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Facebook taps the poor of Brazil

News, 23 March 2015

SÃO PAULO: As Facebook sees its home market levelling off, the US social media giant has begun to look overseas for growth and sees great potential in Brazil, even in the slums of São Paulo.

It launched a new initiative last week in the Heliopolis favela where an innovation lab will offer technological advice and support for small businesses and entrepreneurs.

As reported by the Wall Street Journal, the aim is to tap into a wellspring of entrepreneurship that is thriving in some of Brazil's poorest communities.

But it will also assist in spreading Facebook's reach in a nation whose citizens are recognised as being very tech-savvy and, in time, these small enterprises could turn into paying advertisers.

Facebook would benefit from the advertising generated by the programme while small businesses improve their knowledge and digital skills.

Patrick Hruby, director of Facebook's SME business division in Latin America, said small enterprises in Brazil are more likely to use Facebook's messaging function for transactions online than elsewhere in the world.

They are using these social media tools because they lack access to other technology and infrastructure, he explained.

A full 90% of residents in Heliopolis use Facebook, but only about 14% of small businesses there have a page on the social network. Hruby said he wants to increase that percentage and turn more entrepreneurs into paying advertisers.

One could be 26-year-old photographer Victor Hugo, who said he used to make about $1,600 a month marketing his services in local newspapers, but who now earns $4,000 a month since creating a Facebook page to promote his business.

If Facebook's lab in Heliopolis is successful, the company says it may expand the programme to similar communities in Brazil and other countries. There is certainly room to expand.

More than 11.4 million people live in favelas in Brazil and, according to the United Nations, there are an estimated 110.7 million people living in slums throughout Latin American and the Caribbean.

Data sourced from Wall Street Journal; additional content by Warc staff