Tech Roundup, Oct. 4, 2019 | Alexa in Brazil

a Brazilian Portuguese version of Alexa, the company&#8217;s voice assistant app. The move comes after the opening of Amazon&#8217;s very own distribution center in January, and the arrival of Amazon Prime services to Latin America&#8217;s biggest economy.</p> <p>In Brazil, Alexa will allow users to make Prime purchases with only voice commands, as well as order meals from food delivery app iFood, call an Uber, or make bank transactions using Itaú and Bradesco bank accounts. &#8220;It&#8217;s a logical move, as Alexa incentivizes users to use other Amazon services,&#8221; said Renato Franzin, a professor at the University of São Paulo&#8217;s engineering school, to <a href="https://6minutos.com.br"><em>6 minutos</em></a>.</p> <script src="https://www.buzzsprout.com/299876/1729210-78-how-will-amazon-inc-disrupt-brazilian-retail.js?player=small" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <p>The newcomer creates more competition in the voice assistant app market—Google, Apple, and Samsung already have their own such apps (Assistant, Siri, and Bixby, respectively). As we told you in our <a href="https://brazilian.report/tech/2019/08/16/future-job-market-automation-brazil-amazon/">August 16 Tech Roundup</a>, 49 percent of Brazilian smartphone owners use voice assistants—despite the feature being relatively new to Portuguese speakers.&nbsp;</p> <p>Why did it take so long for Amazon to launch is assistant in Brazil? Well, the company says it needed to teach its robots how to speak in a local accent—which includes the local ways to pronounce English tech words, such as wi-fi (ooh-ay-fi), or smartphone (ee-smar-tchee-pho-ney).&nbsp;</p> <p>As with other voice assistant apps, the Brazilian version of Alexa raises many privacy-related issues. Ricardo Garrido, the general manager for Alexa in Brazil, has confirmed that Portuguese-speaking analysts will listen to &#8220;fractions of audio clips&#8221; from users. He claims that this will happen in fewer than 1 percent of interactions. &#8220;These audio clips can, for instance, be fragmented into hundreds of pieces, and each one would be listened to by a different employee.&#8221;&nbsp;</p> <p>Mr. Garrido guarantees that all information is anonymous, and that users won&#8217;t be identified. But, of course, he wouldn&#8217;t say otherwise.</p> <hr class="wp-block-separator"/> <h2>Mapping Brazil&#8217;s fintechs</h2> <p>Brazil&#8217;s first blog about fintechs, Finnovation, has launched the <a href="https://finnovation.com.br/mapa-de-startups/">2019 version of its fintech map</a>—an annual survey of the market in Brazil. The country now has 504 working fintechs, split into ten segments. That represents a 34-percent jump from last year, when the survey counted 377 such startups.</p> <figure class="wp-block-image"><img loading="lazy" width="1024" height="585" src="https://brazilian.report/wp-content/uploads/2019/10/download-2-1024x585.png" alt="" class="wp-image-25390" srcset="https://brazilian.report/wp-content/uploads/2019/10/download-2-1024x585.png 1024w, https://brazilian.report/wp-content/uploads/2019/10/download-2-300x171.png 300w, https://brazilian.report/wp-content/uploads/2019/10/download-2-768x439.png 768w, https://brazilian.report/wp-content/uploads/2019/10/download-2-610x348.png 610w, https://brazilian.report/wp-content/uploads/2019/10/download-2.png 1110w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Finnovation</figcaption></figure> <p>No other segment is as popular as payments (26 percent), followed by credit companies (17 percent).&nbsp;</p> <p>The map also presents us with findings of <em>who</em> is behind these fintechs. Fifty-eight percent of founders are over 35 years old, and only 6 percent have yet to complete their 25th birthday.</p> <p>The market in Brazil remains somewhat conservative—as 38 percent of local fintechs rely solely on technology for innovation (and not in building new business models).&nbsp;</p> <h4>The race for the bankless</h4> <p>Financial institutions—fintechs and traditional players—are hoping to strike gold by targeting the group of roughly 45 million Brazilians over 15 years old who still don&#8217;t have bank accounts. Every year, they make transactions adding up to BRL 820 million completely outside of the banking system—a figure that is close to the entire GDP of Portugal.&nbsp;</p> <p>Of every 10 bank-less Brazilians, seven declare themselves as either black or mixed-race, and only 6 percent have gone to college. They are used to making cash transactions, paying for items on tabs, and—when necessary—borrowing a relative or friend&#8217;s credit card for a purchase. Polls show that, for this part of the Brazilian population, banks are seen as inaccessible institutions.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/738629"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p>(In many cases, that is the truth—as Brazil has had no shortage of complaints from black bank customers about not being able to enter branches without undergoing degrading searches.)</p> <p>The high level of informality in Brazil&#8217;s economy means that many have no reason to seek financial institutions. In sectors such as agriculture, construction, and housework, the rate of informality is north of 50 percent. Together, Brazil&#8217;s unregistered workers earn BRL 51 billion every year.</p> <p>The companies which manage to convince these populations that it is more profitable to put their money into a bank, instead of under their mattress, will hit the jackpot.</p> <hr class="wp-block-separator"/> <h2>Pet tech, Brazil&#8217;s new trend</h2> <p>There are 140 million pets in Brazil—and startups are investing hard in this market. From companies offering 24-hour delivery of pet-related products to a sort of Tinder to match your four-legged friends with the perfect dog-walker, the sector has grown at a 29-percent rate over the past five years, and is set to raise BRL 36.2 billion in 2019.</p> <p>Truth be told, most of the apps designed for pets are little more than copies of existing services targeting humans. A few companies, however, are trying to innovate. ZenPet, a Minas Gerais-based startup has developed a &#8220;smart&#8221; food bowl for dogs, or water fountain for cats, which are connected to a mobile app that allows owners to control how much food their pets will have. Their products are set to be launched in 2020, with prices ranging from BRL 300 to 500.</p> <hr class="wp-block-separator"/> <h2>Illegal smartphone market soars with arrival of Chinese brands</h2> <p>The official <a href="https://brazilian.report/newsletters/daily-briefing/2019/05/21/unemployment-creates-a-profitable-business-for-brazilian-hackers/">arrival</a> of Chinese smartphone brands <a href="https://brazilian.report/money/2019/06/27/huawei-controls-telecom-infrastructure-brazil/">Huawei</a> and Xiaomi to Brazil had an undesired side effect on the Brazilian market, fueling the gray market for tech products. According to data from consultancy IDC, the informal market of smartphones—devices bought without any registration or support—jumped 659 percent in Q2 2019, compared to last year.&nbsp;</p> <p>The existence of the gray market is not exactly a novelty. Over the past decade, it has flooded the Brazilian tech environment, bothering big tech firms—but their low quality hampered any major success. What has changed now is that Huawei and Xiaomi have given a bigger shop window to alternative brands. Consumers can test their products in regular stores, and maybe opt for cheaper, unofficial versions.</p> <p>&#8220;The Brazilian market is highly sensitive to pricing, and if buyers see a less expensive option, that is what they will purchase,&#8221; says IDC. An unofficial smartphone costs, on average, between BRL 700 and 800. Meanwhile, official models start at around BRL 1,200.</p> <hr class="wp-block-separator"/> <h2>Internet Hall of Fame</h2> <p>Network scientist Michael Stanton has become the third academic to represent Brazil in the Internet Hall of Fame—created in 1992 to celebrate &#8220;visionaries who helped shape the internet.&#8221;&nbsp;</p> <p>Mr. Santon (who was born in Manchester, England), prompted the Brazilian government to build the country’s first national research network. The project, named National Research Network (RNP, now called National Education and Research Network), was launched in 1989—and Mr. Santon joined the coordination team that would ultimately bring the internet to Brazil in 1992.&nbsp;</p> <p>Today the scientist has adopted a highly critical stance about the business model of tech giants, which he considers to be based on data collection methods that are &#8220;too intrusive.&#8221; He currently dedicates his work to investigating the use of fiber optic cables in Amazonian rivers.&nbsp;</p> <p>The other names representing Brazil in the Hall of Fame are engineer Demi Getschko, credited for his &#8220;key role in establishing Brazil&#8217;s first internet connection,&#8221; and Tadao Takahashi, founder of the RNP.</p> <hr class="wp-block-separator"/> <h2>AliExpress, a Brazilian favorite</h2> <p>A poll conducted by payments startup Ebanx showed that Chinese e-commerce platform AliExpress is a favorite among Brazilian users. In 2018, 24 percent of online purchases in international marketplaces by Brazilians are made through the Chinese giant. Half of respondents said that pricing led to their choice. The company has responded to the success, reducing shipment delays to less than a month.