According to the IDC, IT retail investments accounted for about 5% of total IT expenditures in Brazil in 2013 (US$ 3 billion on a total of US$ 59 billion). Of the total invested, most is concentrated in the hardware segment, given that the country is still in the process of developing its IT infrastructure, a phenomenon also observed in other emerging countries.
Therefore, the current dynamics of the retail sector in Brazil indicates that the percentage mentioned above will only increase in coming years. Indeed, the combination of the expansion of new retail stores, opening new franchises throughout the country (a result of the phenomenon of intense formalization currently observed in the industry) construction of new shopping malls and increased consumption in general (due to the growth of the Brazilian middle class) all these factors together suggest that the retail IT industry should expand considerably in the near future.
In this regard, being directly linked to the retail IT industry in the country and the software market in retail management (our market segment), will position us to benefit directly from this growth. In fact, the prospects are very favorable for our market segment in the country. With penetration still low in Brazil—according to the IDC, it is estimated that the market for retail management software has totaled R$1,171 billion in 2016 in a market with a potential of R$9.0 billion per year (13.0% penetration)—the sector may grow at an average annual rate of 12.1% between 2014 to 2019.