Details about Brazil - one of the BRIC countries - emerging markets

1. Global Project
Rajkumar Subaschandra
Prof: Dr. Timothy H Greer
Brazil
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2. (Hello!)
Brazil
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3. Highlights of Brazil
One of the
BRIC
countries
19 million
smart
phones (9%
of total mkt)
FIFA World
Cup
2014
Brazil
Olympics
2016
Near shoring
(Rio de
Janeiro)
Swelling
Lower
Middle Class
No. 5 in Top
Internet
Users
Brazil
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4. National Context
Facts
Major Cities
• Language: Portuguese
• Population: 196.7 Million (2011)
•5th largest country
• Biggest country in South America
• Brasilia (Capital) – 2.6 m
• Sao Paulo - 11.6 m
• Rio de Janeiro – 6.3 m
• Salvador – 2.7 m
Brazil
Key Figures
Major Industries
• Interest Rate: 8.8%
• Unemployment: 6.8%
• Inflation: 4.5%
• GDP Per capita: $11,210
• GDP: $2.47 Trillion (6th largest)
• Currency: Brazilian Real (BRL)
• Agriculture
• Services
• Mining
• Manufacturing
• Hydroelectric power
• Petroleum
Brazil
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5. Key Findings
• Brazil's economic footprint, combined with having the largest
domestic IT consumption in all of Latin America, as well as its
status as a BRIC nation make it a natural short-listed choice when
evaluating potential destinations for IT services.
• Brazil needs to align government priorities with academia and the
commercial sector to harness all its strengths to drive the
transition from BRIC promise to practical reality. The window of
opportunity is small, and the country must act quickly.
• Brazil's challenge is to be able to plan and execute to meet demand
at the pace of offshore growth rates, with key skills at the right
place, time and price (not necessarily the lowest price).
Brazil
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6. Brazil
Brazil
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7. Global Project - Brazil
PART 1
Brazil
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8. Technology Characteristics
• The presence of computers in Brazilian homes rose from 35% in
2010 to 45% in 2011
• Internet access was present in 38% of homes in 2011, an increase
from 27% in 2010
• 19 million smart phones in Brazil – 9% of total mobile phone
market
Brazil
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9. Socio-Economic Characteristics
• Brazil’s urbanization reaches beyond the high profile poster cities
of Rio de Janeiro and Sao Paulo.
• With 86.5 percent of the country’s population inhabiting urban
areas, Brazil is one of the world’s most urbanized large countries.
• Including Sao Paulo and Rio, Brazil counts 15 cities with
populations of more than one million people each.
• Comparison of Brazil and USA
– Consumer Prices in Brazil are 11.39% lower than in United States
– Consumer Prices Including Rent in Brazil are 17.38% lower than in United States
– Rent Prices in Brazil are 41.61% lower than in United States
– Restaurant Prices in Brazil are 28.70% lower than in United States
– Groceries Prices in Brazil are 35.66% lower than in United States
– Local Purchasing Power in Brazil is 70.21% lower than in United States
Brazil
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10. Political Characteristics
• Stable Political system
• Stable political face levels of bureaucracy, taxes, crime and
corruption that typically are far greater than in their home markets
• Low risk of Terrorist attacks
• Brazil ranks among "the best one-third" of 178 countries, according
to the World Audit Organization (democracy 51, press freedom 56, corruption 57)
• The levels of political risk in Brazil are now far lower than a decade
ago
• Foreign companies need to be aware of the high costs of labor and
taxes in Brazil
• One of the main problems for foreign investors in Brazil is
corruption in Brazilian government ministries
Brazil
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11. Language Characteristics
• Portuguese is Brazil's official language.
• English is the foreign language with the highest demand, but
schools fail to provide high proficiency levels, requiring
complementary courses offered by private language teaching
businesses, which are not affordable to all. This results in a
relatively small English-speaking labor pool.
• French and Spanish are also widely taught. The strong presence of
foreign colonies makes Japanese, Italian and German language
capabilities also available.
• Though English is the primary foreign language, majority of them
are not comfortable conversing in English.
Brazil
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12. Educational Characteristics
• The literacy rate for people aged 15+ is 89%.
Eight years of education are mandatory, but
adults have an average of 4.9 years of
schooling
• Approx 16.5% of the population attends college. Higher education
enrollment has more than doubled in the past 10 years to more
than 5 million each year.
• About 10% of the total educated labor force has completed higher
education, and about 30% has completed secondary education.
The deficiency in higher education availability is complemented by
private IT technical high-school programs.
• The government spends 4.2% of GDP on education today, but has
stated that it plans to raise this to 5.0% in 2012.
Brazil
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13. Currency Characteristics
• Currency: Real (R$)
• US$1 = R$2.04 (as of 11/11/12 – http://finance.yahoo.com)
• The Real has been appreciating steadily and now floats at around
1.7 per U.S. dollar. This represents a 25% increase in costs over two
years for American buyers of Brazilian services
• Brazil has relatively competitive salary rates among the various
countries in Latin America. Average annual salaries are:
–
–
–
–
IT Programmer:
IT Project Manager:
Software Engineer:
IT Manager:
$20,000 to $40,000
$53,000
$32,000
$77,000
Brazil
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14. USA vs Brazil
All currencies are in US $
Items
USA
Brazil
$15.09T
$2.477T
Economic Growth Rate
1.50% per year
2.80% per year
GDP – Per Capita (PPP)
$48,386
$12,788
36.80 years
28.90 years
Gasoline (1 gallon)
$3.66
$6.66
Water (1.5 litre)
$1.77
$0.98
McDonalds – combo meal
$6.00
$7.45
Tomato (1Kg)
$3.00
$1.47
1 Pair Levis 501
$40.00
$97.88
1 Pair of Nike shoes
$75.00
$146.53
$900/month
$488/month
$3,000/month
$732/month
GDP
Median Age
Apartment (1 bed) – City
Median Disposal Salary
Brazil
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15. Global Project - Brazil
PART 2
Brazil
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16. Overview of Internet Use
•
•
•
•
79 Million Internet users (2011)
9th in world on internet use
Top level domain - .br (dot br)
Online population:
– 39% of total population in 2011
– Expected 42% in 2012 and 48% in 2016
• 10% of households have access to internet
• 18th place in e-Government (1st USA, 2nd Australia and 3rd New Zealand)
• In December 2011, Brazilians viewed more than 4.7 billion online
videos, an increase of 74% in the past year
Brazil
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17. Popular Activities on the Web
Social
Networking
Brazil is becoming highly social, with social media penetration expected to reach 87.6% of
internet users in 2012 - In 2012, 13.5% increase in Social Network users
Brazil will account for more than half of total B2C ecommerce sales in Latin America through
2013.
In October 2011, eMarketer forecast that 34% of internet users in Brazil, or 23.2 million
people, would make an online purchase in 2012.
Travel Planning
eCommerce
The audience nearly tripled since July 2009. 16.5 million Brazilians visited travel sites in July
2012 from a home or work computer
In Brazil, there is a narrow choice of travel products, which has limited consumers to
primarily domestic travel, according to an eMarketer report
Brazil
Travel Booking
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18. Social Networking websites in Brazil
 Brazil is becoming highly social, with social media penetration
expected to reach 87.6% of internet users in 2012
 In 2012, 13.5% increase in Social Network users
 From 47.3 million users in 2010 to the expected growth of 79.3
million users in 2014
 Social Networking Sites in Brazil by Total Unique Visitors
1.
2.
3.
4.
5.
6.
7.
8.
Facebook.com
Orkut.com
Windows Live Profile
Twitter.com
Vostu.com
Google Plus
Tumblr.com
LinkedIn.com
36,098,000
34,419,000
13,301,000
12,499,000
4,901,000
4,300,000
4,029,000
3,182,000
Brazil
(+192%)
(+5%)
(+13%)
(+40%)
(+338%)
(-)
(+206%)
(-)
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19. eCommerce websites in Brazil
• B2C eCommerce in Brazil, the biggest economy in Latin America, is
expected to total US$18.7 billion in 2012, according to eMarketer a 21.9% increase over the previous year.
• Brazil will account for more than half of total B2C ecommerce sales
in Latin America through 2013
• In 2012, there are 23.2 million online buyers and it is expected to
grow to 31.6 million in 2015
• Top eCommerce websites in Brazil
–
–
–
–
–
MercadoLivre.com.br (eBay now owns it)
PeixeUrbano.com.br (a Groupon like coupon selling website)
Groupon.com.br (a subsidiary of Groupon.com)
Americanas.com.br (Electronics store)
Submarino.com.br (buy.com like website)
Brazil
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20. Trip Planning websites in Brazil
• The idea is to promote Brazil tourism, especially in light of the 2014
FIFA World Cup and the Rio 2016 Olympic and Paralympic Games
in the country
• Top travel domains by unique visitors, July 2012
–
–
–
–
–
Hotelurbano.com.br
Decolar.com
TAM.com.br
Voegol.com.br
Submarinoviagens.com.br
3,137,000
2,306,000
2,287,000
1,952,000
1,688,000
Brazil
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21. Travel Booking websites in Brazil
• Online travel sales are expected to reach $11.68 billion by 2016
• In Brazil, there is a narrow choice of travel products, which has
limited consumers to primarily domestic travel
• Top Online Travel Agencies in Brazil, 2010:
1.
2.
3.
4.
5.
6.
7.
8.
submarinoviagens.com.br
DECOLAR.COM.BR
Priceline/Booking
Expedia/Hotels.com
Malapronta
Viajanet
Rapi10
Travelocity
40%
35%
6%
6%
4%
4%
2%
1%
Brazil
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22. Handheld Devices in Brazil
• In Brazil, non-computer devices such as tablets, mobile phones and
gaming consoles accounted for 1.0% of all internet page views in
August 2011, up from just 0.6% in May 2011.
• Out of this 1.0% of non-computer traffic, mobile phones accounted
for the largest share at 59.8%. Tablets accounted for 36.5% of noncomputer traffic, while other devices (which include iPods, ereaders, gaming consoles, etc.) accounted for 3.7%.
• Compared to the US and UK, non-computer traffic in Brazil skewed
more towards tablets and less towards mobile phones and other
devices.
• Apple's iPad led the tablet market driving 94% of tablet page views
in August 2011 in Brazil. iPads now account for the majority share
of traffic originating from Apple devices at 58.7%.
Brazil
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23. Potential for Web Development
• Brazil’s Value Proposition:
–
–
–
–
–
Resolvability (the ability to solve problems effectively and efficiently)
Innovation and updated technology
Specialization
Proactive offer of solutions based on cultural affinity and plurality
Convenient both in terms of geography and time difference
Brazil
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24. Brazil – Gartner’s Allie Young Interview
Nov 2012
Brazil
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25. Best Web Development Companies in Brazil
Área Digital
Florianópolis, Brazil
http://www.areadigital.com.br
2006
<$250K
Ápice Internet
Maringa, Brazil
http://www.agenciamacan.com.br
2008
>$5M
Rmweb
Porto Alegre, Brazil
http://www.rmweb.com.br
2000
$250K-$1M
WebVix Marketing Virtual
Vitoria, Brazil
http://www.webvix.com.br
2001
$3M-$5M
Info Web Design
Bento Gonçalves, Brazil
http://www.infowebdesign.com.br
2003
$1M-$3M
Brazil
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26. Conclusion
• For the last decade, Brazil’s achievements have been impressive.
• The internet users and online shopping are continued to grow.
• Brazil has been building talents in Information Technology to take
advantage near-shoring and similar time zone
• Great exposure because of FIFA 2014 and Olympics 2016
• But now, its barriers to growth, government corruption and low
education levels are catching up with it. To extend its prosperity, it
needs to shift from relying on natural resources to developing
human ones.
Brazil
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27. References
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Gartner Research Report: Analysis of Brazil as an Offshore Services Location (2010, 2011)
Brazilian IT Industry Overview – Invest Tech
Electronic Government in Brazil – Global e-Government for Development Conference, University of Maryland
http://www.comscore.com/Insights/Press_Releases/2010/12/Colombia_Internet_Audience_Increases_31_Percent
_in_Past_Year_to_Rank_as_Fastest-Growing_Market_in_Latin_America
http://www.newmediatrendwatch.com/markets-by-country/11-long-haul/42-brazil
http://www.businessinsurance.com/article/99999999/NEWS040102/120309899
http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=Brazil
http://www.weforum.org/news/brazil-moves-global-information-technology-rankings-56th-place
http://www.brasscom.org.br/en/content/view/full/3315
http://www.bnamericas.com/en/brazil
http://finance.yahoo.com
http://www.internetworldstats.com/top20.htm
http://www.sourcingline.com/top-outsourcing-countries
http://the-outsourcing.com/subpage.php?pn=features&aid=228&page=6
http://brazil.topseos.com/rankings-of-best-web-design-companies-in-brazil
Brazil
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