Despite deep economic and politics crisis, Brazil is still a huge opportunity for the medium and long term. This is a compilation of data about the country in general and specific information about the technology, media and e-commerce industries. Please contact us at www.latamconnection.com for further information Some figures included in this report: +24.6 million fixed broadband subscriptions (42% penetration) 3G access on 150 million devices 4G access on 7.7 million devices Digital ad market to grow 14% in 2015 Brazil leads time spent on social media with 21.2 minutes per visit 64 million viewers of online video Online video has 702 minutes per viewer per month Room for growth in mobile commerce at 10% of total purchases (US is 27%)

1. Opportunities in
Brazil 2015
Mid Year
Update

2. Brasil Online 1995-1996
ZAZ 1996-1999
Terra 2000-2005
DM9DDB 2006
iG 2007-2013
Latam Connection 2013
caiquesevero@latamconnection.com
About the author
Caique Severo

3. Opening international markets
for digital companies
Market Intelligence
Business Development
Sales Representation
www.latamconnection.com

4. 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

5. General data about Brazil

6. 2015 204 million
people
Source: IBGE, june 2015 - http://www.ibge.gov.br/home/default.php

7. 2014
7th largest country in GDP
US$ 3 trillionpurchase power parity standard
Source: Finance Ministry - http://www.fazenda.gov.br/area-destaques/economia-brasileira-em-perspectiva-30.12.2014

8. 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

9. Source: IBGE April 2015: http://www.ibge.gov.br/home/
2015
Unemployment
6.7%

10. 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

11. Growth in higher education
% of people ages 25-34 with at least an undergraduate degree
Source: IBGE
2004 2013
15%
8%

12. Cars sales doubled in a decade
Number of new cars on the streets
Source: Anfavea, November 2014 - http://www.anfavea.com.br/tabelas.html

13. Domestic airline travel grew 164% in 9 years
Number 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

14. 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

15. Demographic bonus
Decrease in number of child per woman
Source: World Bank, Google, others

16. Demographic bonus
2010 2020
More people in the
economic active age
Men Women
Men Women

17. Internet and technology adoption

18. Internet users in Brazil
Non-users
70
Users
95
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/

19. Internet users by social economic class
DE
7
C
48
AB
38
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/

20. Internet users by age
73% are under 35 years old
60+
346-59
8
36-45
14
26-35
24
18-25
24
12-17
20
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/

21. Fixed broadband has more than
24.6 million subscriptions
Source: Teleco: http://www.teleco.com.br/blarga1.asp
april 2014 december 2014 march 2015 april 2015
24,6
24,4
23,9
22,9

22. 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

23. Mobile

24. 3G access near 150 million
Number of access points (000), 3G devices
1T14 2T14 3T14 4T14 Jan/15
148.837
144.668
123.203
118.474
105.402
Source: Teleco: http://www.teleco.com.br/3g_brasil.asp

25. Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
As low as
US$ 0.3 per day
Pre-paid mobile broadband

26. Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
Twitter, Facebook, WhatsApp
Free usage
Social media

27. Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp
4G
7.7 million
devices connected in January 2015

28. 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

29. 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%

30. Tablets sold per year
(Million)
Source: IDC
2010 2011 2012 2013 2014 Estimated 2015
8,1
9,5
8,4
3,1
0,80,1

31. Access through tablets
% of internet users
Source: F/Radar
2013 2014
14%
9%

32. Best seller tablets
78% of sales are under US$ 200
51% of sales are under US$ 120
Semp Toshiba
US$ 79
Android 4.2.2
7” screen
8GB drive
CCE
US$ 128
Android 4
9” screen
4GB drive
Multilaser
US$ 87
Android 4.2
7” screen
8GB drive

33. 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

34. Major players on mobile
Marketing campaigns, app development, ad network (Hands)
Marketing campaigns, media buying
End user apps (PlayKids, iFood), mobile payments, sms messaging

35. Advertising

36. Digital ad spending
Brazil is by far the largest market
in Latam
Emarkete: rhttp://www.emarketer.com/Article/Total-Media-Ad-Spending-Brazil-Pass-20-Billion-This-Year/1012339

37. 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% estimate
for 2015

38. Media
Portals Verticals Legacy print

39. 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

40. Social Media

41. 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

42. 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 minutes
per visit

43. 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

44. Online video

45. 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

46. 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

47. 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

48. E-commerce

49. Ecommerce
US$ 11.16
billion (+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

50. 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

51. Room for growth in mobile commerce
% of purchases made on mobile devices
Source: Criteo
Brazil US UK Japan
49%
41%
27%
10%

52. E-commerce
Fashion/Clothing Cosmetics Electronics
CarsAuctions/Trade Comparison
General

53. Challenges of doing
business in Brazil

54. Bureaucracy
Days to open a business
OCDE
Latam & Caribbean
Brazil 102,5
30
9,2
Source: Doing Business 2015

55. Bureaucracy
Hours spent managing taxes
OCDE
Latam & Caribbean
Brazil 2600
365
175
Source: Doing Business 2015

56. Tax costs
Total taxes (% of profits)
OCDE
Latam & Caribbean
Brazil 68,9
48,3
41,3
Source: Doing Business 2015

57. Office space rent
(US$ / cubic meters)
Lima
Buenos Aires
Caracas
São Paulo 90,8
46
30
21,5

58. Big Mac Index (US$)
Mexico
2.86
Argentina
3.88
Colombia
4.48
Brazil
5.28

59. Traffic in São Paulo
5/23/2014: 214 miles (344 km)

60. Conclusions
Opportunities Challenges
• Growing consumer base
• Big mobile adoption
• Demographic bonus
• Bureaucracy
• High taxes
• High operating costs

61. Thank you
www.latamconnection.com
caiquesevero@latamconnection.com