellers registered with Amazon are currently active, underscoring that even if a business is registered with Amazon, that does not mean they will be on the platform long-term.
Sellers trying to break into the market must develop competitive pricing strategies – but even more importantly, they need to offer personalization (more than 80% of U.S. adults want personalization from retailers), which of course is challenging with consumers from all over the world doing their shopping on Amazon. That’s why Apex-Brasil has partnered with Amazon to help Brazilian small businesses not only start selling on Amazon – but also understand what it takes to thrive on the platform. Through the Amazon Global Selling Program, more than 60 Brazilian companies received trainings from Apex-Brasil and Amazon about how to best use the platform, advice from Amazon on product descriptions to ensure they resonate with American audiences specifically (given that is the main ecommerce market the companies are focused on expanding into), and more.
Logistics support is provided by FBA – Fulfillment by Amazon – and other service providers suggested by Amazon and Apex-Brasil’s North American team.
Do foreign retailers – like those from Brazil – have an even harder time making a name for themselves with American consumers on Amazon? What challenges do foreign startups face specifically?
Yes, it can be an additional challenge for foreign retailers to be recognized by American consumers and the U.S. ecommerce market, given there is so much competition. On the technical level, many foreign sellers are not familiar with the legal or logistical procedures needed to sell internationally and, therefore, really benefit from the support of initiatives like the Amazon Global Selling Program. Regarding regulations, although Brazilian companies comply with all global standards for cosmetics and processed food, to sell in United States they need FDA certification, which takes time and money to complete the whole process.
Yet, we do know that Americans are open to buying goods from other countries, with cross-border ecommerce sales increasing 82% year-on-year in 2020 alone. That is a very big opportunity when you consider that 77% of Americans buy goods via ecommerce, and ecommerce in the U.S. is expected to grow 9% per year until 2026, when it will reach USD $993 billion (source: Apex-Brasil). This is the reason why we are helping Brazilian companies through the Amazon Global Selling Program partnership – the opportunities are abundant, and we are dedicated to elevating Brazilian companies with innovative, hot products on the global ecommerce stage.
You recently partnered with Amazon to add 50 Brazilian startups to the Amazon Global Selling Program. What does this partnership entail?
Actually, we targeted 50 companies, but the success of the partnership was so fantastic that we ended 2021 with almost 70 involved in the program, and we will invite more companies to apply and participate in 2022. This partnership extends personalized support and coaching to Brazilian ecommerce retailers as they join the Amazon platform for the first time and begin selling to a global audience, notably U.S. consumers. After being chosen for the program, the retailers first attended live and pre-recorded training sessions as part of a “boot camp” to learn the basics of operating an Amazon store. Currently, the businesses are operating their Amazon stores and receiving assistance from Amazon representatives with a focus on marketing tactics and merchandising. Apex-Brasil is leveraging its experience with international trade and development to help the companies manage the logistics and regulations that are needed to fulfill U.S. orders as well.
How many startups applied to be part of the program and how were these 50 specific startups chosen? Did you think they would do better on Amazon than others?
A total of 240 companies submitted completed applications, which a team of Amazon and Apex-Brasil representatives analyzed based on the strength of each application, existing online presence, and business health. The review team looked at a variety of indicators to predict the retailers’ likelihood of success, with special interest paid to ensure that they had an English-language online presence as well as prior experience with domestic ecommerce and exporting goods. An initial 50 companies were chosen for the first round of the program, and additional qualified applicants were invited to join as more spots became available. Due to the success of the program so far, we know we will be continuing it and look forward to helping more Brazilian companies break into Amazon during the second round of the program in 2022.
Were these companies already on Amazon, or this was their entry into selling on the platform?
Some of the companies had prior experience selling on Amazon – but only in Brazil. They are now beginning to export online to the U.S. because of this project. As such, these companies are very excited about the opportunity to receive personalized support as they make their entry into Amazon USA.
What has the success rate been so far for the 50 startups? Do they have any results to share about increased ecommerce sales, new audiences reached, etc.?
The project is in its first round and we are still analyzing the results. What we have learned so far is that about 45% of the companies are in an advanced stage, meaning they have established their presence on Amazon’s U.S. site, and many have already listed products and are shipping their goods to be fulfilled in the U.S. Around 35% are still planning their sales tactics, adapting labels, or obtaining necessary certifications.
We have yet to measure sales results as the first round of this partnership is still in progress. At the moment, Amazon and Apex-Brasil are helping the companies optimize their digital presence and develop marketing campaigns to gain traffic, improve their ratings and establish a strong U.S. customer base.
Do you have plans to add more startups to the program in 2022?
Yes! We will launch another round of the program in February with additional companies. Apex-Brasil and Amazon look forward to continuing this partnership into the future.
How does a program like this offer foreign startups a head start to success on Amazon? How does Apex-Brasil’s partnership with the Global Selling Program differ from other business development programs?
By partnering with Amazon, these companies gain access to true insider information and utilize the wisdom of experts to help grow their business. This particular program stands out from others because it leverages the individual strengths of both Amazon and Apex-Brasil to focus in on ecommerce best practices while providing the support vital to engaging in cross-border trade.
Consider some of the success other companies have had with the Amazon Global Selling Program. For example, one company from Thailand that was involved with the Global Selling Program for only 10 months went from 0% of sales on Amazon to 85% of total sales coming from Amazon. Another company from South Korea achieved 107% YoY growth for 5 consecutive years after joining the Global Selling Program. The sky is the limit for these Brazilian startups.
What ecommerce trends are you anticipating in 2022? Are there any specific areas you are telling these startups to focus on as we start the new year?
We expect ecommerce to continue growing in the coming years, with projected 9% annual growth in the United States through 2026. People became even more reliant on online shopping during the COVID pandemic, and we expect this trend to continue well into the future.
A recent report from Shopify predicted trending product categories for 2022, which range from cosmetics and apparel to DIY tools and automotive parts. We are excited to see that trending products will include toys, shoes, and bras/lingerie – which many Brazilian startups currently participating in our partnership with Amazon sell. We anticipate exceptionally high growth for these businesses.
What is Apex-Brasil? How do you support startups in the Global Selling Program and beyond?
Apex-Brasil is the Brazilian Trade and Investment Attraction Agency. We are the institution responsible for export promotion, foreign investment attraction, and we also help internationalize Brazilian companies.
As part of our internationalization work, we partner with Brazilian businesses to help connect them with international markets and investors to grow their businesses. Our overarching goal is to underscore on a global stage the critical role the country of Brazil plays as a burgeoning innovation hub. Some of the programs we organize for these companies in addition to the Global Selling Program include:
- e-Xport Program: Apex-Brasil has been supporting Brazilian ecommerce businesses that wish to grow their international reach via the e-Xport Program since 2017. Previous initiatives include a partnership with CPG product discovery platform RangeMe, which supported Brazilian suppliers as they first offered products internationally on the RangeMe ecommerce platform. We also work with Alibaba to promote Brazilian suppliers worldwide. Our annual event, the e-Xport Meeting, brings together global ecommerce specialists to discuss the trends and new technologies that will shape the future of ecommerce.
- StartOut Brasil: Since the program’s launch in 2017 to introduce Brazilian startups to 11 international markets, including London, Shanghai, and Toronto. These immersion programs consist of trainings about the requirements of international investments, pitch training sessions with industry specialists, and even business assistance to coordinate meetings with local investors.
- Web Summit: Apex-Brasil has been coordinating the Brazilian “pavilion” at Web Summit in Lisbon for many years to help introduce Brazil-based tech startups to the European market. We will have a presence at Web Summit again in 2022, with dozens of Brazilian startups.
About Deborah Rossoni
Deborah Rossoni, Competitiveness Manager at Apex-Brasil and manager of the Amazon Global Selling Program partnership in Brazil, has worked in the area of International Trade since 2007, having carried out several projects for the development of companies’ competitiveness, trade promotion and internationalization for several sectors, industry and services. She has a degree in business administration from Universidade Federal de Uberlândia, with postgraduate courses in Foreign Trade and Internationalization from FGV and Business Management from EAESP-SP.
Apex-Brasil is the Brazilian government’s trade and investment promotion agency. Apex-Brasil supports international investors as they analyze the opportunities to establish a plant in Brazil, start a partnership with a Brazilian company or commit capital in Brazil through funds and companies. Apex-Brasil’s goal is to satisfy investors’ needs and to generate results as they attract technology, innovation, new companies and generate jobs in Brazil.
Apex-Brasil is part of the Brazilian Ministry of Foreign Affairs (Itamaraty), which has 120+ offices around the world. Apex-Brasil also works in close collaboration with other Ministries, regulatory Agencies, class entities, and more. To date, Apex-Brasil has already served 1300+ investors to announce 118 projects worth USD $23 billion in Brazil.