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Forbes
6/11/2012 | Ricardo Geromel
Brazil is being described as the next hot tech market as online shopping is becoming a habit to Brazils emerging middle class of almost 100 million people. Domestic demand is booming mainly because unemployment is at historic lows at the same time that wages are increasing and credit is widely available. Redpoint, the Samwer Brothers, Sequoia and many other venture capitalists are raising the stakes in Latin Americas largest economy. Before you bet in Brazil, make sure you know the basics by heart. This article brings a list of essential figures you need to know about e-commerce in Brazil:
Demographics
Brazil is the 5th largest internet market globally, 40% of Brazils total population is regularly connected to the internet. These 80 million Brazilians are already spending $13 bn online per year. With 129 million people online, Latin America represents 9% of total online population worldwide. 62% of all Latin America online population comes from Brazil alone. Broadband Internet access costs around $27 per month, compared to $30 per month in India and $10 per month in China. To make broadband internet access cheaper, President Dilma Rousseff has promised to invest up to R$1 bn (US$ 500 million) a year until 2014 in a national broadband plan. In Brazil, young people are spending disproportional time online. Age 15 to 24 25 to 34 35 to 44 45 to 54 55+ % total users 28.2% 31.9% 21.1% 11.4% 7.4% % Total Time spent online 33.1% 29.5% 19.3% 10.4% 7.6%
M-commerce
Mobile commerce is one of the most promising industries in Brazil. Although there are there are 116 cell phones for every 100 people in Brazil, online traffic generated from mobiles and tablets represent only 1.5% of all internet traffic. By comparison, worldwide global mobile traffic represents 10% of total online traffic, according to StatCounter Global in 5/12. In India, more than half of total online traffic comes from mobile devices. From the 1,5% of all web traffic that is generated from mobile devices, 42% comes from tablets and 55% mobile phones. Brazil had only 16 tablets available at the end of 2011, much less than smaller South
American neighbors, such as Argentina, which had 39 different tablets available. At the same time, Brazil accounted for more than one-third of the value of sales of tablets in all Latin America, according to Euromonitor. The main reason why there are not so many tablets available in Brazil is because of high import taxes. Ipad, the market leader in tablets, is assembled locally. Foxconn has a factory in Jundiai, near Sao Paulo, with a curious address: Steve Jobs Avenue. Recently, Foxconn was involved in a big scandal in Brazil after Terry Gou, Foxconn owner, called workers animals at a company meeting. Brazilians are not used to use their phones to shop. Below 1% of total online sales is made with mobiles phones. By contrast, in the US 8% of all online sales is made on mobile phones. By 2015, at least half of Brazils population, or 100 million people, will have a mobile phone with Internet access.
In So Paulo I pay around R$400 a month here for my blackberry plan, more than 4 times more what I paid in London.
Why is it so expensive? As everything else in the country of the future that depends on infrastructure, the government has not put the necessary effort to develop it. From the entire area of the country that is covered with mobile Internet, only 12,6% of the municipalities have two or more competing operators, revealed a study by the Chinese multinational Huawei. 3G penetration is only 17%, but it represents 99% year on year growth. Even though 3G is not yet completely developed, Brazils government is preparing to dole out licenses for 4G. Why? Because it doesnt want to be ashamed when hosting the World Cup in 2014 and the Olympic Games in 2016.
Social Media
According to Socialbakers, there are 48041640 Facebook users in the Brazil, which makes it #2 in the ranking of all Facebook statistics by Country. Penetration of population: Penetration of online population Average CPC: Average CPM: 23.89% 63.26% $0.28 $0.07
According to Semiocast, with 33.3 million twitter accounts, Brazil has the second largest number of twitter accounts, surpassing Japan now third with 29.9 million.
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Facebooks serves 1 out of 5 displays ads in Brazil. Top 6 players in advertisement display in Brazil: 1. Facebook 17.4% 2. Globo 14.1% 3. UOL 12.2% 4. Terra e Telefonica 11.4% 5. Google Sites 10.3% 6. Microsoft Sites -10.2%
Videos
As more people have access to faster internet, Brazilians are watching more and more videos. Total online videos watched: 4,704,910, +74% year on year growth Youtube dominates online video in Brazil, others are: Google VEVO Viacom Digital 67,4% 5,7% 1,2%
(Note that some of these companies are actually US-based funds that have varying degrees of presence in the ground here.)
Become familiar with Makesense (http://we.makesense.org). Basically, Makesense find solutions to social entrepreneurs by connecting them to individuals ready to take up their challenges. Their main advocate in Brazil is Paulo Monteiro. If you are in the US or in Europe and wondering how you can help a social entrepreneur in Brazil- or anywhere else- contact Makesense directly and they will present you with a list of social entrepreneurs that you could help from home, using the skills you already have.