The digital goods industry is a promising growth area worldwide. See in which markets it has grown the most
Digital goods are products that are not only sold digitally, but also delivered and consumed the same way. The so-called digital goods are a natural consequence, more than expected, of the current digital transformation that practically all sectors of society are going through, although to varying degrees of intensity.
When we think about B2C in this context, the reasons why digital goods are gaining so much space in Brazil are clear: consistent growth of mobile technology in the country, with an increase in the volume of smartphone users over the years, expecting to reach 161,80 million mobile internet users in 2021; greater coverage of wired and wireless connections; and greater familiarity of consumers with this reality. With this fertile scenario, the emergence of apps and services designed to explore the potential of an increasingly digital world has been growing sharply, feeding this market.
In addition to the already favorable scenario of expansion of digital products, the arrival of the Covid-19 pandemic has further strengthened e-commerce and the sale of digital solutions for productivity, connectivity, collaboration, education, and entertainment. Similarly, the higher supply of digital products has also led to increased competition among vendors, so that in addition to the functionality of the product itself, there is now a specific concern with the user experience as a whole, from download to payment, from interface to product function.
And which industries are particularly advanced in this regard? Which ones have stood out in this race? The following are some that are achieving great success and expanding their presence in Brazil:
1. Online games
The online gaming sector in Brazil is expected to reach the expressive level of US$2.3 billion in 2021, a 5.1% growth over the previous year. Only in mobile games, the expectation is that sales will reach US$1 billion, driven by the more than 88 million gamers in the country, which makes Brazil the largest market in Latin America and the 12th in the world.
These numbers make clear the strength of the segment, which capitalizes on the technical and social factors already mentioned, and tends to grow more and more with the evolution of mobile hardware and 5G connectivity, which is already starting to be deployed in the country.
When referring to mobile games, the Customer Insights by Newzoo, shows that it is played by 70% of the online population, and the country had an estimated revenue of US$1.66 billion for the market in 2020.
Consoles and PCs also have an important role in the sector, with new generations of equipment bringing more realism and complexity to games and renewing the generations of users.
If Digital Learning was already a consolidated trend, the pandemic made it an inescapable reality. With social distancing, the educational sector was hit hard and had to reinvent itself quickly. New access structures, classes and materials prepared to be offered online, distant relationships with their audiences, all of this generated a new experience.
Thus, the e-learning sector gained an unexpected space in the market, opening doors for several types of courses, improving the range of options for students, and stimulating a competition that should only bring even more good results for the segment. In 2020, a survey stated that 12% of internet users in Brazil did online courses and the sector had, until May 2021, an investment of US$ 380 million.
Those who listen to services like Spotify today probably don’t even remember the times when people used to download songs one by one through services like P2P LimeWire or, even more so, used to buy CDs to listen to them. Similarly, Netflix, HBO Max, Amazon Prime and others have also radically transformed TV for millions of people in Brazil and around the world.
With faster and more stable internet, devices with more quality and definition of image and sound, and attractive prices, streaming services have shown the power of the cloud and the decentralization of digital content, and are a perfect example of digital goods.
Payment is Key
Once the consumer decides on buying a digital good, whether a streaming service with recurring payments, online course or gaming product, they expect quick and user-friendly payment options. Not finding methods that meet their needs can be an impediment, causing cart-abandonment. For that reason, offering local payment methods in local currency is a key factor to upscale digital goods business revenue.
A survey from 2021 stated that, when buying from a mobile device, Brazilians’ preferred payment method was local credit cards (62%), followed by boleto bancário (15%), digital wallets (13%) and PIX (8%).
When offering local payment methods in local currency, the company is elevating their chances of selling, reaching more people and, consequently, increasing their revenue. It avoids cambial fluctuations, giving more security for the buyer by showing exactly how much the purchase will be, creates a relationship of trust and reduces dropout rates.
Digital is real
These examples show that the new reality is digital, and this should become stronger every day. Thus, companies seeking to engage with the consumer market need to be ready to operate within this dynamic, competitive, and constantly innovating environment. Focus on the user experience is, as said before, determinant for success, and those who can bring the best set, from usability to payment, will have more chances to surf this growing wave in Brazil.
But how can your company offer these local payment methods and better attract and engage Brazilian consumers? 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: