You’re reading The Brazilian Report‘s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: A look at how Brazilians connect to the internet (something inaccessible for 48 million people). Ride-hailing and delivery apps already eat up to 16 percent of Brazilians’ budget. Google under investigation. E-commerce behemoth AliExpress to open first physical store in Brazil.  Happy reading!


A look into how Brazilians connect to the internet

Year after year, Brazilians are becoming

more and more dependent on the internet. This upwards trend is clear in the latest survey from the Regional Center of Studies for the Development of the Information Society (CETIC.br). Over the past three months, 70 percent of the Brazilian population has accessed the internet at least once. Here are some of the study&#8217;s main findings:</p> <ul><li><strong>Smartphones. </strong>Thanks to the use of their mobile phones, lower-income populations saw a dramatic jump in internet use—from 60 to 76 percent (socio-economic class C) and from 23 to 40 percent (class D/E). Of the entire population connected to the internet, 97 percent access the web on their phones.</li><li><strong>Income.</strong> Differences in internet access reflect Brazil&#8217;s overall social inequality levels. The probability of someone being completely offline is inversely proportional to wealth. Among rich families, only 7 percent have never connected to the internet. That rate goes up to 35 percent for poorer households.</li><li><strong>E-commerce.</strong> Fewer Brazilians are <a href="https://brazilian.report/newsletters/weekly-report/2019/05/25/e-commerce-shopping-malls/">buying products online</a>—the rate went down from 38 to 34 percent between 2016 and 2018. The main reasons for that is a preference for making in-person purchases. Meanwhile, two-thirds of people don&#8217;t trust the quality of the product they will receive and/or are worried about privacy or security issues. <em>Boletos bancários</em>, which are bank-issued invoices, remain a key payment method in Brazil, used by 52 percent of e-shoppers.</li></ul> <div class="flourish-embed" data-src="visualisation/652870"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <div class="flourish-embed" data-src="visualisation/652878"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <div class="flourish-embed" data-src="visualisation/652885"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <div class="flourish-embed" data-src="visualisation/652887"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <div class="flourish-embed" data-src="visualisation/652892"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <div class="flourish-embed" data-src="visualisation/652897"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <hr class="wp-block-separator"/> <h2>Ride-hailing and delivery apps already eat up to 16 percent of Brazilians&#8217; budget</h2> <p>Streaming services, food delivery and ride-hailing apps have become an integral part of life in Brazil. These services are simple to pay for—in most cases, users don&#8217;t even need to type in a password—which makes it easy for purchases to pile up unnoticed. This can be a problem in a country where <a href="https://www1.folha.uol.com.br/empreendedorsocial/2019/02/brasileiro-nao-poupa-e-a-culpa-e-da-nossa-historia.shtml">people don&#8217;t have a habit of saving money</a> (due to numerous factors, including a historically high inflation rate, which pushed people to consume before their money would lose its value).</p> <p>A study by GuiaBolso, a financial planning app with more than 4.5 million users, shows that services such as Netflix, Spotify, Uber, and iFood eat up as much as 22 percent of some people&#8217;s budgets. The company analyzed 215,667 accounts for the survey.</p> <p>Ride-hailing apps—such as Uber, 99, or Cabify—are the biggest source of spending, consuming 9 percent of Brazilians&#8217; salaries, on average. Interestingly, these are the cheapest services, and precisely because of that, consumers are less aware of how much they are spending overall.</p> <hr class="wp-block-separator"/> <h2>Uber drivers: freelancers, or employees?</h2> <p>Ride-hailing giant Uber just got a major win this week, as Brazil&#8217;s Superior Court of Justice unanimously ruled that Uber drivers should not be considered regular employees, but rather independent contractors. It is the first time a high court in Brazil has issued a decision on the matter, meaning it should now serve as precedent for other cases related to Uber, strengthening its business model in its second-largest market.</p> <p>The majority opinion considered that &#8220;app drivers don&#8217;t have a hierarchical relationship with Uber because their services are performed without pre-fixed timetables. They also don&#8217;t get regular salaries, deconstructing the notion of an employment relationship.&#8221;</p> <p>Labor courts had already sided with Uber on another 250 cases. The company is present in over 100 Brazilian cities, having more than 600,000 drivers in the country.</p> <hr class="wp-block-separator"/> <h2>Brazil to investigate Google on use of children&#8217;s private data </h2> <p>The Justice Ministry opened an investigation into a supposedly illegal data collection of the YouTube videos of teenagers and children, without their parents&#8217; consent, for targeted advertising. The move comes after the U.S. Federal Trade Commission fined the tech giant USD 136 million for the same thing (Google will also have to pay USD 34 million to the state of New York). Brazil&#8217;s Consumer Protection Department wants to know if Brazilian users were affected.</p> <p>Google now has ten days (starting September 5) to present its case to the Justice Ministry, after which the government will decide on whether to take action against the tech behemoth.</p> <p>Last week, the São Paulo Consumer Protection Service (Procon) fined both Google and Apple for abusive data collection policies. The case was related to Russian app <a href="https://brazilian.report/tech/2019/07/26/tech-roundup-july-26-could-brazil-ban-5g-technology/">FaceApp</a>, which uses facial recognition technology to simulate how people could look when they are old. In exchange for showing users what they look like with white hair and wrinkles, FaceApp gained “perpetual, irrevocable, nonexclusive, royalty-free, worldwide, [and] fully-paid” rights to millions of photographs. This type of data can be compiled and used for a myriad of purposes, not least facial recognition software. </p> <p>For making FaceApp available on their app stores, Google and Apple were slapped fines of BRL 9.9 and 7.7 billion, respectively. Brazilian authorities found that the companies are liable for the services they put on display.</p> <hr class="wp-block-separator"/> <h2>AliExpress to have physical store in Brazil</h2> <p>China&#8217;s AliExpress, one of the <a href="https://brazilian.report/money/2019/01/11/amazon-brazil-e-commerce/">world&#8217;s largest e-commerce marketplaces</a>, is opening its first physical store in Brazil. Curitiba, the capital city of Paraná state, was the chosen venue. For 30 days, a pop-up store will be set up in a shopping mall. The initiative is the result of a partnership between AliExpress and payments company Ebanx, aiming at improving brand awareness in Brazil and winning over potential customers who don&#8217;t trust the Chinese service.</p> <p>So far, there are no plans to open a permanent location in Brazil, but the pop-up store concept was tested—and had positive results—in Madrid.</p> <hr class="wp-block-separator"/> <h2>IT market going up</h2> <p>A study by the Brazilian Software Companies&#8217; Association (Abes) shows that the country&#8217;s IT market improved in all segments last year. In 2018, the sector grew 9.8 percent—against a previous average of 6.7 percent—amassing USD 47.7 billion in investments. For the association, the numbers signal a recovery of the technology market in Brazil.&nbsp; For the future, Abes projects a 46-percent annual growth rate for the artificial intelligence sector between now and 2021. And, in 2024, AI and automation are expected to account for one-third of apps&#8217; interfaces.</p> <hr class="wp-block-separator"/> <h2>Sexist environment</h2> <p>Over half of the Brazilian population is made up of women. Still, 21 percent of the country&#8217;s tech companies employ only men. Meanwhile, one-third of companies don&#8217;t have one single black person in their staff. Trying to change this reality, Olabi, a social organization working to democratize technology, created <a href="https://www.pretalab.com/">PretaLab, an online database of women coders</a>, aimed at raising their employability.</p> <p>Black women are the societal segment with the lowest chances of finding a job. According to International Labor Organization data, one-quarter of them are either unemployed or underemployed.

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TechSep 06, 2019

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BY Laura Quirin

Laura is one of The Brazilian Report's founders. She started her career in China and moved to Brazil in 2015.