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Tech Roundup: How small businesses can go digital

. Feb 19, 2021
E-commerce will continue to boom in 2021 Photo: Monkographic/Shutterstock

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: Google’s new Brazilian partner; e-commerce perspectives for the year, and ClubHouse enjoys success in Brazil.

How small businesses can go digital

With the in-person economy halted for months in 2020, most businesses were forced online. Michelin star restaurants offered delivery services and retailers had to adapt to selling via the internet.

However, this transition took place in an unplanned manner, with many businesses simply using WhatsApp Messenger as a rudimentary e-shop.</p> <ul><li>São Paulo startup Napp Solutions teamed up with Google to help small companies move into the digital age.</li></ul> <p><strong>How it will work.</strong> In simple terms, Napp connects to management software and allows vendors to supply their customers with information about stock and new products. With Google, this data would appear at the top of search engine results in the form of ad cards.</p> <ul><li>When searching for a product, consumers are able to check its availability in nearby stores, thus helping local businesses to fend off competition from major retailers. When stocks run low, ads are hidden in order to avoid negative customer experiences.</li><li>The company started as a business intelligence consultancy for shopping malls and claims it is now connected to over 800 softwares used by 80 percent of Brazilian retailers.</li></ul> <p><strong>What they are saying.</strong> &#8220;Giant retailers such as Bust Buy or Walmart have this kind of product, but it requires a massive structure. We&#8217;ve created something simpler, allowing any retailer to have Google ads with real-time stocks,&#8221; said Napp CEO Luis Fernando Vidigal, in a recent <a href="https://exame.com/inovacao/colocando-estoques-online-startup-fecha-parceria-com-google-para-digitalizar-negocios-fisicos/">interview</a>.</p> <p><strong>Why it matters.</strong> Despite the sluggish economy, e-commerce will continue to be the driving force of retail in Brazil (see more below).</p> <p><strong>Growth plans.</strong> Mr. Vidigal says his company is only the eighth such Google partner in the world, and the first in Brazil. By the halfway point of the year, he intends to expand Napp&#8217;s operations into other countries.</p> <hr class="wp-block-separator"/> <h2>E-commerce will continue to boom in 2021</h2> <p>Following global trends, the coronavirus pandemic caused a major boost to e-commerce in Latin America. Brazil rose ten slots in the latest edition of the <a href="https://unctad.org/system/files/official-document/tn_unctad_ict4d17_en.pdf">B2C e-commerce index</a>, in which the United Nations Conference on Trade and Development (UNCTAD) ranks 152 countries on their readiness to engage in online commerce.&nbsp;</p> <p>And the sector will continue to rise. Estimates from market intelligence firm Neotrust have e-commerce revenues in Brazil growing 18 percent this year, building upon the record BRL 126 billion raised in 2020.</p> <ul><li>&#8220;Brazilians are more confident about buying online and use the web to purchase both expensive and cheaper products,&#8221; said Neotrust CEO Fabricio Dantas, in a statement. &#8220;People will continue to use e-commerce a lot even after their lives return to normal.”</li><li>Despite gaining 20.2 million new customers in 2020, data shows that e-commerce still only reaches 18.4 percent of Brazilians with internet access.</li></ul> <p><strong>Spread it around. </strong>An analysis of the 2020 data indicates some high growth niches to be exploited by e-commerce firms in 2021. According to the report, while the Southeast region accounts for 65 percent of sales in the country, the Northeast saw the highest growth rate. Sales in the region rose by 2.1 percent, accounting for 14 percent of all online purchases in Brazil.</p> <p><strong>Save the date.</strong> While the e-commerce calendar is highly centered around end-of-the-year events such as Black Friday and Cyber Monday, the sector is seeking to expand to other important dates.</p> <ul><li>Ahead of Consumer Day on March 15, a recent survey by Social Miner and Opinion Box shows that 56 percent of the people inclined to make a purchase on the occasion would rather use online stores. That share rises to 61 percent among consumers aged 30 to 49 — a group that represents the bulk of Brazil&#8217;s online consumers.</li><li>However, omnichannel strategies are crucial to reach other target audiences, such as lower-income citizens, who are traditionally keener on click-and-collect services.</li></ul> <hr class="wp-block-separator"/> <h2>ClubHouse becomes the new trend in Brazil. For how long?&nbsp;</h2> <p>Brazil adores social media, so it comes as no surprise that the country became the <a href="https://www.linkedin.com/news/story/clubhouse-atrai-aten%C3%A7%C3%A3o-de-empreendedores-5374994/">sixth-biggest market</a> for the latest internet sensation: audio-based social network ClubHouse. In just two weeks, 308,000 users signed up to the iPhone- and invite-only platform.</p> <p><strong>VIP.</strong> ClubHouse became a worldwide phenomenon after Tesla CEO Elon Musk <a href="https://br.investing.com/news/technology-news/debate-de-elon-musk-com-presidente-do-robinhood-impulsiona-popularidade-do-aplicativo-clubhouse-827483">joined a debate</a> with Vlad Tenev, CEO of trading platform Robinhood. The possibility of listening in on talks by <a href="https://www.vogue.com/article/everything-you-need-to-know-about-clubhouse">celebrities</a> such as rapper Drake or actor Ashton Kutcher turned ClubHouse into a success, with over 7 million downloads during its beta stage.&nbsp;</p> <ul><li>In Brazil, where Apple holds a mere <a href="https://www.statista.com/statistics/262167/market-share-held-by-mobile-operating-systems-in-brazil/">13-percent market share</a> and iPhones cost the equivalent of 10 minimum wages, ClubHouse soon became a high-profile networking tool for the <a href="https://www.infomoney.com.br/negocios/clubhouse-descubra-por-que-empreendedores-estao-usando-a-rede-social-e-como-ela-pode-ajudar-seu-negocio/">startup jet set</a> and financial traders.</li></ul> <p><strong>Parallel market.</strong> The fact that ClubHouse remains invite-only has created a parallel market of <a href="https://g1.globo.com/economia/tecnologia/noticia/2021/02/12/clubhouse-convite-para-o-app-de-audio-e-oferecido-por-mais-de-r-600-na-web.ghtml">selling said invites for inflated prices</a>. Also, Sensor Tower reports that Android apps also named ClubHouse are experiencing an increase in downloads, as people mistake them for the new social network.&nbsp;&nbsp;</p> <p><strong>How long will it last?</strong> Digital expert Fernando Moulin believes that ClubHouse has the potential to expand its role as a niche social media platform in Brazil, considering the country’s eagerness for news and heavy social media usage. However, the app will become less exclusive once opening its doors to Android users. Also, he warns that “larger social networks, such as Twitter and Facebook, are working on adopting similar functions, which may absorb the traffic ClubHouse is getting today.”</p> <hr class="wp-block-separator"/> <h2>Take note</h2> <ul><li><strong>Investment.</strong> Earlier this year, Asian mega investment conglomerate SoftBank announced it intended to pour USD 1 billion into Latin America in 2021. The first move happened on Thursday, as SoftBank led a group of investors that pumped USD 83 million into Brazilian test-prep startup Descomplica. Read more on <a href="https://brazilian.report/newsletters/brazil-daily/2021/02/19/bolsonaro-threatens-to-interfere-in-petrobras/">today&#8217;s Daily Briefing</a>.</li><li><strong>Credit.</strong> Nubank launched a new function this week in an attempt to boost credit offers in Brazil. The bank will allow current account customers to reserve a portion of their bank balance to use for credit functions. In a <a href="https://blog.nubank.com.br/cartao-para-adicionar-limite-no-nubank/">blog post</a>, Nubank said this will allow consumers to build a credit rating and subsequently have easier access to credit cards.&nbsp;</li><li><strong>M&amp;A 1. </strong>Cybersecurity security company PSafe and AI-focused startup CyberLabs <a href="https://www.convergenciadigital.com.br/cgi/cgilua.exe/sys/start.htm?UserActiveTemplate=site&amp;infoid=56132&amp;sid=18">announced</a> they will merge to become Latin America’s biggest cybersecurity company, with BRL 100 million in revenue. The deal has the support of Venture Capital fund RedPoint E-Ventures, which has invested in both companies.&nbsp;</li><li><strong>M&amp;A 2. </strong>HR-tech Vee Benefícios and French scale-up Swile announced they will combine forces in Brazil, granting Vee BRL 200 million to invest in the local market. Together, both companies aim to grow by 500 percent in 2022, offering benefits to 1 million employees and reaching BRL 2 billion in revenues by 2022.</li><li><strong>Data breach.</strong> Data privacy advocates from Instituto Sigilo have <a href="https://link.estadao.com.br/noticias/cultura-digital,acao-pede-multa-de-r-200-milhoes-ao-serasa-pelo-megavazamento-de-dados,70003618813">filed</a> a BRL 200 million lawsuit against credit bureau Serasa following the data breach that exposed the information of 223 million people and 40 million companies last month. The leak included files from the Serasa Mosaic system, though the company denies any breach of security.&nbsp;</li><li><strong>Telecom.</strong> The Supreme Court ruled in favor of allowing telephony and internet companies to install cables in public places without paying fees to municipalities. The court <a href="https://www.poder360.com.br/brasil/operadoras-de-telefonia-podem-passar-cabeamento-em-locais-publicos-sem-pagar/">states</a> that it is in public interest to facilitate the implementation of telecommunication services as a way of democratizing access to technology.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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