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Brazil O2O Insight Report – 2015
What is O2O?
Alex Rampell, Co-founder of TrialPay, coined the term "O2O" in 2010, which refers to the business model that leverages online channels to acquire offline services & products, or VICE VERSA.
. . . �
O2O Definition
How Does O2O Fit Into Brazil’s Reality?
A growing young population demands more quality services. Brazil’s mainstream workforce is much younger: Brasil 41% vs. China 33% in the Y+Z Generation.
Brazilian population will keep growing up to 225MM, until 2040.
Fonte: Population Pyramid
Population Factor
O2O is a smart way to pursue service and user experience perfection, instead of pure technological revolution.
1% Brazil invests +-1% of its GDP in its current
R&D, compared to +-2.8% in the US
Fonte: Wikipedia
Technical Competitiveness
Local Brazilian O2O players understand and are deeply rooted in the local offline business operation.
Global giants don't & won't do "Dirty Work".
Natural Barrier
Why is O2O The ‘Next Big Thing’ in Brazil?
Fonte: Teleco – Baidu BI Internal Data
Even with the largest number of housekeeping workers in the world, it is still hard to find overqualified workers.
7,233
4,206 2,405 1,926 1,851
Domestic Workers by Country (Top 20) in MM
O2O Boom Prerequisites Met – Unbalanced Info Flow
Fonte: Teleco – Baidu BI Internal Data
42 52
Brazil (U$ Bi) China (U$ Bi)
O2O Boom Prerequisites Met – Overproduction
The Brazilian Beauty Market in 2012 compared with that of China’s, a country with a population 7x bigger.
Fonte: Teleco – Baidu BI Internal Data
Average Rate of a Hotel Room
₤ 77.00
₤ 82.00
₤ 86.00
₤ 90.00
₤ 92.00
₤ 104.00
₤ 109.00
₤ 118.00
₤ 147.00
₤147.00
China
India
UK
Germany
Japan
France
Italy
USA
Russia
Brazil
O2O Boom Prerequisites Met – Service Fee Inflation
205,500
382,400 436,100
519,700 574,200
624,700 672,100
704,100
2011 2012 2013 2014 2015 2016 2017 2018
19.0%
26.3%
33.1% 38.5%
42.2% 45.5%
48.6% 51.6%
China Smartphone Penetration
Smartphone Users
China Entered into the Fast O2O Development Phase in 2013, followed by Its Smartphone Penetration Rate exceeding 30%.
12,100
21,600 27,100
38,800
48,600
58,500
66,600 71,900
2011 2012 2013 2014 2015 2016 2017 2018
7.0%
19.0% 20.8%
28.3%
34.4%
40.4% 45.0%
47.6%
Brazil
Fonte: Emarketer – Teleco 2015
Smartphone Penetration
Brazil’s Smartphone Penetration Rate Exceeded 30% Starting in 2015.
Smartphone Users
O2O Boom Prerequisites Met – Mobile Broadband Ready
Current O2O Scenario in Brazil
300
300
116
48
37
25
20
10
8 6 1.9
1
HOME IMPROVEMENT
GROCERY DELIVERY
FOOD DELIVERY
OTA BEAUTY MOTOBOY TAXI JOBS WEDDING MOTEL MOVIE TICKET TABLE RESERVATION
R$ BILLION
Fonte: ABO2O
R$1 TRILLION
This is a R$ 1 TRILLION Market
Empresa Tipo $ Ativos Gerenciados Ex 1 Ex 2 Ex 3 Escritório
LatAm
VC/PE $ 62 Billion SP
PE $ 17.4 Billion SP
VC/PE $ 10 Billion NO
VC $ 9 Billion NO
VC $ 7.5 Billion SP
VC/PE $ 8 Billion NO
VC/PE $ 4.4 Billion NO
VC/PE SP/RJ/MG
VC $ 640 Million SP
VC $ 270 Million SP
VC/PE SP
VC $ 230 Million SP/BA
Fonte: Tech Crunch and Lavca 2015
O2O is Where the Investment is
Groupon’s initial services
(Web only)
Peixe Urbano & Groupon enter
the O2O market (Web only)
O2O takes on the mobile format
through taxi apps, mobile payments,
etc. Fast O2O growth in
mobile
O2O mobile apps appear
O2O Mobile services reach a new height of
penetration
2008 2015 Future
Will an O2O marketplace
be born?
O2O spreads to secondary
cities
2013 2014 2010
EARLY STAGE
EARLY STAGE
INITIAL STAGE FAST GROWTH
FAST GROWTH INITIAL STAGE
2012
2 years gap
Fonte: AppAnnie – Baidu BI Internal Data
2015 Future 2013 2014 2010 2012
2 years gap
Current Stage: 2~3 Years Behind China & Into the ‘Fast Growth’ Stage
55% YoY
56% YoY
360% YoY
-13% YoY
94% YoY 44% YoY
222% YoY
45% YoY
229% YoY
240% YoY
OTA
Taxi
Food
E-Learning
Group Buying
Review
Real Estate
Cars
Tickets
Room Rental Logistic
Pet
Housekeeping
Motel
Reservation
Top 15 Downloads on iOS & Android
Fonte: AppAnnie June 2015– Baidu BI Internal Data – Teleco 2015
104,897
406,589
1,060,000
518,418
1,177,092
356,503
1,339,369
1,535,600
1,671,423
1,690,904
2015 2014
Top 15 Downloads on iOS & Android Top 15 Downloads on iOS & Android
9,702
528
413
46,419
188,897
28,481
31,024
66,584
195,073
223,019
2015
18% YoY
320% YoY
16K% YoY
5776% YoY
194% YoY
1,800,162
4,060,066
884,758
3,500,342
3,350,149
2,787,330
3,546,495
4,072,278
5,458,863
6,490,172
2015 2014
O2O Growth is Mobile-First
Food Delivery OTA Taxi
According to SPC Brazil, online
delivery orders represent 23% of total sales; 40%
are in pizza delivery.
Fonte: Associação Pizzarias Unidas, SPC Brazil, Associação Brasileira de Bares e Restaurantes (Abrasel )
Almost 20% of internet users called a taxi at
least once in the last 6 months.
1 in every 5 Brazilian
smartphone users buys
tickets online.
Movie Tickets
Fonte: Panorama Mobile Time/Opinion Box: M-commerce no Brasil
According to
Criteo, 57% of leisure travelers book their flights
online.
Fonte: Panorama Mobile Time/Opinion Box: M-commerce no Brasil. And Emarketer
Fonte: Panorama Mobile Time/Opinion Box: M-commerce no Brasil
O2O is Changing Consumer Behavior Drastically
Outlook on Brazil’s O2O
Fonte: ABO2O
50%
50%
42%
35%
30%
30%
14%
10%
OTA BEAUTY TICKETS TAXI WEDDING MOTEL JOBS MOTOBOY
YOY GROWTH 2015-2016
Upcoming Fast Growth in O2O
Brazil
19%
18%
45%
8%
10%
OTA
Taxi
Food
Group Buying
Tickets
China
Fonte: AppAnnie June 2015– Baidu BI Internal Data.
OTA
Food
Group Buying
Taxi
Tickets
42%
27%
14%
12%
5%
Initial Stage Growth Stage
Evolution: Verticals vs. Marketplace
Vertical China Brasil Educação X X
Imóveis X X
Recrutamento X X
Lavanderia X
Impressão X
Casamento X X
Reciclagem X
Decoração X X
Motorista de Aluguel X
Reparos X
Logística por Motos X
Chef em domicílio X X
Serviços para Pets X
More Sub-Verticals to Come in Mobile
Group Buying
Free WiFi
Hardware /OS
Review
The O2O Marketplace is Not One, But Many
Services Services
Services Services
Services Similar to the mobile Internet, O2O is evolving towards a fragmented ecosystem of “Carrier Battle Groups”: Multiple Marketplaces & Multiple Vertical Services.
User Experience: convenience, efficiency, cost
Business Model: transaction-driven, close the loop w/ payment
Evangelization: promote best practices, awareness among users, merchants and players
Investment: dedicated financial/traffic/technology resources
Brazil’s Challenges in O2O
Thank you!
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