Online Private Club Privalia Betting Its Model Will Bloom in Brazil

Privalia With almost 193 million inhabitants and a prospective growth rate of 6% for 2010, Brazil would appear to be one of the most attractive countries in terms of investment of foreign capital.

The consolidation of the middle class as the majority group has strengthened the e-commerce sector and at present 17.6 million people are known to purchase a wide range of items over the Internet.

The use of the Internet has risen rapidly in Brazil, and currently, with around 68 million users, it has shot ahead of the UK and Spain, with 51 million and 29 million Internet users, respectively.

According to Forrester Research, on-line fashion sales in Western Europe are expected to grow 10% between 2008 and 2012 and 4% in the United States, the leader in world e-commerce development.

However, whilst the e-commerce growth curve is beginning to consolidate and stabilize, the private sales Club sector has registered strong growth and shown a great capacity for development.

Brazil as a Hot Spot

The strongest sector in this country is undoubtedly that of electronic commerce. According to e-Bit consultants, Internet purchases for the year 2009 increased by 30% versus the previous year, with transactions surpassing US$ 6 billion  (10.6 billion Brazilian reais).

Around 17.6 million people stated they had made Internet purchases, which represents 26% of all Internet users in Brazil.

Forrester Research currently estimates the size of the on-line clothing sales market in Brazil at 325 million euros, and it expects it to reach US$ 650 million in 2012.

In percentage terms, this translates into an annual growth of 32.5% from 2008 to 2012, surpassing South European markets such as Spain with an expected 24% growth for the same period.

In 2009 Privalia, run by the company’s co-founders Lucas Carne and Jose Manuel Villanueva, expanded its business to Latin America, starting with Brazil.

Carne explains: “The Latin American market, with Brazil as a starting point, is the most attractive for investors, due to its very large population, the progressive increase of its middle class and the high growth rate of Internet sales and e-commerce market. This, together with different economic cycles vs. Europe, has enabled the company to diversify and to be less exposed to the current economic European situation. At Privalia, we foresaw this opportunity and were proven right”

Furthermore, subjective factors such as leanings towards brand names and a passion of fashion also contributed towards Privalia  successfully recognizing Brazil as one of the growth engines, expected to generate the largest income in 2013.

Brazil multiplied its invoicing fourfold during the first 12 months, as compared to invoicing in Spain and Italy for the same period – Privalia Brazil multiplied its income by twelve in the first six months of 2010 compared to the results for the first six months of 2009.

At present it has over 1.5 million members. Its distribution center has increased fivefold in just two years in order to cope with the mentioned expansion. At present there are over 140 “privalios” working for the company, when just 18 months ago there were only 5.

During the first campaign for recruitment of members in Brazil, the company registered more than 270,000 members even before sales began, thanks to a strong on-line marketing strategy which reflected the viral nature of the market and the potential of the region

Privalia is a private club which organizes periodical on-line sales of leading name products over the Internet, at discounted prices exclusively for members.

It was created in 2006 in Barcelona and at present has more than 4 million members worldwide, converting it in leader of operations and a reference point for this sector.

Privalia has tripled its invoicing in 2009 and operates in Spain, Italy, Brazil and Mexico under a multi-regional company regime.

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