Brazil: The App Economy is About to Explode
As emerging economies go, Brazil is red hot!
Its population is vast, young, and ready to engage with new technologies via their smartphones. Despite this, the country’s home-grown tech companies have yet to make an impact on the local business scene in the same way that US or Chinese companies have dominated their home markets. That’s not to say there aren’t local success stories – read on for more details – but it does mean that there is still time and space to make a big noise in what is essentially a really big market.
In a market ripe for disruption, there is still time to become the Brazilian Apple, Amazon, Alphabet, or Alibaba and, as is the case in similar markets, the smartphone will be the catalyst for Brazil’s soon 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 find it.
An Economy with Real Scale
With a population of more than 212 million, Brazil is not only South America’s most populated country, it ranks as the fifth most populous country in the world (behind China, India, the United States, and Indonesia), it is also an incredibly youthful country, with 69 percent of its population under the age of 30.
Note: If, as an app developer, the promise of targeting a population where the vast majority of people fall into the category of Millennial or Generation Z doesn’t raise your pulse, you should probably seek medical help as a matter of urgency.
Further Reading: Gen Z – Will the Smartphone Generation Change the Way We Work
Brazilians Love Their Smartphones
As is the case in many other emerging economies, smartphones are the primary method of accessing digital services in Brazil with 71 percent of Brazilians owning a smartphone (compared to just 38 percent of people who own a laptop or desktop device). Smartphone penetration rates in Brazil are in line with global averages and much higher than other emerging economies like India where smartphone penetration is only around the 40 percent mark.
Android devices dominate the market with an 84 percent market share with Samsung accounting for 42 percent of device sales (reasonably priced devices like the Galaxy J5 lead the way), followed by Motorola with 24 percent. Apple devices sit in third place with less than 14 percent of the market.
Further Reading: BRICS: A Smart Future Built on Affordable Devices
Heavy Internet Users
Brazilians spend upwards of nine hours per day 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 in Brazil access online services via their smartphones, compared to just 38 percent 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 (44 percent) – perhaps highlighting the young, urban demographic of the typical Brazilian smartphone user.
This heavy Internet use can also be seen in the decline of other media. While the number of hours spent online increased by 4 percent between 2014 and 2016, the number of hours watching TV fell by 2 percent and listening to the radio by 3 percent.
Interestingly, the number of hours spent consuming print media remained static.
The Importance of the Brazilian Market to Global Brands
Just because Brazil is referred to as an emerging economy, doesn’t mean that global corporations aren’t already seeing real critical mass in the market.
Brazil boasts more than 130 million Facebook users making it the social networks third largest user-base. Similarly, Instagram has more than 50 million Brazilian users, making it their second largest user base in the world.
Similar patterns can be seen in other popular social networks like Twitter, LinkedIn, and Pinterest. Meanwhile, WhatsApp is the most commonly used communication app in the country with a staggering 91 percent penetration rate amongst Internet users.
The gaming industry is also incredibly buoyant in Brazil with an estimated 60 million gamers generating more than $1.3 billion in annual revenue.
In terms of app usage, Brazilians are also heavy hitters.
The country downloads more than 6 billion apps every year, making it the fourth largest global consumer of apps.
The average Brazilian smartphone user has 83 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 in the world. As such, Brazil has its fair share of local success stories in the smartphone ecosystem.
Brazilian Success Stories
PlayKids, produced by the Brazilian mobile services company Movile, is one of the top-grossing children’s apps of all time. The app which offers educational content and service is now available in more than 180 countries and has more than 5 million active subscribers.
Further Reading: Too Cool for School – Education Apps
Tapping into the growing popularity of mindfulness, Brazilian developers also saw huge success with the adult drawing and coloring app Colorfy which has more than 90 million users and was the second most downloaded free app in 2015.
Further Reading: Can a 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’s burgeoning games scene – with the countries 375+ games studios producing upwards of 1,700 games titles in 2018.
Still Room to Grow
Despite such heavy app usage already, there is still plenty of space for the Brazilian app market to grow. If it follows current trends in North America, smartphone ownership could grow by upwards of 10 percent in the coming years. And with youth on its side, there is no reason why, as the economy grows, it cannot surpass this and further challenge more mature markets.
As the smartphone continues to disrupt the media landscape in Brazil, there is also the potential to take more money from competitive channels.
Despite losing share to the mobile devices, television still dominates media spend in the country with 55 percent of the total investment in media and advertising going to broadcast and Pay TV. This is compared to 31 percent in the United States and China where the bulk of investment (52 and 58 percent respectively) now goes to digital channels.
It is this extra capacity in terms of growth potential and revenue that will potentially tip the balance from the traditional brands that dominate the business scene in Brazil to more disruptive technologies.
There are, however, a number of roadblocks that need to be cleared before Brazil can call itself a true contender in the mobile arena.
These roadblocks are commonly seen across a number of emerging economies and include:
- Smartphone proliferation has yet to filter out of the urban environment and be widely adopted by older and more rural demographics.
- Internet speeds tend to be slower than in many other mature economies.
- eCommerce is still in its infancy in Brazil and requires significant investment in numerous areas if it is to become a viable alternative to traditional retail.
- While Brazilians are avid consumers of content via their mobile devices, they are not yet making a significant number of transactions via their devices.
The good news is that none of these roadblocks are unsurmountable and small changes will make significant changes which will then be amplified by the size of the opportunity afforded by the size of the market.
Digital Turbine – Feet on the Ground
The team at Digital Turbine have long been excited about the opportunities available to app developers in the Brazilian market and, as such have invested heavily in the region with a physical presence to ensure the best possible relationships with popular device manufacturers and mobile networks in the region.
This means our pre-loaded app campaigns have the best possible reach and engagement opportunities at a price that enables app developers to explore and further develop their activities in this exciting market.
To learn how Digital Turbine can help your next app marketing campaign hit the ground running in maximize your potential in Brazil, contact one of our local pre-loading experts today.