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Brazil: The App Economy is About to Explode

As emerging economies go, Brazil is redhot!

Its population is vast, young, and ready toengage with new technologies via their smartphones. Despite this, the country’shome-grown tech companies have yet to make an impact on the local businessscene in the same way that US or Chinese companies have dominated their homemarkets. That’s not to say there aren’t local success stories – read on formore details – but it does mean that there is still time and space to make abig noise in what is essentially a really big market.

In a market ripe for disruption, there isstill time to become the Brazilian Apple, Amazon, Alphabet, or Alibaba and, as isthe case in similar markets, the smartphone will be the catalyst for Brazil'ssoon to be discovered unicorn brands. If you are looking for a new, exciting,and potentially high-growth opportunity, Brazil might just be the place to findit.

AnEconomy with Real Scale

With a population of more than 212 million, Brazil is notonly South America’s most populated country, it ranks as the fifth mostpopulous country in the world (behind China, India, the United States, andIndonesia), it is also an incredibly youthful country, with 69 percent of itspopulation under the age of 30.

Note: If, as an app developer, the promise of targeting a populationwhere the vast majority of people fall into the category of Millennial orGeneration Z doesn’t raise your pulse, you should probably seek medical help asa matter of urgency.

FurtherReading: GenZ – Will the Smartphone Generation Change the Way We Work

BraziliansLove Their Smartphones

As is the case in many other emergingeconomies, smartphones are the primary method of accessing digital services inBrazil with 71 percent of Brazilians owning a smartphone (compared to just 38percent of people who own a laptop or desktop device). Smartphone penetrationrates in Brazil are in line with global averages and much higher than otheremerging economies like India where smartphone penetration is only around the40 percent mark.

Android devices dominate the market with an84 percent market share with Samsung accounting for 42 percent of device sales(reasonably priced devices like the Galaxy J5 lead the way), followed byMotorola with 24 percent. Apple devices sit in third place with less than 14percent of the market.

FurtherReading: BRICS:A Smart Future Built on Affordable Devices

HeavyInternet Users

Brazilians spend upwards of nine hours perday connected to the Internet. This is compared to 6.3 hours (31 percent less)in the United States and just 5.8 hours in the United Kingdom.

Upwards of 90 percent of Internet users inBrazil access online services via their smartphones, compared to just 38percent on a laptop, 37 percent on a desktop, and 17 percent on a tablet.

Much of this time is spent on online chat(83 percent), social networks (56 percent), and streaming music services (44percent) – perhaps highlighting the young, urban demographic of the typicalBrazilian smartphone user.

This heavy Internet use can also be seen inthe decline of other media. While the number of hours spent online increased by4 percent between 2014 and 2016, the number of hours watching TV fell by 2percent and listening to the radio by 3 percent.

Interestingly, the number of hours spentconsuming print media remained static.

TheImportance of the Brazilian Market to Global Brands

Just because Brazil is referred to as anemerging economy, doesn’t mean that global corporations aren’t already seeingreal critical mass in the market.

Brazil boasts more than 130 millionFacebook users making it the social networks third largest user-base.Similarly, Instagram has more than 50 million Brazilian users, making it theirsecond largest user base in the world.

Similar patterns can be seen in otherpopular social networks like Twitter, LinkedIn, and Pinterest. Meanwhile,WhatsApp is the most commonly used communication app in the country with astaggering 91 percent penetration rate amongst Internet users.

The gaming industry is also incrediblybuoyant in Brazil with an estimated 60 million gamers generating more than $1.3billion in annual revenue.

AppUsage

In terms of app usage, Brazilians are alsoheavy hitters.

The country downloads more than 6 billionapps every year, making it the fourth largest global consumer of apps.

The average Brazilian smartphone user has83 apps installed on their device and will use up to 12 services every day.

The local market doesn’t only consume apps,it also makes them and currently ranks as the fourth largest app producer inthe world. As such, Brazil has its fair share of local success stories in thesmartphone ecosystem.

BrazilianSuccess Stories

PlayKids, produced by the Brazilian mobileservices company Movile, is one of the top-grossing children’s apps of alltime. The app which offers educational content and service is now available inmore than 180 countries and has more than 5 million active subscribers.

FurtherReading: TooCool for School – Education Apps

Tapping into the growing popularity ofmindfulness, Brazilian developers also saw huge success with the adult drawingand coloring app Colorfy which has more than 90 million users and was thesecond most downloaded free app in 2015.

FurtherReading: Cana Smartphone App Really Help Improve Our Mental Health?

Looking for something more energetic –you’re sure to find something to entertain you coming out of Brazil’sburgeoning games scene – with the countries 375+ games studios producing upwardsof 1,700 games titles in 2018.

StillRoom to Grow

Despite such heavy app usage already, thereis still plenty of space for the Brazilian app market to grow. If it followscurrent trends in North America, smartphone ownership could grow by upwards of10 percent in the coming years. And with youth on its side, there is no reasonwhy, as the economy grows, it cannot surpass this and further challenge moremature markets.

DisruptiveMedia

As the smartphone continues to disrupt themedia landscape in Brazil, there is also the potential to take more money fromcompetitive channels.

Despite losing share to the mobile devices,television still dominates media spend in the country with 55 percent of thetotal investment in media and advertising going to broadcast and Pay TV. Thisis compared to 31 percent in the United States and China where the bulk ofinvestment (52 and 58 percent respectively) now goes to digital channels.

It is this extra capacity in terms ofgrowth potential and revenue that will potentially tip the balance from thetraditional brands that dominate the business scene in Brazil to moredisruptive technologies.

Roadblocks

There are, however, a number of roadblocksthat need to be cleared before Brazil can call itself a true contender in themobile arena.

These roadblocks are commonly seen across anumber of emerging economies and include:

  • Smartphone proliferation hasyet to filter out of the urban environment and be widely adopted by older andmore rural demographics.
  • Internet speeds tend to beslower than in many other mature economies.
  • eCommerce is still in itsinfancy in Brazil and requires significant investment in numerous areas if itis to become a viable alternative to traditional retail.
  • While Brazilians are avidconsumers of content via their mobile devices, they are not yet making asignificant number of transactions via their devices.

The good news is that none of theseroadblocks are unsurmountable and small changes will make significant changeswhich will then be amplified by the size of the opportunity afforded by thesize of the market.

DigitalTurbine – Feet on the Ground

The team at Digital Turbine have long beenexcited about the opportunities available to app developers in the Brazilianmarket and, as such have invested heavily in the region with a physicalpresence to ensure the best possible relationships with popular devicemanufacturers and mobile networks in the region.

This means our pre-loaded app campaignshave the best possible reach and engagement opportunities at a price thatenables app developers to explore and further develop their activities in this excitingmarket.

To learn how Digital Turbine can help yournext app marketing campaign hit the ground running in maximize your potentialin Brazil, contact one of our local pre-loading experts today.

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