The rise in smartphone smuggling in Brazil is becoming a significant concern, with one in four devices sold in the country entering through illegal means, according to analyst firm IDC. Most of these smuggled phones come from Paraguay and are primarily from Chinese brands like Xiaomi, Oppo, and Realme, which are popular for their lower-cost devices. The percentage of devices sold through the grey market has steadily increased, from 9% in the first quarter of 2023 to 25% in the fourth quarter, equivalent to 6.2 million smartphones.
Abinee, the Brazilian Electrical and Electronics Industry Association, has raised alarm about the growing issue of smartphone smuggling in the country. President Humberto Barbato emphasized the need for more government intervention to combat this practice as it has taken on “unacceptable proportions.” There are several problems associated with smuggled devices, such as the lack of certification from the National Telecommunications Agency, missing manufacturers’ guarantees or technical assistance, and the absence of safety and operational tests.
Consumers are misled by information published by marketplaces, the main channels for smuggled phones, as they are not aware of the risks associated with these devices. Although some digital platforms have been taking steps to block the sale of illegal devices under an anti-piracy plan, formal agreements with major marketplaces like Mercado Livre and Amazon have yet to be reached. Abinee believes that effective supervision of marketplaces is crucial to curb the irregular practice of smartphone smuggling from Paraguay into Brazil.
The impact of smartphone smuggling goes beyond consumer risks and safety concerns. Abinee estimates that Brazil will lose 4 billion reais ($791 million) in 2024 due to tax evasion related to these illegal activities. Additionally, around 400 million reais ($79 million) worth of research and development investments by manufacturers are not being made due to smuggling, leading to potential job losses in the industry. Barbato highlighted that illegal practices like smuggling encourage organized crime, corruption, and violence not only on the borders but throughout the country.
In conclusion, smartphone smuggling in Brazil is a growing issue that requires urgent attention from the government, industry players, and digital platforms to enforce regulations and prevent the entry of illegal devices into the country. The impact of this illicit activity extends beyond economic losses to potential risks for consumers, job losses, and broader societal implications related to organized crime and corruption. Abinee’s call for more energetic actions to combat smartphone smuggling highlights the need for collaborative efforts to address this pressing issue and protect the interests of consumers and the economy.
