Benzinga | Jan 13, 2021 03:55PM EST

Despite Downturn, BofA Says Brazilian E-Commerce Remains Competitive

A BofA Securities survey of Brazilian e-commerce shoppers indicates a decline in purchase intent versus reported purchases across almost all categories. This contradicts the earlier view of active app user strength, according to the sell-side firm.

The Latin America E-Commerce Analyst: Robert Ford Aguilar said in an industry report that the decline in intent "may be attributable to seasonality and the reopening of retail, but also continued high unemployment, reductions in emergency aid and declining confidence."

The Latin America E-Commerce Thesis: Shopee's monthly active app user base in the country has exceeded that of Amazon.com, Inc. (NASDAQ:AMZN), Aguilar said in the note.

The company may be cannibalizing Wish and Alibaba Group Holding Ltd. (NYSE:BABA), the analyst said.

"Shopee's growth underscores exceptionally strong value perceptions in cross-border offerings, and the potential to further leverage that beachhead into a broader marketplace platform," the analyst said. There could be "redoubled cross-border efforts from incumbents," he said.

While Mercadolibre Inc. (NASDAQ:MELI) continues to lead "most subjective and objective metrics we track of broad-based e-commerce in Brazil," Amazon seems to be narrowing the gap, according to BofA.