Business

LABS+1: The impact of Amazon Prime on the Brazilian retail market, Mexico's new tax for streamings and an extra tip for the weekend

Take a look at this week's overview!

The streaming industry was the biggest star of the week (again), with two huge announcements on the same day: Amazon Prime landing in Brazil, with a combo that includes Amazon Prime Video and all the digital products, in addition to exclusive benefits in e-commerce; and Apple TV+ will be launched in Brazil and Mexico on November 1st. So far, so good. 

What really affected the market were the prices: both services will charge BRL 9.90 monthly, well below the BRL 19.90 that Netflix charges for subscriptions in the country. We hate to say this, but “we told you so,” Netflix. The company cannot say that it wasn’t expecting a stiff competition; let’s wait and see how they will answer it. 

While Netflix and Disney’s stocks dropped in the US after the announcements, and in Brazil the retailers were the first to be affected by this week’s launches. And in the middle of all this confusion, innovation is defining who stays or gets out of the game. Things have never been so clear: those who are able to solve problems and give consumers real benefits will run the world. 

And it is not an exclusive rule for the streaming and retail markets. This week Rappi took a step outside its comfort zone and announced a partnership with the real estate startup Housi to offer cashback in property rentals. To enjoy this benefit, the user must access the Housi option on Rappi’s app and choose the best rent option available in São Paulo. The consumer could receive up to 10% cashback in property rent through the subscription to a weekly plan and up to 20% for subscribers of the monthly plan–the maximum value could reach BRL 1,200.

Well, you may have noticed that this week was full of interesting business news, and it’s just the beginning. Check out the full weekly overview and don’t forget our tip for the weekend: 

4- Mexico could introduce a new tax on foreign digital business, such as Netflix and Spotify

Spotify could be affected by new Mexican tax

Following the example of other Latin American countries, such as Argentina and Colombia, the Mexican government might be finding a way of filling out some economic gaps by implementing a new tax for foreign audiovisual digital business in the country

Being one of the most important markets for streaming services, following Spotify’s statements saying that Mexico City has more users than any other city in the world, the government plans to use the new tax to fill up economic gaps. If approved, it is expected that the government could reach revenue of 3.6 billion pesos a year, around $ 180 million dollars, according to Reuters

3- Brazilian retail sector overcame market expectations and increased in July

Surpassing market expectations, retail sales are gathering pace. In comparison with the previous month (June), the increase registered was 1%, but in relation to 2018 July, the performance was higher – 4,3%. This is the fourth consecutive best result of the sector since November of last year. Information is from IBGE, the Brazilian Institute of Geography and Statistics

Six of the eight categories researched showed an increase in July, in comparison with the same month of 2018. Highlights came from personal and home care items (8.1%); health and beauty products (8.5%); furniture and home appliances (7.4%); and textiles, apparel, and footwear (6.6%). 

2- What comes after the digital transformation? SAP Brazil COO responds

trademark of the german company sap
Brazilian arm of German software giant SAP serves companies from various sectors in the country.

SAP is betting on a new approach to the market that the company calls the “Post-Digital Era,” an era in which, once the challenges of the digital transformation have been navigated, companies need to prepare for the “Economy of Experience”. The company itself began delving into the topic after the acquisition, at the end of last year, of Qualtrics, the Canadian company that specialized in experience management of their customers’ clients.

In an interview for LABS—granted the day before the German software giant’s SAP Now corporate event on September 11th and 12th—Adriana Aroulho, the COO at SAP Brazil describes how that new approach can leverage the potential of businesses in different sectors.

1- Brazilian retail giants are feeling the pressure of Amazon Prime’s arrival

Brazilian retail giants are feeling the pressure of Amazon Prime's arrival

Magazine Luiza, Lojas Americanas, B2W, and Via Varejo together lost BRL 4.75 billion–ending the day at the Brazilian Stock Exchange (B3) with a valuation of BRL 103.7 billion. The previous day, the retail giants were valued together at BRL 108.45 billion. In percentage terms, the most impacted company was Magazine Luiza, with losses of 4.97%. B2W placed second, with losses of 4.83%, followed by Via Varejo and Lojas Americanas–with the corresponding losses of 3.28% and 3.2%.

To face Amazon‘s aggressive strategy, the Goldman Sachs bank said, in a report, that Brazilian competitors will have to invest, showing flexibility. According to information from analysts in the institution, published by Brazilian newspaper Estadão, “even if the company doesn’t reveal its revenues in the country, we anticipate that the website is among the top ten of the e-commerce market in Brazil.”

LABS +1: Rock in Rio is coming and the LGBTQ+ singer Gloria Groove is highlighted as the biggest revelation of this edition 

The Brazilian media outlet G1 organized a contest for their audiences, asking who is expected to be the biggest revelation among all singers and, surpassing international names such as Bebe Rexha, Gloria Groove was chosen as the must-listen-to star of Rock in Rio 2019, showing how fast-growing the LGBTQ+ musical scene is in the country. The singer will be the second drag queen to perform in a Rock in Rio stage and her show will happen on September 27, alongside another two Brazilian artists, Karol Conka and Linn da Quebrada

But she is not alone, for the second name listed in the list is also a big artist of the Brazilian musical landscape: Baco Exu do Blues. The rapper born in Salvador city is considered as one of the great revelations in modern Brazilian rap and gained international attention when he won an award on the Cannes Lion, surfacing in Beyonce and Jay-Z‘s overproduction “Apeshit,” recorded at the Louvre Museum

The rapper will be performing in Rock in Rio on October 3rd with Rael, Agir, and Rincon Sapiência in a show called “Hip Hop Experience”.