The chaotic, mind-boggling world of the Internet keeps spreading its million wings all
over the planet. In Brazil, more than one million users are already connected to
cyberspace. Brazilians' swift response to the revolution on the information highway
follows the booming of the nation's computer market, which has placed Brazil as Latin
America's leading force in the acquisition of modern technologies. The visible result of
the growing computer sales is the country's strong presence on the Internet, with an
increasing number of web sites brimming with personal, educational, governmental and
business information. It was not until 1990 that the RNP (Rede Nacional de Pesquisa—National Research
Network), an entity linked to the Ministry of Science and Technology, was created to
provide Internet access to the scientific community. Before then, Brazilian universities
and technological institutions were connected to overseas computer networks via Bitnet, a
network similar to the Internet, but with only file transfer and e-mail services
available. In April 1995, the government decided to launch an integrated network between
academic and business institutions, and RNP began acting as a nationwide Internet network
for private service providers. Today, RNP's extensive backbone connects most of the
country's states to the Net. However, Brazilians' efforts to become part of this broad networked society has not
been without challenges. In addition to the struggle to understand such a complex and
anarchic source of information, their troubles are compounded by precarious telephone
connections, high Internet access charges, and poor technical and customer service support
offered by the numerous newly established Internet Service Providers (ISPs). On top of
that, users pay time-based charges on local phone calls, which raises the costs of even
moderate Internet use to unaffordable levels for most segments of the Brazilian
population. USERS PROFILE Last year, Cadê? (the Brazilian equivalent of Yahoo ) and IBOPE (Brazil's largest
market research institute) teamed up to conduct a survey among 18.225
"internauts". The results revealed that Brazilian users are at the top of the
country's income pyramid, with two out of three respondents (64%) having a monthly family
income of more than 20 times the minimum wage of R$120 (approximately $109); another 21%
earn more than 50 times that amount. Furthermore, Brazilian users represent the most highly educated segment of the
population, whereas 37% have a university degree; 40% have a high school diploma or are
currently attending school; and 62% speak English—although the knowledge of the
language is more prevalent among young users, with 70% of these being bilingual. As for the respondents' occupational profile, one out of four (24%) owns a business or
is an executive, while 22% work with computers or in related areas. Another 7% work in
administration, and the rest of users have occupations in a range of different areas. When
it comes to gender and age, the survey clearly shows that Brazilian women are still
unfazed by the new trend, with 8 out of ten Internet users being male, while 78% of all
respondents are between 15 and 39 years of age. However elitist the profile may be, the presence of such a large number of affluent
users hasn't gone unnoticed by Brazilian businesses. Although the Cadê?/IBOPE survey
revealed that news pages are the main destination on the Net for 82% of the respondents,
it also showed that 18% of users (of which 20% are men, against 9% of women) have bought
something on-line, and 68% indicated interest in buying from the Net some day. Which opens
a flood gate for Brazilian companies to the promising electronic commerce. VIRTUAL BUSINESS Despite pessimistic talks about the profitability of electronic commerce in view of its
slow growth since the Internet boom, an increasing number of Brazilian companies—big
and small—are betting on the market potential and establishing themselves on the Net.
Over 17 thousand businesses have done just that, facing the risks involved in such a
pioneering environment, while trying to adjust themselves to the reality of the digital
world. In the United States, major enterprises have long realized that making money on the Net
is not an easy task, yet setting up a Web site has become a must for most of America's
Fortune 500 companies. The lesson learned by American businesses was that, instead of
focusing primarily on increasing revenue through direct sales, they could reduce
transaction costs immensely by both marketing their products on the Internet and by
providing on-line customer service to their clientele. Brazilian firms are gradually assimilating the dynamics of a successful participation
in electronic commerce. Take, for instance, Credicard, which holds 50% of the country's
credit card market. The company expects to save close to $10 million a year, by increasing
on-line customer support, and subsequently reducing the high costs of its toll-free phone
operations. However, it took two years after the set-up of its first Web site for
Credicard to realize that its initial expectations to make money by attracting new credit
card holders on-line was completely misguided. The company learned that most visitors to
its site had already a credit card and were looking for account information and other
convenient customer service add-ons, which led Credicard to the creation of a whole new
site based on its customers' demands. On the other hand, reducing transactions costs for the vendor alone is not enough to
attract potential buyers. The ability to offer unique new services may also explain why
some on-line businesses will fare better than others. GPO Empreendimentos Imobiliários is
a good example of a company with a well-conceived Internet marketing strategy. The Mineiro
(from the state of Minas Gerais) real estate conglomerate maintains a page on the Net
since October 1995, and it was the first Brazilian company of its kind to set up a Web
site. In addition to its own page, GPO also created a real estate directory (see
"Interesting Sites") which has become the sector's largest on-line classified
ads. Free of charge, the ads are a great source for private parties, building contractors,
realtors, insurance companies and anyone interested in researching real estate prices.
According to GPO's marketing director, Ariano Cavalcanti, Internet sales account for only
5% of the company's revenue, yet he is a strong believer in the potential of electronic
commerce, and credits the medium for expanding GPO's businesses both domestically and
abroad. Among other reasons, Cavalcanti—like many Brazilian executives—also blames
the insignificant Internet sales on consumers' "ignorance and subsequent
prejudice" against on-line transactions. Brazilian users fear, for instance, that
their credit card numbers could be stolen by hackers, although more and more virtual
stores use software that encrypts this type of information—besides the fact that
there is no evidence that credit card numbers have been stolen over the Net yet. The reality is that the industry players are still struggling to define Internet
commerce, but the ultimate potential of on-line business remains indisputable, which can
be attested by the rapid growth of Brazilian virtual malls. (See "Interesting
Sites".) WEB OF OBSTACLES While businesses try to figure out ways to overcome Brazilians' resistance to on-line
shopping, the users themselves have plenty of problems of their own. For one, the ever
increasing number of ISPs operating in Brazil often accepts more customers than they can
handle, which makes all but impossible to get an available phone line. It is not unusual
for users to be without Internet access for nearly a week, as can be confirmed by Rio de
Janeiro resident Rainer Hopperdietzel. The German expatriate, who uses the Internet mostly for his work as a chemical engineer
and technical translator, has changed ISPs four times in a period of twelve months, and is
currently looking for a fifth one. According to Hopperdietzel, finding a good provider
requires extensive price research and luck, above all. What is even more frustrating, he
says, is that "whenever users have a connection problem, ISPs always try to blame us
for it. Furthermore, to reach live technical support can take several days and attempts
through phone calls often handled by answering machines, message services and faxes that
can get totally ignored, as it happened to me with my first ISP." To add insult to the injury, the high prices charged by ISPs can range from $3 an hour
to close to $109 for unlimited access. (The latter deal is offered by Brasilia's APIS -
Internet Solutions, although most providers charge for limited usage as per monthly
hours.) IBM, for instance, charges $36.15 for 12 hours, plus the same amount for the
enrollment fee, and $2,50 for each additional hour. Yet complaints about the company's
services abound, specially among Carioca (from Rio de Janeiro) users. IBM is said
to perform better in São Paulo, but for some obscure reason its users must take a long
road to Florida, with a stop in New York, just to access a page from a Rio de Janeiro
server, which only increases the risks of inadequate connections. Users' troubles don't stop here. Brazil's obsolete telecommunications system is also
responsible for painfully slow connections. For one, very few phone carriers work with
digital lines, which means that the speed of information is transmitted at 30 bits per
second—or nearly a thousand times slower—for those using a 28,800 bps modem. It
is also estimated that for every 100 local phone calls placed in the country, only 45 to
50 are completed, while 35 to 42 get a busy signal or no answer, and 6 to 16 are not
completed at all due to system failures. In Rio de Janeiro, the nation's second largest
concentration of internauts after São Paulo, frustration with local phone company Telerj
runs so high that it led to the creation of a Eu Odeio a Telerj (I Hate Telerj) Web site
by one of its users. (See "Interesting Sites".) Says Hopperdietzel: "When complaining about ISPs one has also to take in
consideration the difficult conditions under which they operate, dependent as they are on
the ailing national phone network. Bottom line, the whole structure is rotten." Despite all the problems, the collapse of Internet connections for Brazilian users is
unlikely to happen, given the determination of the government to proceed with the
privatization of the telecommunications sector, which will undoubtedly bring the much
needed modernization of the system. Greedy and inefficient ISPs will in turn be forced out of business by major industry
players, such as TV mogul Sílvio Santos whose group recently invested around $7 million
in the ISP market. His newly created enterprise, SBT On Line (http://www.sol.com.br), is
already present in 2.855 Brazilian cities, offering Internet access for $32 a month for
unlimited hours—still an expensive rate compared to those charged in the United
States, but by far the best bargain in Brazil so far. Brazilian Embassy in Washington D.C.
- Portuguese and English. Links to numerous Brazilian and Brazilian-related sites:
business and finance, federal and state governments, research institutes, tourism,
weather, culture and education, environment and human rights. <http://www.brasil.emb.nw.dc.us/> Brazilian Business Connection -
Portuguese and English. For foreigners seeking commercial ties with Brazil. Links to many
different types of businesses, big and small—from local bars to multinational
companies; services, fashion, and much more. <http://www.brazilbiz.com.br>
American Chamber of Commerce - Brazil -
Portuguese and English. Extensive information on business, economics and politics between
Brazil and the US. Links to Rio's and São Paulo's branches of AMCHAM. <http://www.amcham.com.br> São Paulo Stock Exchange - Portuguese
and English. For the latest stock bulletins <http://www.bovespa.com.br>
Rio de Janeiro Stock Exchange
- <http://www.embratel.net.br/infoserv/bvrj
> Economia & Negócios -
Mostly Portuguese. Exchange rates between the Brazilian real and the U.S. dollar, plus
links to Universal Currency Converter and to other Brazilian and Latin American economic
indicators. <http://www.super.com.br/home/econeg.htm>
NETimoveis - Portuguese. Extensive
data on real estate market, including free classified ads. <http://www.netimoveis.com.br> Shopping Virtuais
- Portuguese and English. Virtual shopping directory, from supermarkets, department stores
to Mercosul businesses. <http://www.sercomtel.com.br/cswbrasil/shopping.htm>
Eu Odeio a Telerj
(I Hate Telerj) - Portuguese. Good-humored page created by frustrated Telerj user
Rômulo Fritscher. The site has over 500 messages of support to Fritscher's anti-Telerj
campaign as well as complaints from other unsatisfied users, whose tales border on the
bizarre. <http://www.pagebuilder.com.br/odeioatelerj/welcome.htm>
Marta Alvim is a Brazilian journalist, freelance translator and
interpreter. You can reach her at mltdalvim@yahoo.com com.br
The number of Internet users in Brazil has surpassed the 1 million
mark and the country is catching up fast with the most Net-savvy countries after a late
start on the information highway. Brazilians' efforts to become part of this new wired
society have been extremely tough due to precarious telephone lines and computers'
prohibitive prices, to local telephone fees, to Internet providers. Betting on the Net
market potential, over 17 thousand businesses have set up shop on cyberspace oblivious to
these drawbacks.
Marta Alvim
INTERESTING
SITES
