BRAZIL SPOTLIGHT

Digitizing the Corner Shop

Brazil’s corner shops—known as mercearias—are vital to the local economy

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Photo courtesy of Mêrce do Bairro

We spoke to 205 corner shop owners and 204 of their customers. Here’s what we heard.

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Photo courtesy of Mêrce do Bairro

Brazil’s corner shops are here to stay: 92% of customers plan to shop as much or more

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Photo courtesy of Diana Narvaez

83% of customers shop multiple times per week at their local corner shop, while only 1% shop online for their groceries

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Photo courtesy of Mêrce do Bairro

The corner shop plays a valuable role in the community, providing convenience, customer service, and credit

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Photo courtesy of Diana Narvaez

“I buy my bread here every day. The shopkeeper knows my order and has it waiting for me each day: 4 bread rolls.”

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Photo courtesy of Mêrce do Bairro

Shopkeepers are adopting digital tools and are eager for more

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“The demand for technology greatly increased during the pandemic. Now there’s an app for everything.”

“I would like to have an online sales system integrated with inventory management so the customer can see what is available and purchase online. It would make my work much easier.”

Half of shopkeepers say they are very comfortable with digital tools, yet barriers remain

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“I have to keep up with technology. I see the world is evolving. I can’t be left behind.”

25% of customers had no complaints with their corner shop, while others cited a desire for more product variety

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Shopkeepers report their two biggest pain points are time spent purchasing inventory and lack of access to formal credit

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“Business accounting is the most complicated thing I do—inventory control, pricing. I do everything manually and it takes a lot of time and energy.”

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Corner shops accept a range of payments, with nearly all accepting digital payments and bank cards, and 4 in 10 accepting food vouchers

Stats Stats

Photo courtesy of Diana Narvaez

“My corner shop provides me with a credit tab. This is crucial for me because of my financial situation.”

Two-thirds of shopkeepers lack access to a formal bank loan, and 7 in 10 cite high interest rates as a barrier, demonstrating a financing gap

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Embedded finance can unlock opportunities that have eluded traditional banks for centuries

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Brazil’s corner shop merchants have ambitions to grow and improve their stores so they can continue to play a vital role in their communities. At Flourish, we believe digital platforms have an opportunity to support them in this journey.

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Merchant and Customer Voices: Who We Spoke To

205 Mercearia Merchants in São Paulo

GENDER
46%
  Female

54%  Male

AGE
2%  
<20
17%  
20–29
26%  
30–39
31%  
40–49
19%  
50–59
3%  
60–69
2%  
70+

STORE TENURE
19%
  Less than 1 year

10%  1–2 years
11%  2–3 years
13%  3–5 years
47%  5+ years

NUMBER OF STORE EMPLOYEES
Including Shopkeeper & Family
35%  
1–2 workers
34%  
3–4 workers
18%  
5–6 workers
13%  
7+ workers

204 Mercearia Customers in São Paulo and Osasco

GENDER
57%  Female

43%  Male

AGE
4%  
<20
24%  
20–29
25%  
30–39
17%  
40–49
13%  
50–59
10%  
60–69
7%  
70+

ABOUT THIS REPORT

Flourish Ventures launched this research to better understand corner shops across the globe and share learnings on how digital firms can serve their needs.

In partnership with research firm 60 Decibels and e-commerce platform Mercê do Bairro, we surveyed 205 Brazilian corner shop owners and 204 of their customers to learn firsthand about their business pain points, competitive threats, aspirations, and digital behaviors.

Authors: Arjuna Costa, Diana Narváez, Stella Klemperer

Flourish is a global venture firm investing in entrepreneurs whose innovations advance economic opportunity and financial health for individuals and small businesses. We partner with industry leaders in research, policy, and regulation to better understand the underserved and help foster a fair, more inclusive economy.

flourishventures.com

60 Decibels is a tech-enabled social impact measurement and customer insights company working in over 75 countries. They combine deep impact measurement expertise, an integrated technology backbone, and a global network of 900+ researchers to make it easy for companies and organizations to listen to the people who matter most.

60decibels.com

Mercê do Bairro is a virtual retail chain that improves small grocery store revenue and efficiency by offering digital procurement, access to credit, inventory management, and brand makeovers.

mercedobairro.com