Hi, everyone, welcome to Brazil, the country of the future.
“The Brazil Opportunity: A Guide for Marketers” is the result of quantitative, qualitative and desk research conducted by *JWTIntelligence throughout the year. A wide-ranging introduction to a complex culture, consumer mindset and media landscape: a look at the forces that have shaped Brazilian society and how it’s evolving in tandem with massive political, economic and social shifts.
In the decade since the BRIC moniker was coined, Brazil has emerged as an economic giant and a robust new market for brands. The middle class has mushroomed , fueling a consumption boom. From just 38 percent of the population in 2003 to 54 percent today and, enabled by easy access to credit, now represents a rich consumer base.
Close to 200 million people across 3.3 million square miles - a landmass bigger than India or the contiguous United States - generating almost $2.4 trillion in GDP. $1.6 TRILLION forecast annual spending power of Brazilian households by 2020. Exuberant consumers!
According to a January report by PwC, Brazil has seen an influx of foreign brands since the economy stabilized in the mid-’90s and then boomed over the last decade. Brands will find a relatively uncluttered market and a nation of young spenders who are hungry to try new things and optimistic about their financial future.
Meanwhile, rich natural resources - including oil, iron and fertile land - and long-term government initiatives look likely to sustain momentum for years to come. Average real wages are expected to grow through 2016, supporting income gains, according to The Economist Intelligence Unit. Recent programs like 2011’s Brasil Maior (Bigger Brazil) aim to increase competitiveness, productivity and innovation. Plus, the FIFA World Cup in 2014 and the Summer Olympic Games in 2016 promise to put a global spotlight on Brazil and drive spending.
For North American and European firms, Brazil also presents lower barriers to entry than its BRIC peers, given the degree of cultural overlap, including a Latin-based language, a Judeo-Christian faith, a European history and a robust democracy (based on the American system). Shared roots and cultural values, according to The Economist Intelligence Unit, also mean Brazilians are more amenable to working with Western multinationals. Six in 10 international business leaders polled by Ernst & Young in 2012 were considering setting up operations in Brazil this year, and more than 8 in 10 believed Brazil will only get more attractive over the next three years (by comparison, fewer than 4 in 10 believed this about Europe). Source: GfK Roper, March 2013 and Boston Consulting Group.
Here’s the reality:
• Brazil has the sixth largest economy by nominal GDP in the world, and seventh largest by purchasing power parity. Read more at: http://en.wikipedia.org/wiki/Economy_of_Brazil
• Per capita income of families jumped by 32% between 2001 and 2011, and the ranks of the middle and upper classes are forecast to keep expanding over the next decade . In July, retail sales grew 6% year-over-year, almost double the median forecast. Sales of luxury goods are expected to grow at least 12% this year, per the Financial Times.
• Inflation over the next few years is expected to remain relatively low, and below levels projected for Russia and India. Economic evolution Brazil’s burgeoning upper and middle class Upper class Middle class Lower class.
• Unemployment has fallen significantly, dropping from more than 12% in 2003 to less than 6% in July 2013.
• Education is improving. 70% of middle-class children have had more education than their parents. University enrollment is higher than in China and India.
• The Brazilian government has undertaken an ambitious program to reduce dependence on imported petroleum. Imports previously accounted for more than 70% of the country's oil needs but Brazil became self-sufficient in oil in 2006-2007. 2014 Brazil will begin producing as much oil. "Pre-Salt" a term that hardly anyone outside oil industry would have ever heard. Located in the Brazilian continental shelf, can mean reserves of over 50 billion barrels of oil, a volume four times greater than the current national reserves, roughly 14 billion barrels. But those two incongruous, single-syllable words hold the key to Brazil's hopes of becoming a major oil producer, securing billions of dollars in revenue. Read more at: http://en.wikipedia.org/wiki/Pre-salt_layer
• Brazil is considered to have the world's first sustainable biofuels economy and the biofuel industry leader. Read more at: http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil
• Brazil is one of the world's leading producers of hydroelectric power, with a current capacity of about 260,000 megawatts. Brazil's first commercial nuclear reactor, Angra I, located near Rio de Janeiro, has been in operation for more than 10 years. Angra II was completed in 2002 and is in operation too. An Angra III has its planned inauguration scheduled for 2014. The three reactors would have combined capacity of 9,000 megawatts when completed. The government also plans to build 19 more nuclear plants by the year 2020.
• The population is highly urban and becoming more so, with 87% in urban areas.
• Brazilian culture is characterized by both a robust national pride and a longstanding inferiority complex, a vibrant optimism and a strain of bittersweet nostalgia. Family and community are of prime importance in this collectivist culture, with football - almost a national religion - not far behind. Stratification is ingrained, but that’s changing as culture starts to trickle both down and up. Marketers will also need to understand regional differences - and bairrismo, or local pride - in a country that’s bigger than the continental U.S.
• Consumers are young, notably younger than consumers in developed markets like the U.S. (37.2) and the U.K. (40.3). Consumers are classed into five segments. Most of the class C, is gaining spending power for the first time and embracing the opportunities that provides. Across classes, consumers are driven by a desire to demonstrate status. Ebullient and emotional, Brazilians are spenders. For instance, Brazilian women spend as much on beauty products as British women, and by 2016, Brazil is expected to overtake Japan as the No. 2 market for cosmetics and fragrances, behind the U.S. Yet there is scope for the social and economic advances of the past two decades to continue.
• Television dominates the media landscape, but consumers are also increasingly digital, embracing mobile (Brazil is ranked fourth in mobile connections globally) and social networking. Brazil is home to one of the world’s biggest media networks, a fragmented radio and newspaper market, and a fast-changing pay TV market.
• There has been enormous progress in decreasing the deforestation of the rain forest and other sensitive biomes, but the country faces important development challenges in combining the benefits of agricultural growth, environmental protection and the sustainable development.
• As one of the leading nations on climate negotiations, Brazil has committed voluntarily to reducing its greenhouse gas emissions by between 36.1% and 38.9% until 2020.
Brazil has huge natural resources, and therefore we might expect its economy to be one of the biggest.
Bring your business to Brazil!
*JWTIntelligence is a center for provocative thinking that focuses on identifying shifts in the global zeitgeist. Its aim is to bring the outside in—to help inspire ideas beyond brand, category and consumer conventions—and to identify emerging opportunities so they can be leveraged for business gain. As a part of JWT, the world’s best-known marketing communications brand, JWTIntelligence has conducted trends research and analysis across categories and geographies for nearly a decade. For more information, please visit www.jwtintelligence.com#Brasil #Brazil #analysis #global #economics #business #strategy #marketer #brands #consumers #RBVconsultoria