Text | Zhou Tian Finance
Brazil, a middle-income country with a population of 200 million, is far from China politically, economically, culturally, and even jet lag, and in such a strange land, Internet applications from China have begun to set off a phenomenal storm, and Chinese brands seem to have found some ways to survive in the "City of God".
In this football kingdom, the top giants Flamengo are comparable to kings. The new season is about to be unveiled, and a familiar camera-like logo and the word Kwai appeared on Flamengo's new jersey, a change that was quickly discovered by the fan base and sparked heated discussions, "After 22 years of the South Korea-Japan World Cup, it is Kuaishou Lao Tie who is in the same frame with Brazilian football again!"
Flamengo is the favorite team of Brazilian fans, Pele, Zico, Ronaldinho ...... Many of the world's biggest names have played here, and Vinicius, who is now a regular striker for the Brazilian national team and Real Madrid, has been training here since he was 10 years old. As a club with a long history of football tradition, Flamengo has not sold its shoulder trademark for some time, and its main sponsor on the chest has always chosen Old Money with strong local genes, such as banks. Now, choosing to cooperate with Kuaishou from China is undoubtedly a bold attempt.
01 Brazil's resources are in the light and the local survival is in the dark
Brazil occupies most of the South American continent, with a population of more than 200 million, a superior geographical location and abundant natural resources, at the beginning of the last century, Brazil had 130,000 industrial enterprises and a total mileage of 27,000 kilometers of railways, making it one of the few industrial powers in the world. The above is fully in line with people's definition of a "big country". Therefore, as early as the early 80s, the first choice for Chinese companies to go overseas to Latin America was Brazil.
However, there are very few companies that have a foothold in Brazil, and in the words of Ye Zhouyong, president of the Brazilian Chinese Association, "Brazil is like a ten-mile ocean, free and dangerous, and everyone wants to be Xu Wenqiang." Complex regulations, up to 58 tax systems, alternating regimes, and turbulent times have made it difficult for many Chinese companies to replicate the successful experience of China and even other overseas regions.
Taking the field of smartphones as an example, Brazil is the world's fourth largest smartphone market, except for Motorola, which is classified as Lenovo, it is difficult for Chinese mobile phone manufacturers to grab the market in Brazil. According to the 2023 data released by market research agency Canalys, Samsung and Lenovo occupy 67% of the market share in the Brazilian smartphone market, Apple accounts for 10%, and the rest of the brands share 23%. Even Huawei lost money in Brazil for 10 years before slowly becoming profitable. An employee of ZTE Brazil once said, "Brazil is the most difficult market to do, there is no one".
In the Internet era, with the blessing of a huge population base and a young social form, Brazil has also become a hot spot for Chinese Internet companies to go overseas. According to Meltwater research, Brazil has 187.9 million internet users in 2023, with a penetration rate of 86.6%, and social network users account for 66.35% of the total population. What's more, the average age in Brazil is only 33.8 years, and 99.1% of the population aged 16 to 24 own a smartphone, and almost everyone uses a mobile phone to access the Internet. I have to say that this is a huge blue ocean market. But unfortunately, more and bigger cakes on the hot land are almost eaten by local giants, and in the eyes of outsiders, the local business in Brazil is like a complex road and the rules of survival in the slums, which can coexist but cannot coexist. Zhang Zhen, co-founder of INFLUU, an overseas live streaming platform, said, "There is a threshold for doing Brazil. 」
Source: Meltwater
This also reflects the two sides of going to sea, one side of the sun is a great wealth of regional resources, and under the shadow is a very different local environment, even if a certain area is done well, it is still difficult to integrate into the new place with the perspective of the so-called dimensionality reduction strike.
In contrast, Kuaishou's entry into the Brazilian market has been relatively smooth. From 2021 to the end of 2023, Kuaishou overseas version Kwai has been the sponsor of the Brazilian national men's football team and women's football team, in addition to the regular promotional logo, it also has the exclusive right to interview before and after the game; In 2024, Kwai won the sponsorship rights of the flamengo club, as soon as the news came out, Sao Paulo's other Brazilian team Palmeiras also took the initiative to come to the door, expressing their hope to cooperate with Kwai while also opening the official team account of Kwai to operate; "BIG Brother" and other mainstream media outlets. While its influence continues to expand, it also proves the correctness of Kuaishou's decision to go to sea, and it has to be said that Kuaishou has touched some veins in the Brazilian market.
02 Rooted in Brazil under the name of "Old Iron".
In a region where Portuguese is the official language and the upper economy is more solid, Kwai has successively adjusted its strategy to adapt to the Brazilian environment, in which the underlying recommendation algorithm that integrates the local culture is one of the passwords to achieve its rapid localization.
This is somewhat similar to the early days of football in Brazil, where it was largely due to its ability to cross racial and wealth divides. Brazil international Anthony wrote in his autobiography: "In the slums, everyone plays football, where everyone is equal. Today, Kwai has almost the same power in Brazil.
Vital, a 19-year-old boy born in southern Brazil, has gained more than 20,000 followers on the platform in just one month by shooting a dance video on Kwai (Kuaishou). At present, Vitor has been invited by a number of local singers to participate in the music video shoot and stage performances, and the same content he posted on Instagram has not received as much attention before. Danilo, another Kwai user, has also gained a lot of support and found a new job by posting his work on the platform, and has now moved to São Paulo from the favela of Fortaleza, a seaport in northeastern Brazil.
The first testers have already made a class breakthrough in Kwai, and there are more "vetols" on the way. According to the latest data, Kwai has more than 60 million monthly active users in Brazil, and has a high penetration rate among users over the age of 20. This is not unrelated to Kwai's deep penetration into the local market to meet the content needs of "Brazilian Old Iron".
The complexity of the history has contributed to Brazil's diverse social formations, and the famed slum of Rosinha in the Brazilian film "City of God" is just a street away from Rio de Janeiro's most prosperous business district, a gap that many of Brazil's underprivileged people cannot bridge. For example, the top rich can easily get high exposure on social platforms such as Instagram, while the bottom people are difficult to get ahead due to the lack of company support and traffic bonuses. Kuaishou's underlying recommendation algorithm has changed this phenomenon, it pays more attention to fair and inclusive traffic distribution, and users can brush more small creators. As a result, many creators living in the slums have been able to get a fair amount of attention, which in turn has increased the activity of tail creators and tighter connections between users, which has become the key to Kwai localization.
Unlike Instagram, which is filled with a lot of content from European and American cultures, Kwai is more about life in Brazil. Cheng Ji, head of Kuaishou's overseas operations, also said that in the process of development, Kwai pays more attention to the experience of Brazilian users, and focuses more on local content in Brazil. To this end, Kuaishou has specially equipped operations teams in both Brazil and Beijing to adapt to the local market.
Regardless of Brazil's political and social context, Brazil's low-level character is as unrestrained as Rio de Janeiro's palm-fringed beaches, with the unbridled hedonism of the tropics. Internet companies that rely only on "throwing money" to attract new customers will soon hit the growth ceiling, and once a company with a strong local background launches a similar product, it will be quickly surpassed by it. This is illustrated by the fact that international e-commerce platforms such as Amazon have repeatedly failed to local giant Mercadolibre. Therefore, becoming a part of the local culture and forming a new "ideological seal" is the second step in Kuaishou's roots in Brazil.
In 2024, Kwai became a sponsor of Flamengo Club, the traditional giant of Brazilian football. As soon as the news was announced, it caused heated discussions, and some fans immediately said that they would only use Kwai as a social app in the future. In addition, Kwai continues to cooperate with major events such as the Brazilian Primera A and the Copa Libertadores, focusing on the sports events that the Brazilian people pay more attention to, so that the new media form is closely integrated with the traditional popular sports. In Brazil, Kwai has gradually found its way into the upper tables. In the words of the head of Kuaishou's overseas sports sector, "a lot of opportunities are for them to come to the door themselves." In the process of Kwai localization, mutual benefit and reciprocity are the biggest advantages of Kwai gradually deepening the local influence, and some traditional advertising media even directly approached Kwai in order to bring some different impact and more content transparency to the audience, hoping to put some video content and live brand marketing materials on the platform to them.
Under the combination of underlying algorithms and cultural integration, Kuaishou has gradually copied its mature domestic technical capabilities and business logic to Brazil. According to Kuaishou's latest financial report, the cost of overseas sales and operating expenses in 2023 will decrease by 30% year-on-year, and overseas revenue will increase by more than 265% in 2023, and the number of customers will increase by 87%. It is not difficult to infer that Kuaishou is no longer a high-cost practice of "buying users", and "localization investment" has begun to bear fruit.
03 Become a sampan for the brand to go overseas
For enterprises in the Internet era, the establishment of localization advantages does not only exist in the penetration of original resources, but also the establishment of new rules of the game and the introduction of new growth models to achieve a balance on the supply side.
At this point, the skit became a sampan for Kuaishou's commercialization.
Although short dramas have begun to accelerate involution in China, they are still a novelty overseas. In Brazil, only Aiyouteng, Kwai and leading online text manufacturers are trying. However, new content forms will inevitably bring new user dividends and business opportunities. After the launch of TeleKwai, a Kuaishou short drama overseas brand, in less than 9 months, the monthly active users of Kwai short dramas reached 25 million+, and the number of views of his works exceeded 7.53 billion.
TeleKwai's success is also due in part to Kwai's long-term localization operations. Shen Junlan, the person in charge of Kwai short drama products, said that at this stage, domestic short dramas have accumulated a set of methodology, and on this basis, they will "pass on and help" the Brazilian team. "We found that their content can also run slowly, and even better than purely domestic production. After several hit short dramas in a row, Shen Junlan also said that TeleKwai gradually ran out of a Brazilian version of the methodology.
Of course, the methodology also includes the ability to help other brands achieve a breakthrough in performance. In Brazil, Porta dos fundos, a local comedy group similar to Happy Twist, released four short episodes on TeleKwai with a total of 23 million views. As the "behind-the-scenes financier" of these 4-episode short dramas, a credit card company in Brazil has also increased its Kwai account from 0 fans to 15w, achieving brand breaking and asset accumulation in Brazil.
With the commercialization logic running through, Kuaishou began to provide a new traffic dividend channel for Chinese brands to go overseas. Kuaishou's overseas commercialization team (Kwai for Business) not only provides customers with one-stop integrated marketing services, but also combines the experience of deep cultivation in Brazil to support Chinese brands in every step of the way.
In this regard, Cheng Ji, head of Kuaishou's overseas operations, said, "We hope to use Kwai's localization experience to help other domestic companies reduce the costs and obstacles of operating in Brazil, and increase their likelihood of achieving their business goals in Brazil."
This possibility has been seen in the competitive game "Metal Showdown" developed by Tencent and NextStudio. During the promotion of the game, the Kwai platform adopted the most common topic challenge marketing methods in China, and customized the #SeuEstiloMetal (# Test Your Metal Style) topic challenge based on its game style. The whole event received 1 million spontaneous participation, with more than 340 million impressions, more than 300 million total video views, and more than 82,000 video works of the challenge. On the product side, this game topped the Google Play free list in 12 Latin American countries led by Brazil at the end of 2021.
Another "Little Ant Country" published by SLG Xinghe Mutual Entertainment also did an event on Kwai, with an overall broadcast volume of more than 400 million, an increase of 40% in the overall acquisition capacity, and a 30% decrease in the cost per unit price.
According to Cheng Ji, head of Kuaishou's overseas operations, Tencent Games "PUBG" relied on Kwai live broadcast to achieve a rapid breakthrough in the early days of its launch in Brazil, and then continued to bring content output to "PUBG" in different ways in the ecology of Kwai's game creators, so as to complete the long-term demand for "PUBG's user growth".
"In the past few years, Kuaishou has become a big ship enough to sail to the sea," Du Zheng, head of commercialization of Kuaishou's international affairs, was very confident at the agent appreciation conference. Of course, Kuaishou's overseas data supports such confidence, and according to the financial report, the total overseas business revenue in the fourth quarter of 2023 reached RMB 847 million, a year-on-year increase of nearly 200%.
In fact, one of the main problems faced by Chinese enterprises that want to go overseas is localized operation under the difference in cultural environment. Kwai has created mature customized advertising products in terms of overseas marketing, which is a sampan from the same country for companies that have just set foot in a foreign country.
It can be said that Kwai's deep cultivation in Brazil has produced a certain positive interaction, in which users, KOLs, and customers take what they need, and then break the limitation of "must-buy volume when going overseas" for Chinese brands. In the voyage to the sea, Kuaishou is not only a marketing platform, but also a content platform, and also a monetization platform to achieve mutual benefit and win-win results with other brands. From a larger perspective, in today's Internet era, some successful experiences summarized through industry evolution and continuous business collision can allow more enterprises to reduce the operating costs and obstacles of going overseas, share the idea of development dividends, and continue to "expand" the cake of the overseas market.