(BNamericas.com) - With Presidential elections over in Brazil and the foreign exchange rate stabilizing, BNamericas asked the director of prominent B2C/B2B consulting firm e-bit (www.ebit.com.br) about the current status of the country's e-commerce market.

BNamericas: What kind of growth are you expecting in the B2C segment for 2H02?

Guasti: We expect a 50% increase in B2C sales for 2002, compared to 2001, with 1bn reais in total online sales. The [second] half has not been good for anyone, so we do not expect growth above the 50% registered for 1H02. Of course 80% of these sales will be from the top 10 players: Submarino, Lojas Americanas, Saraiva, Ponto Frio, Pao de Acucar, Shoptime, Somlivre and Siciliano.

Of these 10 only two are pureplays: Submarino and Shoptime. There is no more room in the Brazilian B2C market for new pureplays. Capital is scarce, and the major players have already established themselves as leaders.

BNamericas: Can you explain your research methodology?

Guasti: We issue questionnaires to shoppers of 400 of Brazil's 1,000 e-tailers. These 400 are responsible for 90% of online sales, excluding car sales and online auctions.

We ask these online shoppers about their satisfaction level, both pre- and post-purchase - to allow them to comment on delivery of the product - in addition to demographic information. We analyze 30,000 questionnaires a month. We reward users for answering the questions by offering them 'bits' which when accumulated can be turned in for free products.

We then give awards to sites that get the highest user ratings, and also give the monthly reports to all 400 sites for free, comparing them to their segment's average. In this sense we are like Brazil's consumer defense organization Procon. Our revenues come from those sites that then request more detailed reports.

BNamericas: How satisfied are online shoppers these days?

Guasti: The level of satisfied shoppers has increased to 86%, up from 75% two years ago.

BNamericas: What are the main differences between e-bit and Ibope e-Ratings?

Guasti: Ibope e-Ratings measures site audiences, not the online shopping experience. There is no overlap in what we do, and we have in fact worked with them in the past on joint projects.

BNamericas: Do you have any figures on the expansion of the online shopper universe?

Guasti: Over the past year there has been a 70% increase in the number of online shoppers, from 900,000 as of August 2001 to 1.4 million as of August 2002. Another good sign is the increasing penetration of the lower income segment, those who earn between 1,000-3,000 reais a month. The average ticket has also risen over the past year, at about 230 reais today compared to 180-190 reais a year ago.

BNamericas: How is business for you?

Guasti: We have 50 big clients that have already bought one of our products. We are betting on the months of November and December, because companies will spend some of their budgets that had been suspended during the Presidential elections.

BNamericas: What kind of consulting do you do for the B2B segment?

Guasti: We help B2B companies with userability issues and qualitative research. The look and feel of B2B sites is still very confusing. Most of our clients in this area are in the online insurance area, because they are investing a lot in the Internet.

BNamericas: Who are the major players in the online insurance market?

Guasti: [Brazil's three largest private banks in terms of assets] Itau Seguros, Bradesco Seguros, Unibanco Seguros, and Sudamerica and Porto Seguro.

BNamericas: What are the most popular products being bought online in Brazil?

Guasti: CDs and books head the list, then DVDs, palm pilots, flat screen TVs, computers, refrigerators, microwaves, stoves and cell phones. Car sale sites need to be improved still.

BNamericas: What are the major obstacles to B2C growth?

Guasti: Education. Students need to be taught about the benefits of the Internet, both as a research and shopping tool. Also the size of Brazil - people in rural areas can benefit greatly from online shopping, because they can buy things from stores not present in their areas. Another problem still is online security.

In this case it's funny because most people think of e-tailers as the villains with regard to credit card cloning, when in fact many times e-tailers are the victims, having to defend themselves from cloners in the offline world who try to buy things online with stolen information.

ABOUT THE COMPANY:

Founded in May of 2000-4, Sao Paulo-based E-bit's (www.ebit.com.br) main activities are its monthly e-tailing success questionnaires, and userability & e-mail marketing consulting service.