Consumer are changing the face of shopping in developing

Consumer confidence levels are at
a three-year high. Some new formats and channels are thriving. Lower-price
cash-and-carry channels (atacarejos) continue to post double-digit growth, with
companies such as Carrefour and GPA focusing on this channel. GPA, for example,
plans to convert 15 to 20 hypermarket stores into atacarejos. E-commerce has
also been thriving as online sales increased 11 percent and mobile shopping
grew 90 percent in 2016. The number of Brazilians who buy online has been
growing in part because of lower prices online.

Sol President Temer
has been pushing an unpopular agenda and much-needed structural reforms with
the help of a supportive Congress. Federal spending control, fiscal
responsibility, and pension system reform should help contain the country’s
massive public debt and restore investor confidence. Proposals to simplify tax
laws and control corruption may also boost businesses’ confidence in Brazil’s
institutions. Annual spending on mobile shopping in 10 large emerging markets
(China, India, Indonesia, Philippines, Thailand, Vietnam, South Africa,
Nigeria, Brazil, and Colombia) is estimated at $275 billion. 1

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Figure 23: Number of smartphone users in Brazil (Statista, 2017)

6.2.4.2 Digital Stores and Online
Shopping Strategy

We addressed
connectivity issues by shortening the mobile buying process to three clicks. An
easy and fast way for customers to purchase goods is required to increase the
traffic by letting them to purchase at any time that they need a product. Once
in the application, three clicks will form the entire process of making a
purchase. One clicks for picking the product, a second one for putting it into
the basket, and a third and last to make the purchase. This will enhance the
customer experience which will also lead to a higher traffic. The possibility
to deliver products is also considered. For a higher service offer, the
application will jointly work with Google Maps allowing the customers to make
purchases wherever they are and not needing to spend time when entering
delivery addresses when buying. This is like what Uber (the transportation
application) does and which strategy has been successful in different markets,
including Brazil.

Mobile
phones are changing the face of shopping in developing markets. This growth is
forcing retailers to challenge their assumptions about market entry, their
roles in the retail value chain, and their influence on shopping behaviour. The concept is based on the notion
that markets pass through four stages of retail development (opening, peaking,
declining, and closing) as they mature, a process that typically takes 10 to 15
years.

The
development and use of a mobile phone application will be strategically applied
by ALID. This tendency forms part of a new tendency that has a considerable
influence in the way companies do business. This can help to save time and
money which is necessary to be competitive in the market. Before building a
physical store in Brazil, an application will be created by ALID, allowing
users to keep collect information after scanning the bar code of the products
they consider purchasing when going to supermarkets. They will be better
informed and the ALID will have a better understanding of the Brazilians
consumer behaviour and with easily develop and align its business processes
with potential customers. The idea is to provide the best service to them as
well as to make sure that the business will succeed as this is the phase that
most fail to address and develop processes and products before considering customer
requirements. And by updating processes according to customer requirements, the
peaking stage can be prolonged and with this make the product or business
competitive for a longer time by attracting more customers who also prefer the
company due to the high customer value that this one provides.

Skill
Brazil and make in Brazil is another strategy to gain trust of customers
because of its job creation opportunity. Because of doing this, ALID will be
perceived as a local business and become part of their culture and the same
time to be recognized as a German brand for which high quality goods are
expected and for which consumers are willing to explore and try. Brazilians
demand high quality products at low prices which is what this supermarket will offer
to the Brazilian market. By providing jobs, a bond is created between the
supermarket and the residents which results in long lasting relationships and
with this loyalty. ALID will not go to Brazil as a foreign brand but will enter
the market by understanding the culture and becoming part of it.

 

1 (A.T. Kearney, 2017)

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