This presentation brings crucial data about doing business in Brazil specially for international digital companies looking to enter the market. You will find: general data such as size of online population, GDP, socio-economic figures, demographic, internet and technology (mobile, tablet, broadband) adoption, social media and digital market size. For further inquires get in touch with us at www.latamconnection.com

1. Opportunities in
Brazil 2015

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

3. 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

4. Agenda
1. General data about Brazil
2. Internet and technology
3. Digital media
4. Challenges of doing business in Brazil

5. General data about Brazil

6. 2014 203 million
people
Source: IBGE, december 2014 - 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. 2014
Very small growth
+ 0.2%
Source: Finance Ministry - http://www.fazenda.gov.br/area-destaques/economia-brasileira-em-perspectiva-30.12.2014

9. 2014
Low unemployment
4.8%
Source: IBGE December 2014 - http://saladeimprensa.ibge.gov.br/noticias?view=noticia&id=1&busca=1&idnoticia=2801

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
15,2%
8,1%

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
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
41,7%
15,3%
10,8%
8,3%
6,6%
5,8%
4,5%
3,4%
2,5%
1,2%
45,8%
15,9%
10,4%
7,7%
5,9%
4,9%
3,7%
2,8%
1,9%
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

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+
3
46-59
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. Mobile access: 62 million people
Millions of internet users (celular and tablet)
Source: F/Radar
2013 2014
62,5
42

22. Access through celular grows
% of internet users
Source: F/Radar
2013 2014
65%
48%

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

24. Tablet OS
3T sales
iOS
5%
Android
95%
Source: IDC Brazil

25. 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

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

27. 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%

28. Almost 75% 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. 15.1
million
smartphones sold
July - September
2014
Source: IDC, december 2014, http://br.idclatin.com/releases/news.aspx?id=1777

30. More than half of internet users have a smartphone
2013 2014
53%
33%
% of internet users
Source: F/Radar

31. Broadband penetration will grow
Brazil Chile Argentina
53,9%
49,6%
42,4%
% of households
Source: ITU, State of Broadband 2014 - http://www.broadbandcommission.org/Documents/reports/bb-annualreport2014.pdf

32. National broadband plan
• 1 Mbps for R$ 35 (US$ 13) monthly
• New frequency auctions: 2.5 GHz (3G) and 450 MHz (rural areas)
• Tax exemptions or reductions for
• Local production of smartphones, tablets, PCs and modems (zero tax -
PIS/Cofins)
• Profits generated from investments in telecom infrastructure (tax down to
15%)
• Satellite launch in 2016 to improve bandwidth
• New submarine cables linking Brasil to US, Europe and Africa
• Free 2Mbps access in 65,000 public schools
Source: Communications Ministry, May 2014 - http://www.mc.gov.br/programa-nacional-de-banda-larga-pnbl

33. Fixed broadband reaches 23 million subscriptions
Source: Communications Ministry, May 2014 - http://www.mc.gov.br/programa-nacional-de-banda-larga-pnbl
Number of subscriptions

34. Mobile broadband reaches 3,400
cities and 123 million subscriptions
Source: Communications Ministry, May 2014 - http://www.mc.gov.br/programa-nacional-de-banda-larga-pnbl
CitiesSubscriptions

35. 4G
4.2 million
subscriptions in October 2014
Source: Teleco, October 2014 - http://www.teleco.com.br/4g_brasil.asp

36. Digital media

37. Digital ad spending
Brazil is by far the largest market
in Latam
Source: eMarketer

38. Social Media usage
% of internet users
Source: F/Radar
Facebook Whatsapp Skype/MSN Twitter Instagram
171719
37
88
9
22
27
7
85
Abr 2013 Abr 2014

39. Brazil is the second in time spent online
Source: Comscore, september 2014 - http://www.comscore.com/por/Insights/Presentations-and-Whitepapers/2014/2014-LATAM-Digital-Future-in-Focus

40. News sites reach 63% of users in Brazil
Source: Comscore, september 2014 - http://www.comscore.com/por/Insights/Presentations-and-Whitepapers/2014/2014-LATAM-Digital-Future-in-Focus

41. 34 million people access government sites
Source: Comscore, september 2014 - http://www.comscore.com/por/Insights/Presentations-and-Whitepapers/2014/2014-LATAM-Digital-Future-in-Focus

42. 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

43. Ecommerce
US$ 6.15
billion (+11%)
1S 2014
Source: eBit

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

45. Media
Portals Verticals Legacy print

46. Mobile News about internet
Payment
Retargeting, DSPs,
Ad Networks and segmentation

47. Challenges of doing
business in Brazil

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

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

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

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

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

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

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

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