Home-based businesses (HBBs) that have at least one PC in Brazil are set to spend a whopping US$13 billion on upgrading their ICT (info-communications technology) infrastructure this year, up some 8% over 2007, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc. The research firm defines HBBs as income-generating entities based in the home, led by individuals who are self-employed; it excludes individuals who work for a larger organization and telecommute, have a formal work-at-home arrangement with their employer or do after-hours work from home.
There are about 9 million HBBs in Brazil and these constitute about 17% of the 51.6 million households in this South American country. Brazil has 2.6 times more HBBs than SBs (small businesses, or companies in a commercial setting, with under 99 employees) and is ranked 4th worldwide in the number of PC-enabled HBBs.
“The number of very small Brazilian businesses beginning operations from home is rapidly increasing,” says New York-based Maria Carolina Guedes Smith, Senior Consultant at AMI-Partners. “This is transforming the home office into a key driver of business growth. HBBs in Brazil are likely to double their ICT spending this year.”
AMI’s recent study on Brazilian HBBs examines their IT buying behavior through three lenses:
- Formation behavior: The formation of an HBB is typically driven by four distinct kernels, which reflect the mindset of the founder. In Brazil, the entrepreneurs’ mindset represents the vast majority (57%) of HBBs. This is in stark contrast to HBB formation in India and China where the entrepreneurs’ mindset accounts only for 37% and 34%, respectively. After this come the soloists (32%) who are individuals motivated by greater financial opportunity or have inherited family businesses.
- Technology adoption/drivers: AMI-Partners has developed a framework with three phases of ICT adoption: Child, Adolescent and Adult. These stages shows HBBs’ different levels of technology adoption as they evolve in their organizational structure, process, standards, decision making, service needs and ecosystem of partners. In Brazil, most HBBs fall into the Child phase where they are still building up their basic infrastructure.
- Attitudes and purchase decisions: For every HBB dollar spent on ICT, 60% goes for telecom services (local and cell phone calls), and 19% on computing assets. “Most HBBs rely mainly on phone services to conduct their business while trying to get computerized to speed up their services,” says Mrs. Guedes Smith. “Moreover, due to the low PC penetration among Brazilian HBBs (38%), the majority of PC sales are driven by first-time buyers. The continuing decline in PC prices will also act as a catalyst for first-time PC buyers,” adds Mrs. Guedes Smith.
Given their numbers, size and ICT composition, there is a significant growth potential for ICT vendors to help HBBs develop their technology infrastructure. Vendors interested in pursuing this thriving immature market must carefully map this highly fragmented market segment in order to be as productive as possible.
About the Study
AMI’s 2007 Brazil Home Based Business Overview and Comprehensive Market Opportunity Assessment study highlights these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of HBBs across Brazil, this study track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to HBB market requirements.
The groundbreaking global HBB study was conducted over several thousand households across countries in North America, Latin America, Europe and Asia-Pacific regions. The study complements AMI’s long-standing coverage of the Global SMB market and provides actionable tactical and strategic insights for successfully targeting the HBB market – encompassing current adoption and future plans, attitudes, drivers, buying behavior, purchase outlets, market segmentation and related factors.
For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail ask_ami@ami-partners.com, or visit us at www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.
Contacts:
Quoted Analyst:
Maria Carolina Guedes Smith,
212-944-5100 ext 525
mcguedes@ami-partners.com
or
Media
Relations:
In US (New York):
Nancy Carty, 212-944-5100 ext 581
ncarty@ami-partners.com
or
In
EU (London):
Claudia Jachtmann, (44) 208 987 2756
cjachtmann@ami-partners.com
or
In
Asia Pacific (Singapore):
Matthew Foo, (65) 6220 5535 ext 101
mfoo@ami-partners.com
or
In
India (Kolkata):
Dipendra Mitra, (91) 33 4003 3093 ext 205
dmitra@ami-partners.com
