The devaluation of the real, the political crisis, and inflation of 6.4% in 2014 are some aspects that do not count in favor of Brazil. However, when it comes to consumption and development of new opportunities, representatives of Evernote, Netflix, EBANX, and Silicon Valley Bank all agree that the current economic turbulence in Brazil has not driven away good business opportunities in the biggest country of Latin America.
Brazil is not only the biggest ecommerce market of Latam, being responsible for 61% of online purchases in the continent, but it has sophisticated consumers, according to the global payments integration manager at Netflix, Kimi Navai.
“It is very hard to set up operations in Brazil, but for Netflix it has paid off. One important thing to have in mind though, is that you need to understand Brazilian consumers and treat them differently, because they will behave differently from the other latin american markets,” explains Navai.
According to Navai, Netflix has learned some of the specificities of Brazilian consumers through its experience in the country and also with her help, since she is a Brazilian. If Friday night is a peak of audience for Netflix in the US, in Brazil people prefer to go out with their friends.
“Brazilians also do not like dubbed content. When we launched there, all our content was dubbed, but we learned that they wanted to have the original sound with subtitles. Otherwise, they would not watch it.”
The eagerness for consumption among Brazilians is noticed by the other companies as well. Even with the fall of real, people are still buying goods from overseas, according to the business development manager at EBANX, Carolina Pascowitch.
“We thought that the price of the dollar would impact our business, because people are buying abroad. But it has not impacted us negatively. It just grows. Last year we grew 400%”, points out Pascowitch.
EBANX is an international financial services company that allows people to buy overseas and choose the convenient form of payment. Pascowitch calls this “democratizing cross border ecommerce”, which for Brazilians is a great opportunity, given that 80% of all payments in the country are done through installments and only 35% of Brazilians have international credit cards.
“In 2013, Brazilians received over 20 million packages or orders from overseas. And the US is their favorite online shopping place, followed by China”, adds Pascowitch.
Evernote does not have complaints about Brazil neither. The Silicon Valley based company had 200 thousand users in Brazil, in 2011. Within only three years, Evernote reached four million users of its product in Brazil.
“We are a Brazilian company, we have a legal entity. And as soon as we became a Brazilian company, things started clicking. I do not think this economical situation in Brazil has been affecting us. We have been growing, actually”, says the Latin America general manager of Evernote, Luis Samra.
Evernote has its headquarters in Redwood City, California, but it has expanded to the world with offices in Austin, Beijing, Lyon, Moscow, Seoul, Singapore, Taipei, Tokyo, Zurich and, of course, São Paulo.
The reason why the company is strategically settled in these cities is because these are places that have something very special to offer to the business.
“We believe these users are making an important contribution to the internet and the usage of new products. So we want to be there and capture the ideas before someone else does.”
Talking specifically about Brazil, Luis Samra made it clear that the company’s decision to go to the country was based in an irrefutable fact: the incidence of a promising market.
“We saw our growth in Brazil and we took our chances. The volume was not there yet, but it paid off in the long run. A major lesson we took from this experience is that the more local we are, the better for our business”, explains Samra, who also recognized the necessity of localizing the product to Brazilian Portuguese, instead of just keeping the European version.
The same way Brazil has been a good consumer market to Netflix, Evernote, and EBANX, it has also been an ecosystem of successful cases of entrepreneurship, which interests the Silicon Valley Bank, says the managing director at SVB, Andy Tsao.
“There are Brazilian successful companies becoming global like Movile, which created a kids app that is number one in its category. Peixe Urbano that was acquired by the Chinese Bidu is another good example”, explains.
The Silicon Valley Bank has a team that covers the new and emerging markets, which includes Brazil and Latin America, Russia, Turkey, and Australia.
From the point of view of venture investors, Tsao explained that the buzz created in 2012 does not exist anymore, and that venture capitalists are much more selective now.
“Our perspectives as we go to 2015 is that we are seeing steady-consistent investments not only from the local venture capitalist community, but international investors as well. These are more challenging times for sure.”
Tsao even made a comparison between Silicon Valley and Brazil, saying that he has seen good elements in the Brazilian entrepreneurial ecosystem, even though there is a long way ahead.
“The promise in Brazil is what gets us excited because we see a lot of elements of successful ecosystems coming together over there. Entrepreneurship is becoming much more popular in Brazil. The country is not in the stage of developing role models like Steve Jobs and Mark Zuckerberg, but it won’t be very long before that happens,” concludes.