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Opportunities in Brazil 2015 Mid Year Update
| Date post: | 16-Aug-2015 |
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Business |
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Opportunities inBrazil 2015
Mid YearUpdate
Brasil Online 1995-1996 ZAZ 1996-1999 Terra 2000-2005 DM9DDB 2006 iG 2007-2013 Latam Connection 2013
About the author
Caique Severo
Opening international marketsfor digital companies
Market Intelligence
Business Development
Sales Representation
www.latamconnection.com
Agenda
1. General data about Brazil
2. Internet and technology: broadband and mobile
3. Digital media: social media, video, ecommerce
4. Challenges of doing business in Brazil
General data about Brazil
2015 204 million
people
Source: IBGE, june 2015 - http://www.ibge.gov.br/home/default.php
20147th largest country in GDP
US$ 3 trillion
purchase power parity standard
Source: Finance Ministry - http://www.fazenda.gov.br/area-destaques/economia-brasileira-em-perspectiva-30.12.2014
Source Central Bank of Brazil: : http://www.bcb.gov.br/pec/appron/apres/Apresentacao_RTI_06_2015.pdf
2015
Decrease in GDP
- 1.1%Estimated
Source: IBGE April 2015: http://www.ibge.gov.br/home/
2015Unemployment
6.7%
Big shift in economic classes
Million of people in each economic class
Source: Finance Ministry, December 2014 - http://www.fazenda.gov.br/area-destaques/economia-brasileira-em-perspectiva-30.12.2014
Class AB
Class C
Class D/E
Growth in higher education% of people ages 25-34 with at least an undergraduate degree
Source: IBGE
2004 2013
15%
8%
Cars sales doubled in a decadeNumber of new cars on the streets
Source: Anfavea, November 2014 - http://www.anfavea.com.br/tabelas.html
Domestic airline travel grew 164% in 9 yearsNumber of passengers
Source: ANAC, November 2014 - http://www2.anac.gov.br/estatistica/demandaeoferta/DemandaeOferta.asp
Domestic
November 2005 November 2014
7.952.936
3.011.295
Inequality is lower but still high% of income per capita by deciles of income
Source: IBGE - ftp://ftp.ibge.gov.br/Indicadores_Sociais/Sintese_de_Indicadores_Sociais_2014/SIS_2014.pdf
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
42%
15%
11%8%
7%6%5%
3%3%1%
46%
16%
10%8%
6%5%4%3%2%1%
2004 2013
The 10% richer gets more than 41% of all income
Demographic bonus
Decrease in number of child per womanSource: World Bank, Google, others
Demographic bonus
2010 2020
More people in the economic active age
Men WomenMen Women
Internet and technology adoption
Internet users in Brazil
Non-users70
Users95
Million of people over 12 years old
Source: F/Radar 2014 - http://www.fnazca.com.br/index.php/2014/12/16/fradar-14%C2%AA-edicao/
Internet users by social economic class
DE7
C48
AB38
Million of people over 12 years old
Source: F/Radar 2014 - http://www.fnazca.com.br/index.php/2014/12/16/fradar-14%C2%AA-edicao/
Internet users by age
73% are under 35 years old
60+346-59
8
36-4514
26-3524
18-2524
12-1720
Million of people over 12 years old
Source: F/Radar 2014 - http://www.fnazca.com.br/index.php/2014/12/16/fradar-14%C2%AA-edicao/
Fixed broadband has more than24.6 million subscriptions
Source: Teleco: http://www.teleco.com.br/blarga1.asp
april 2014 december 2014 march 2015 april 2015
24,624,4
23,9
22,9
Broadband penetration still growing
Brazil Chile Argentina
54%50%
42%
% of households
Source: ITU, State of Broadband 2014 - http://www.broadbandcommission.org/Documents/reports/bb-annualreport2014.pdf
Mobile
3G access near 150 million
Number of access points (000), 3G devices
1T14 2T14 3T14 4T14 Jan/15
148.837144.668
123.203118.474
105.402
Source: Teleco: http://www.teleco.com.br/3g_brasil.asp
Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
As low as
US$ 0.3 per day
Pre-paid mobile broadband
Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
Twitter, Facebook, WhatsApp
Free usage
Social media
Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
4G
7.7 milliondevices connected in January 2015
3/4 of phones sold are smartphones
4,7
15,1
Smartphones Feature phones
Source: IDC, december 2014, http://br.idclatin.com/releases/news.aspx?id=1777
Sales by type in third quarter 2014
Mobile phones are the most used device to access the internet at home
% of internet users
Source: F/Radar
Tablet Celular Portable PC Desktop PC
42%40%
52%
12%
Tablets sold per year(Million)
Source: IDC
2010 2011 2012 2013 2014 Estimated 2015
8,1
9,58,4
3,1
0,80,1
Access through tablets% of internet users
Source: F/Radar
2013 2014
14%
9%
Best seller tablets
78% of sales are under US$ 200
51% of sales are under US$ 120
Semp Toshiba
US$ 79Android 4.2.2
7” screen 8GB drive
CCE
US$ 128Android 4 9” screen 4GB drive
Multilaser
US$ 87Android 4.2 7” screen 8GB drive
Usage by type of device
Source: comScore: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
Major players on mobile
Marketing campaigns, app development, ad network (Hands)
Marketing campaigns, media buying
End user apps (PlayKids, iFood), mobile payments, sms messaging
Advertising
Digital ad spending
Brazil is by far the largest marketin Latam
Emarkete: rhttp://www.emarketer.com/Article/Total-Media-Ad-Spending-Brazil-Pass-20-Billion-This-Year/1012339
Digital ad spending
Total online ad market: US$ 2.6 billion (2014)
IAB Brasil: http://iabbrasil.net/assets/upload/boas_praticas/1431624853.pdf
Search + Classifieds 1.258
Display + Social Media 903
Video 261
Mobile 232
+14% estimatefor 2015
Media
Portals Verticals Legacy print
Retargeting, DSPs,Ad Networks and segmentation
Retargeting, performance advertising
Behavioral targeting
Demand Side Platform
Affiliate marketing, CPA
Blog ad network
Data Management Platform and data provider
Social Media
Social media is the biggest category
Source: Comscore,May 2015: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
Time spent on social media
Source: Comscore,May 2015: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
Average minutesper visit
Social Media audience
Source: Comscore,Maio 2015: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
Online video
64 million people access online videos
Source: Comscore, september 2014 - http://www.comscore.com/por/Insights/Presentations-and-Whitepapers/2014/2014-LATAM-Digital-Future-in-Focus
Leader of video engagement in Latam
Minutes per viewer Reach of the total population
Source: Comscore,Maio 2015: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
Video ads engagement growth
Source: Comscore,Maio 2015: http://www.comscore.com/por/Imprensa-e-eventos/Apresentacoes-e-documentos/2015/2015-Brazil-Digital-Future-in-Focus
E-commerce
Ecommerce
US$ 11.16billion (+24%)
2014
Source: eBit http://www.ebitempresa.com.br http://www.ebitempresa.com.br/clip.asp?cod_noticia=3958&pi=1
9.7%Mobile Commerce
Fashion and beauty are leading categories
Source: e-bit/eMarketer - http://www.emarketer.com/Article/Brazil-Ranks-No-10-Retail-Ecommerce-Sales-Worldwide/1011804?ecid=SOC1001
% of total transactions, first half of 2014
Room for growth in mobile commerce% of purchases made on mobile devices
Source: Criteo
Brazil US UK Japan
49%
41%
27%
10%
E-commerceFashion/Clothing Cosmetics Electronics
CarsAuctions/Trade Comparison
General
Challenges of doingbusiness in Brazil
BureaucracyDays to open a business
OCDE
Latam & Caribbean
Brazil 102,5
30
9,2
Source: Doing Business 2015
BureaucracyHours spent managing taxes
OCDE
Latam & Caribbean
Brazil 2600
365
175
Source: Doing Business 2015
Tax costsTotal taxes (% of profits)
OCDE
Latam & Caribbean
Brazil 68,9
48,3
41,3
Source: Doing Business 2015
Office space rent(US$ / cubic meters)
Lima
Buenos Aires
Caracas
São Paulo 90,8
46
30
21,5
Big Mac Index (US$)
Mexico
2.86Argentina
3.88Colombia
4.48Brazil 5.28
Traffic in São Paulo5/23/2014: 214 miles (344 km)
Conclusions
Opportunities Challenges
• Growing consumer base
• Big mobile adoption
• Demographic bonus
• Bureaucracy
• High taxes
• High operating costs
Thank youwww.latamconnection.com
