Wednesday, June 1, 2016

Brazil economy contracts for fifth quarter; Uber raises $3.5bn from Saudi fund; Slow website as new business threat

1 Brazil economy contracts for fifth quarter (BBC) Brazil's economy continued to shrink in the first quarter of 2016, contracting by 0.3%. It was the fifth consecutive quarter in which the economy has shrunk. However, the figure was not as bad as the 0.8% contraction that had been predicted by economists.

As well as its worst recession in decades, Brazil is grappling with political crisis, following the removal from office of President Dilma Rousseff pending an impeachment trial. The Instituto Brasileiro de Geografia e Estatistica (IBGE) also said that Brazil's GDP fell by 5.4% year-on-year.

Earlier, the Organisation for Economic Cooperation and Development (OECD) cut its economic growth forecast for Brazil, citing political and corruption concerns. The Brazilian economy is now expected to contract by 4.3% this year, the OECD said. Production fell in all the three main economic sectors: agriculture, industry and services.

Neil Shearing, chief emerging markets economist at Capital Economics, said the smaller than expected contraction was only due to a rise in government spending. Brazil's interim president, Michel Temer, said that his government would not cut spending on health and education, but warned that sacrifices were needed to balance the books and restore the economy to growth. The country has a huge budget deficit and 11 million unemployed.

2 Uber raises $3.5bn from Saudi fund (San Francisco Chronicle) Uber has said it is getting a massive cash infusion from Saudi Arabia. The oil-rich nation's sovereign investment fund is putting $3.5 billion into the global transportation company, and will get a seat on Uber's board of directors.

Funding for new tech companies has been slowing down in recent months amid concerns that many startups have been over-valued. But San Francisco-based Uber has been able to raise billions of dollars as it pursues ambitious plans to expand around the world.

Uber says its internet-based ride-hailing service now operates in nine countries of the Middle East, one of its fastest-growing markets. Eighty percent of its passengers in Saudi Arabia are women. The country doesn't allow women to drive.

The Saudi money is part of a larger round of funding by several investors, which valued Uber at $62.5 billion. The company, which has raised well over $14 billion since its founding in 2009, says it now has more than $11 billion in cash and available credit to fund its expansion.

Uber's regional rivals have also reported big investments this year, as on-demand ride services have grown in popularity. Apple recently invested $1 billion in China's Didi Chuxing, while General Motors has put $500 million into US-based Lyft.

3 Slow website as the new business threat (Rabiya Shabeeh in Khaleej Times) Recent studies show that the greatest competition for most companies today isn't other businesses, but the back button that takes customers away from their Websites to other businesses. "You're probably losing more sales to customers leaving your Website because it took too long to load than you are to competitors," researchers state.

A recent study by shows that slow loading time is no longer just an inconvenience, it's very bad for business. For every $1,000 an e-commerce site makes, a one second delay could cost it $25,000 per year. To put it into perspective, if Amazon slowed down by just three seconds, it would lose $1.6 billion worth of potential sales that year.

In addition, 40 per cent of people will abandon a Website if it takes longer than three seconds to load. And nearly 90 per cent of them are less likely to return to the site after a bad experience while one of them will also tell others about it. Imperva Incapsula's study on adults who self-reported their online shopping frequency to be slightly often or more concludes that only 38 per cent customers are willing to wait for more than five seconds for an e-commerce Website to load.

And it is not just a company's sales team and customers who are impacted by the speed of its Website, search engines expect it to be pretty fast too. Google, for example, claims to be on a mission to 'make the whole Web faster' and ultimately recognises and promotes the best Websites across all categories with speed being a defining component in its search ranking formula.

A Website that is functional, effective, and convenient is no longer just a competitive advantage but an absolute requirement to every type of business, be it small, big, new, old, or blue chip. Your Website is your face value. Successful businesses invest well in Website speed along with every other functionalities because they understand the benefits it reaps nearly right away.

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