October 28, 2015 13:38 ET

Baidu Brasil Establishes Brazilian O2O Association to Represent $1 Trillion BRL Online-to-Offline Market

SUNNYVALE, CA--(Marketwired - Oct 28, 2015) - A group of 21 leading Brazilian technology companies and 3 investment funds announced on October 27th, 2015 the founding of the Brazilian O2O Association (in Portuguese, Associação Brasileira de O2O). The group, which was launched from the São Paulo office of China's leading search engine company Baidu, Inc. ("Baidu") (NASDAQ: BIDU), is the first Brazilian association to represent the online-to-offline (O2O) sector in an unprecedented initiative for the industry in Latin America.

"O2O" is an abbreviation of the term "online-to-offline," which is a business model that leverages online channels to sell services and products offline, and vice versa. Some well-known examples of the O2O model are smartphone apps used to book transportation like Easy Taxi or 99 Taxis, or apps like Grubster or Restorando that allow people to make a reservation at restaurants.

A recent study conducted by the newly formed Brazilian O2O Association estimates the potential for Brazil's O2O market at one trillion BRL per year, driven by the emergence of innovative services and the investment boom in the local O2O market. Local mobile Internet growth will also contribute to the expansion of the O2O market, according to the study. The total percentage of Brazil's population using 3G or 4G services is estimated to increase from 34.4% (2015) to 47.6% by 2018. Even considering the most conservative scenarios, the study reveals that the O2O sector's growth rate will remain in the double digits over the next several years, an index much higher than the rate recorded by the traditional economy.

"Even in this weak moment of the Brazilian economy we are living in during 2015, anyone who needs to hire a professional for housekeeping services, for example, finds problems to select a qualified one. Services like O2O can solve this imbalance between supply and demand, connecting professionals to the people or to the companies that need to hire them," said Fernando Okumura, vice president of the Brazilian O2O Association and CEO of the website Kekanto.

In some verticals like taxi orders and food delivery, O2O services already have strong support from Brazilian consumers. According to the Brazilian O2O Association's study, 20% of taxi bookings in most Brazilian cities are already carried out via smartphone apps. A similar level was recorded in the food delivery industry. One in five food delivery orders in Brazil is done via mobile apps. Taking into account all O2O verticals, however, Brazil is still in an early stage of development, which means there are significant opportunities for expansion.

The analysis conducted by the Brazilian O2O Association reveals that in the next few years the local market should experience an emergence of new O2O services, resulting in an increase in segmentation (new verticals), a phenomenon that has already occurred in mature O2O markets worldwide. As has already happened in developed markets, Brazil should also experience the emergence of "O2O app marketplaces", a kind of platform that combines different products and services into a single application with a single payment interface and a unique relationship channel with consumers.

Goals of the Brazilian O2O Association - "For the Brazilian O2O Association, the key objectives are to encourage the growth of the Brazilian O2O market, defend the interests of the local industry and support new startups to improve their consumers' experience by offering more intelligent and practical services," said Yan Di, Brazilian O2O Association president and general manager at Baidu Brasil. According to Mr Yan Di, the current Brazilian economy's momentum is suitable for the growth of O2O, since consumers and companies are being pushed by the crisis to look for more efficiency in their costs and operations, a central feature of O2O services.

Below, in alphabetical order, are listed all the founders of the Brazilian O2O Association:

  • 99 Taxis
  • Apontador
  • Baidu
  • ChefsClub
  • Confrapar
  • Easy Taxi
  • Emprego Ligado
  • Get Ninjas
  • Grubster
  • Guia de Motéis
  • HelpSaúde
  • Iguanafix
  • Loggi
  • Kekanto
  • Mercode
  • Moip
  • Monashees
  • Peixe Urbano
  • Rapiddo
  • Restorando
  • Trinks
  • Vaniday
  • W7 Venture Capital

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs trade on the NASDAQ Global Select Market under the symbol "BIDU". Currently, ten ADSs represent one Class A ordinary share.

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