The Brazil Tech And Innovation Round-Up: International E-Commerce Growth, Digital Exclusion Hits Black And Poor Brazilians, App Delivery Fee Cap

Welcome to this week's news round-up on the Brazilian innovation and technology ecosystem. Here is a selection of five key developments in Latin America's largest economy during the week ending May, 29, 2020:

Brazilians are likely to maintain or increase the frequency of international e-commerce shopping and average ticket during and after the Covid-19 outbreak. This is the headline finding of a study released today (29) by Brazilian fintech Ebanx.

The study published by the unicorn, which processes payments on behalf of the likes of Spotify, Airbnb and AliExpress in Brazil, is based on a survey with 1,500 online shoppers who have purchased goods or services from the companies Ebanx serves, carried out between April 28 and May 4, 2020.

More than half (52.3%) of the consumers polled who spent up to BRL 60 on international e-commerce before the pandemic plan on maintaining or increasing spend on these websites during the Covid-19 outbreak, according to the survey. The majority of respondents (92%) belong to what could be considered the middle and lower class, with monthly income ranging between BRL 2.090 and BRL 10.450. Of these, 67.4% are not on benefits, while 22.1% are resorting to emergency financial aid from the government during the crisis and 10.5% receive other types of benefits.

The consumer trends around international e-commerce also apply to survey participants who are currently receiving money from the government during the crisis: 52.4% of consumers in that situation predict that they will also keep on buying more from international sites or increase the volume of purchases.

THE APPEAL OF FOREIGN WEBSITES

According to the survey, Brazilians particularly like to buy electronics, clothing and decor items on international e-commerce platforms. In addition, streaming and online games are popular among consumers in the country: Ebanx has seen a 106% increase in the total payment volume processed in March 2020 for both of these services in relation to the same month a year ago.

Even with the dollar hike against the Brazilian real, buying products from international sites remains attractive to Brazilians, according to André Boaventura, partner and CMO at Ebanx: “Shopping on international e-commerce sites has a different pattern: what motivates people to buy from these websites is the quantity of products and variety, in addition to price, which is still competitive despite the dollar hike and delivery costs”, he noted.

In terms of how Brazilians pay for these items, the survey highlighted that boletos, a barcoded slip that allows consumers to pay for itens, remains popular, particularly among those on lower incomes and don't have a credit card. Richest Brazilians typically buy from international e-commerce platforms using a credit card (78%), while consumers that are on lower pay prefer to use boletos (40%). During the pandemic, consumers in Brazil are also preferring to pay for things in installments, regardless of their socioeconomic status: 51.3% of wealthy Brazilians do so, while 67.3% split the payments of their purchases.

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The issue of inequality in Brazil has been illustrated in new numbers released this Tuesday (26) by the Brazilian Internet Steering Committee (CGI.br) on the current state of digital inclusion in the country.

According to the survey TIC Domicílios, now in its 15th year, some 71% of Brazilian households currently now have access to the Internet and three in four Brazilians are connected, the equivalent of 134 million people, or 74% of the population over 10 years old.

However, more than 20 million households remain digitally excluded, according to the report, and the issue is more noticeable in the Northeast of the country, where 35% of homes don't have Internet access. Moreover, 58% of Brazilians only access the Internet through their smartphones, and the percentage of people who do so reaches 85% among populations living on minimum wage. Exclusive use of mobile phones to access the Internet is higher among black Brazilians (65%) compared to 51% of white users.

Lack of access to the Internet and exclusive access through mobile phones in the most vulnerable populations presents relevant challenges to the effectiveness of public policies to handle the pandemic, according to Alexandre Barbosa, manager at Cetic.br, CGI's research arm.

"Schoolchildren in vulnerable families with no access to the Internet are also considerably affected in this period of social distancing. The pandemic clearly reveals the inequalities in Brazil", he noted.

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The Brazilian government plans to impose limits on the fees delivery apps can charge gig economy workers. App-based transportation companies operating in the country such as Uber, Cabify, Loggi, iFood and 99 might have to deal with a 15% fee cap during the Covid-19 pandemic. This Tuesday (19) the Senate rejected an amendment by the Chamber of Deputies that removed the cap from a bill that creates a special legal regime for these companies during the new coronavirus outbreak. The bill now needs to be signed into law by president Jair Bolsonaro.

Also this week:

- Brazilian IT services firm Stefanini is planning a shift to remote working between the next 12-18 months. Under the Stefanini Everywhere project, half of the firm's 25.000 employees will be working from anywhere, most of them permanently;

- A Brazilian hacker was responsible for attacking 4.820 official websites of 40 countries, according to cybersecurity firm Check Point. According to the company, the hacker is active since 2013. Operating under the name of 'VandaTheGod', the hacktivist has mainly targeted US websites, which represent 57% of the attacks. However, the hacker has attacked various other countries including Brazil, by defacing a government website with the hashtag #PrayForAmazonia;

- Rio de Janeiro and the American Tower real estate investment fund entered into a partnership to allow the city to use the company's Internet of Things network infrastructure to develop smart city solutions;

- To support the sector through the crisis, the Brazilian Association of Textile and Clothing Industries (Abit) has developed e-commerce solutions for its members. The platform includes management tools for several segments of the industry such as B2B online stores and retail, as well as integrations for online marketplaces.

- Marketing professionals in Brazil are increasingly data-driven in order to navigate the crisis, according to a Salesforce study released this week with 7.000 professionals worldwide and 300 respondents in Brazil. According to the CRM firm, the average number of customer data sources Brazilian marketing professionals used so far in 2020 is 16, above the global average of 10 sources. The prediction for 2021 is that Brazilian marketing professionals will be using 23 customer data indicators to go about their decision making, well above the predicted global average, which is 12 sources.