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| Felipe, IN Hsieh, COO of Baby.com.br and Josh |
It's a common refrain among Brazilian technology market observers that "Brazil is Social". But do the numbers back it up? The head of Facebook Brazil, Ricardo Sangion, and social media consultant, Peter Leech, offered some datapoints: 1) Brazil is the third most active Twitter market after the US and UK, generating 6.7% of all tweets. 2) Facebook currently has 25mm+ members in Brazil (compare that to 80mm internet users, and 200mm population). 3) Facebook grew by 11.4%, adding 2mm members in July alone.
A not-so-quick aside: Brazil has historically been Orkut-dominated so the Facebook stats don't fully capture the social activity. Anecdotally, it seems there is currently a shift away from Orkut to Facebook. I had one angel investor recently tell me that Orkut would be completely dead in two years. Take a look at Orkut's interface and games - you could start to wonder if you were back in the early 2000's. Surely the company that brought us Google+'s pleasing design didn't engineer this. They did, in fact, and with good reason. The company's continuing advantage over Facebook in Brazil actually comes from its simplicity. Many parts of the north and northeast of the country still have very slow internet connections. Facebook with its sophisticated videos, pictures, chat and news feed takes too much time to load. Someone is still milking money from the dying yellow pages - looks like Google may be pursuing the same strategy here.
There are three other trends from the presentations I want to highlight. The first is Facebook's creation of a "Top News" section of the News Feed. It has set off a frenzy in the tech world as companies try to decipher exactly what drives news to the top. According to the presenters, the algorithms, called EdgeRank, tend to locate posts as "Top News" if a) a picture/video is included b) it drives comments c) you have a strong connection to the person i.e. you comment on their posts often. 95% of users only look at the Top News section, so what's there matters.
The second trend is the use Facebook's Graph API (application programming interface, think of it as the code that drives the site). Companies (with your permission) can now incorporate data from Facebook directly into their sites. For example, Amazon can access your Facebook to offer you relevant birthday gifts for your friends around their birthday. In addition, Facebook is working on the ability to tell you not to purchase that purple shirt because your friend bought it yesterday. Cool, but somehow disconcerting.
The second trend is the use Facebook's Graph API (application programming interface, think of it as the code that drives the site). Companies (with your permission) can now incorporate data from Facebook directly into their sites. For example, Amazon can access your Facebook to offer you relevant birthday gifts for your friends around their birthday. In addition, Facebook is working on the ability to tell you not to purchase that purple shirt because your friend bought it yesterday. Cool, but somehow disconcerting.
Lastly, a trend called "Like-gating" has been gaining traction. Sites have started to request that you like their products on Facebook in exchange for incentives or access to special portions of the site. ShoeDazzle has been a master at this.
One other quirk of the Brazilian e-commerce markets is the power of the site Reclameaqui.com.br. When the founder, Mauricio Vargas, took the stage, even I could detect the reverance/fear felt in the audience. This is the site that can make or break an e-commerce startup. There, customers can go to complain about the service they receive from websites. Because Brazilians still don't totally trust e-commerce, they often start their buying experience at Reclameaqui. If companies aren't vigilant about dealing with complaints it can quickly dent their traffic. I struggle to think of a comparable site in the US with this much power. Mauricio said they had received several offers to buy the business from international conglomerates (including a South African one, which surely is Naspers) but have rejected them in favor of raising a financing round. When I talked to him afterwards he said the size would be "in the millions."
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| Head of Facebook Brazil, Ricardo Sangion |
One other quirk of the Brazilian e-commerce markets is the power of the site Reclameaqui.com.br. When the founder, Mauricio Vargas, took the stage, even I could detect the reverance/fear felt in the audience. This is the site that can make or break an e-commerce startup. There, customers can go to complain about the service they receive from websites. Because Brazilians still don't totally trust e-commerce, they often start their buying experience at Reclameaqui. If companies aren't vigilant about dealing with complaints it can quickly dent their traffic. I struggle to think of a comparable site in the US with this much power. Mauricio said they had received several offers to buy the business from international conglomerates (including a South African one, which surely is Naspers) but have rejected them in favor of raising a financing round. When I talked to him afterwards he said the size would be "in the millions."
P.S. I was also in Brasilia this past week to see the famed modernist architecture of Oscar Niemeyer and to join Mark in his meetings at the US Embassy and Ministerio de Fazenda (similar to finance ministry). Below is a picture of the view of the Capitol building from the cocktail roofdeck of the Foreign Ministry.
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