5 Consumer Trends for Brazil in 2009
It’s the end of another year and it’s time to make some bold predictions (or guessing if you want) about how the new year will be like. The last years were a turning point for Brazil, and the middle class presented a significant increase.
There’s still a large amount of poor people and a small group of super rich people in Brazil, but the most significant purchasing power is held by the middle class.
Environmental responsibility
For those that didn’t know, Brazilian consumers aren’t specially environmental concerned in their day to day behaviour. A survey published by the Brazilian magazine Exame indicate that larger enterprises in Brazil already have started to take action, but it’s still a long way to go in order to create a environmental awareness between SME and consumers.
To expect that Brazilians will change their eating red meat habit to protect the environment is as unlikely as expecting that Americans will stop driving their cars. I believe that 2009 will be the year that Brazilian consumers will raise their environmental awareness.
Credit crunch
For those of you who are not familiar with the Brazilian retail industry, there’s one name you just have to learn: Casas Bahia. Trying to describe Casas Bahia for people that never visited their stores or watched their ads is difficult, but if you try to imagine a store that have the same quality perception as IKEA, market penetration as Starbucks and on the top of everything also act like a credit institution, you probably got an idea.
The reason why I’m talking about Casas Bahia is their position in the Brazilian credit market. Over the last years Casas Bahia have been one of the most important institutions to include the lower middle-class in the market boom for home appliances and technology. Casas Bahia have been “helping” people with salaries as low as USD 300 or USD 400 per month to buy their first TV and other home appliances. The reason they could do so is their generous credit that gave you the possibility to pay a USD 200 TV in up to 36 installments.
Due to the credit crunch, Casas Bahia typically offer only 3 instalments now, something that totally change the game for the lower middle-class. This trend will definitely continue into 2009.
3G
Brazil is unfortunate enough to have many different ADSL monopole. It’s rare to see that a monopole is an optimal solution for customers needs and even though there are other alternative for broadband access trough cable TV it will normally follow the same standards as the monopole holder.
With a higher market penetration of laptops and more accessible connections, 3G will explode in the market in 2009. Brazilian are quickly adopting new technologies as long as the price is affordable, and 3G is affordable for the middle-class of consumers now. I believe that 3G will be the must have service in 2009.
Travelling
As we mentioned before in The Brazil Business, there’s a battle going on to win the Brazilian skies. Currently we can see one-way plane fares between São Paulo and Rio de Janeiro as low as USD 35.
Somebody have to lose money, on this battle and most likely one or two of the major airlines have to give up or merge during 2009, but as long as the battle is going on, Brazilians can travel all around the country for affordable rates. I believe that Brazilians will be travelling more in 2009.
Apple
Last but not least. I remember those days when an iPod cost an arm and a leg. Actually, if you wanted a Macbook it would be cheaper to buy the plane ticket to USA and buy the Macbook there then to buy it in Brazil. Well, those days were actually just a year ago. I usually just described it as the Brazilian Apple Mafia.
Earlier this year, the Brazilian electronics chain Fast Shop announced that they would open dedicated Apple stores named A2You and enter the Apple Premium Reseller program. For just some months ago I had my first experience with A2You. It dramatically changed my impression of the “Brazilian Apple Mafia”. A2You was staffed with competent people who wanted to help you, not only suck as much money as possible out of your wallet, and to my surprise the prices were on European level !
I’m not saying that Apple products are cheap in Brazilian standards, but they are available, and to a pricing that make them a serious option for those that are searching for high-end electronic gadgets.
I believe that 2009 will be the year that Brazilian consumers will catch-up with the rest of the world when it comes to adopting Apple technology.