This article will give you a profile of this new Brazilian middle class, mapping their consuming habits and the measures entrepreneurs and the government have adopted to meet their needs.
Brazil has been experiencing a social climbing that has changed the concept of middle class in the country. The majority of the Brazilian population belongs to classes C (46% of the families) and D/E (39%) and as loans and credit have provided these classes with a more significant purchasing power, entrepreneurs have started to invest in this portion of the population.
Such investments have started to be reflected in the outskirts of the cities. A shantytown like Rocinha, for example, has an average of 70 internet cafes, a cable television antenna, two radio stations, three banks and about 6000 establishments. Such investment from private companies pushes the government to invest as well, and now most homes in Rocinha have access to basic services, such as piped water and electricity.
A Profile of Classes D and E
Differently from what one may think, people from classes D and E do not wish to save their money buying cheaper products and services. They want to buy the most sophisticated product their money can afford.
In this sense, it is common to see a two-room house with a huge plasma TV, or to see people who earn a minimum salary displaying expensive mobile phones. Also, classes C and D are the ones that most consume electronics.
Many of these people earn a minimum salary and usually work in the services industry, performing jobs such as drivers, housekeepers, bricklayers and so forth.
Facing the circumstances, many of the teenagers end up dropping out high school in order to get a job and complement the family income, what results on a socioeconomic stagnation from which they rarely leave.
As an attempt to ease these problems and provide new opportunities for these people, the government has invested in social programs and the positive result has encouraged entrepreneurs to invest in social classes that used to live in the margin of the consuming society.
Many people in classes D and E participate in at least one of the many social programs offered by the government. Some of these programs have the purpose of easing basic problems such as hunger and other social adversities faced by those who live in poverty.
As lack of education has been the main obstacle for those who want to leave classes D and E, several educational programs were created. Most of them have encouraged parents to keep their kids at school and promoted access to higher education through the offer of scholarship for poor students. Such measures by themselves may not promote immediate social mobility, but it does increase the chances of those who are benefited by the programs.
Another measure is the democratization of access to technology through programs such as Baixada Digital and Piraí Digital, that provides free wi-fi for poor areas of Rio de Janeiro.
Companies have started to migrate their business to the outskirts of the cities, which is where classes D and E are located.
Shopping malls, that used to be a privilege of downtowns, have managed themselves to be present in outskirts of the cities. The same happened to banks, fast food chains, clothing stores, etc.
Nine out of 10 brands, including McDonald's has started to focus on the consuming habits of this part of the population. A successful enterprise is the one of an entrepreneur who opened a travel agency specialized in selling airline tickets for those who live in the outskirts of Brazilian cities.
Adopting a prepaying policy and with the advent of popular advertisements, the enterprise has billed annual 8 million BRL.
This article was written through the contribution of Zezinho da Rocinha. For more information about his work in Rocinha, visit his website.