Brazil is growing. South America’s largest country isn’t just modernizing and becoming wealthier, it’s modernizing and becoming wealthier quickly. And this transformation isn’t just happening in the booming capital city of São Paulo but in a handful of smaller to medium-sized cities as well. At present, 70 percent of Brazil’s domestic luxury consumption takes place within São Paulo, but according to McKinsey, by 2025, 34 Brazilian cities will share that wealth, literally. One of the drivers behind Brazil’s ascent in the emerging market race is its population. From 2007 to 2017, Brazilian wealth is set to more than double. And today, with more than 150,000 millionaires and a median age of 29 (compare this with China’s median age of 36), Brazilians are rich, young and increasingly digitally native.
With a quarter of the population conversant in English and nearly 40 percent of the country already surfing the internet — 85 percent of whom regularly access social media platforms — Brazil is one of the most promising untapped markets for brand penetration, particularly among the retail and luxury sectors. Plus, Brazilians’ interest in owning luxury is well-established. All the Gucci, Prada and Rolex you see on the backs, feet and wrists of young Brazilians, however, most likely wasn’t purchased domestically. In fact, 80 percent of luxury items owned by Brazilians are “tourist purchases,” brought back from trips to London, Paris, and Milan. Brazilians even outpace the notoriously spendy Chinese when they visit the U.S. cities, dropping on average $4,940 per stateside trip.
While many prestige brands have made clear that China is a country worth investing in, far fewer have acted on Brazil’s potential: just 22 percent currently offer sites translated into Portuguese, and even fewer (21 percent) have localized Facebook pages targeting the Brazilian market. There are some, though, like L’Occitane, Sephora and Avon, all of which earned “genius” rankings for Brazil in our recent ‘Digital IQ Index: Brazil Russia India‘ report for strong localized social presence, outstanding fan engagement, and reliable, fully functional e-commerce. In just four years, Brazil’s online retail revenue is set to increase by 2.5x to $36 billion. At this same time, Brazil’s share of the global luxury market is also growing apace, from just 1.5 percent in 2008 to 6.4 percent by 2025.
In Brazil, the money is there, the interest is there, the consumer savviness to buy it online, also there. All that’s missing is the brands’ attention.