Brazil is the 5th largest country in the world and currently the 13th most unequal country per the World Bank. Because of these factors, it is very challenging for any product or service to appeal to all social classes and to become completely widespread in Brazil as WhatsApp has. Since its introduction in 2009, the messaging app has grown to become the most popular app in the country, being used by roughly 85% of smartphone users.
WhatsApp is one the most popular communications app in the world, currently being used by over 1 billion users in almost every country. It was created by Jan Koum and Brian Acton, both former employees of Yahoo! In 2009. In 2014, when WhatsApp had only US$20 million of revenues, it was bought by Facebook for US$19 billion, in a transaction that involved both cash and Facebook stock as payment.
But why has “ZapZap”, a popular nickname to WhatsApp,grown so much in Brazil? With a minimum wage as low as R$880 (US$256), Brazilians are price sensitive and do not have income to spare with expensive mobile phone plans. In June 2016, Brazil had 251 million active lines, despite a population of roughly 200 million people, where Prepaid lines correspond to 70% of that number. This particularly high penetration of 1.25 lines per person is mainly due to carriers’ choice of offering free calls and SMSs to same carrier phones, which led individuals and small business owners to have one line of each carrier to always place and receive calls for free (example below).
And as mobile internet penetration in Brazil grew, reaching 84 million people (72% of all mobile phone users), users saw the opportunity to further reduce their mobile expenses by concentrating their communications to a single line and communicating to other carriers for free using the app. The ease of use of the App, that doesn’t need the user to create an account using the cellphone number as login, associated with group message functionalities and media sharing further fueled the fast adoption of WhatsApp.
Now, wide adopted, WhatsApp is changing the way people, businesses, politicians and journalists interact with each other:
- Businesses: SMEs have used WhatsApp both for promotion and to improve levels of client relationship. Salespeople use WhatsApp to communicate more frequently with customers, as well as customers use it for real time demands to service providers.
- Politics: In the latest Presidential election in 2014, candidates from both sides used WhatsApp to diffuse video and messages during their campaigns at no cost and relying on sharing through family and friends’ groups to reach the general population.
- News agencies: News agency and TV channels have leveraged WhatsApp to reduce lead times to report breaking news by getting leads directly from viewers and readers (see below).
Moving forward, the biggest challenge to this new operating model is regulation. Justice has already blocked WhatsApp in Brazil three times because of drug-related investigations, where Facebook/WhatsApp refused to track messages from potential drug dealers, affecting almost 100 million users. Without any regulation, there is no way to guarantee that the app will not be used for illicit purposes. Also, there is no way to avoid judges investigating those cases to continue to block the app and affect millions of people and SMEs all over the country.
Nonetheless, WhatsApp in Brazil continues to grow in both number of users and intensity of usage and the absence of competitors’ reaction seems to indicate that it will continue to reshape communications all around the country.
 Deloitte Mobile Consumer Survey – https://www2.deloitte.com/content/dam/Deloitte/br/Documents/technology-media-telecommunications/GMCS2016-Brazil.pdf
 As of 11/15/2016 – 1 USD = 3.44 BRL