Ubiquity. That’s a cool word and also the reason for the tech giants’ dominance in the stock market. A good measure for traveling the world is world travel. As I have mentioned before RM column, I’m in Brazil now on a business trip, and being here is certainly a true test everywhere. It seems, FAANG run our whole life in America, but is there any growth for them in the world market? China is a tough man to solve, but there are no such boundaries here. So here is a brief look at some of the major US companies according to my own observations.
Alphabet (GOOGL) Google runs everything. Google is our dark ruler and we must obey it! Or something like that. Seriously, I’ve been using Google Maps and Google Translate at least 100x per day since I’m here. Also, since my Android phone doesn’t respond well when being dropped on the Sao Paulo road, I will likely buy another one here. Judgment, as always, is in the eye of the beholder, but I see zero threat here to Google’s dominance of everything, so I definitely haven’t found any reason to be negative on Alphabet’s stock on this journey.
Facebook (FB) WhatsApp is the country’s lingua franca. English, Portuguese, whatever, EVERYONE here communicates by WhatsApp. I not only use WhatsApp to arrange meetings with clients, I also see clients chatting on WhatsApp DURING my meetings. Whoa, disrespectful, man. But nobody pays to use WhatsApp, and while Instagram clearly has a youth market cornered here in the United States and valuable to advertisers, no one actually claims to use Facebook’s core product, “Big Blue.” Monetization is uncertain for Facebook corporate here, and it doesn’t exactly match FB’s $ 777 billion equity valuation.
Apple (AAPL) too expensive for this market. This is the country of Android (another Google reference) and iPhone 12 is not yet launched. As I noted in my first RM column in Brazil, GDP per capita here is in the range of $ 9,000 per year, close to Mexico or China. I saw an iPhone 12 Pro (with a 6.1 “screen instead of a 6.7” Pro Max) quoted at BRL 8,800 at electronics retailer Fast Shop, which is $ 1,650. People love their phones here as much as we love our phones in America, but it’s too expensive. A lower-end version of 12 can work fine here, but there is often criticism about the iPhone being “dissatisfied” for emerging markets, and I think such a product will do well if it is introduced here.
Cornershop is here! No, not the Britpop band that was so attractive in the 1990s (they performed “ Brimful of Asha ”) but a grocery shopping delivery service. As of writing this article, I had no idea that Chile-based Cornershop had been acquired by Uber (UBER) This year. The problem with Cornershop is that it is VERY labor intensive. So the Cornershop guy (or gal) in red would walk around the store – I’ve been to Carrefour’s “hypermercado” for my basics – take a look at his phone and just drop whatever item he ordered into the basket. I even saw a Cornershop guy go through the items, slowly and one by one, at a normal human-operated cash register. Where is the added value? This is very inefficient. Human capital may be cheap here, but it’s not free. Cornershop doesn’t bother anyone or anything.
On the other hand, Uber’s core service – a vehicle booking app – is invaluable here. I don’t have to speak Portuguese (horribly,) worry about taxi fares (transparent and stable prices) or carry enough reais to pay taxes, and, like in America, I even know exactly when the driver will arrive. Uber is VERY useful for international travel. Maybe the Cornershop folks use it to deliver their grocery orders, I don’t know.
I’ve seen some bus stop commercials for Amazon Prime video for BRL 9.90 per month (about two dollars) and while it’s the only streaming service I use in America, I haven’t found anyone here who subscribes. I also haven’t seen 10 million Amazon delivery vans on the way here. Amazon doesn’t dominate every aspect of everyday life here as it does in the US or as Google does anywhere in the world except China. Maybe that’s a good thing.
So, that’s the Brazilian tech rundown style. To quote Sergio Mendes, the digital economy is the “mas que tone” here, especially for Google, but some giants will generate higher revenues with a little more local knowledge. Bomb him!
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