BRAZIL'S COMPETITIVE DYNAMICS -MARKET PLACE

1. BRAZIL 2014 - LUXURY MARKET INTELLIGENCE REPORT
Tuesday, May 6, 14

2. According to the FMI’s forecast, Brazil
will become the fifth largest economy in the world.
3rd
7th
5th
3rd
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3. Largest fleet of
helicopters
Largest fleet of
private jets
Largest consumer
of Yachts
city of São PauloLargest seller of
Ferraris
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4. “Multinational companies continue to regard China as a top
investment priority and Brazil as the second”
*Survey conducted by PricewaterhouseCoopers with 227 chief executive officers from a cross-section if multinational companies.
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5. 4,618 millionaires with total assets of US$ 865 (1,880 individuals with net
assets of $30 million or more)
One person in Brazil will become a millionaire every 27 minutes in 2013
78% of millionaires live in São Paulo and Rio de Janeiro
Source: Wealth Report 2013 published by Wealth-X
The penetration of luxury products and services in Brazil is oriented
towards a 10% of the population, this is in line with estimates by FGV, a
Brazilian research institute, which sized the A/B population at 20 million in
2010, with total income of $ 817billion (36% of country total).
São Paulo has 21 billionaires
with US$ 85 billions
Rio de Janeiro 3
Source: Forbes Mag
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6. The impact over final demand R$ 29,6 billion.
Brazil’s economy pushing events
According to The Economist, in recent years…
“Brazil has been transformed from 'country of tomorrow'
to ’once-in-a-lifetime opportunity.’”
Source: Ernst & Young Terco – Passport to Brazil
More than one million visitors are expected
to travel to Rio and São Paulo for each event.
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8. The Brazilian luxury market is a brand new market - started in
mid-90s.
Before that Brazil received little attention from the international
luxury goods industry, which was content to serve the market through
other channels, primarily via licensing with local production
For years, Brazilians had access to luxury goods through friends, who
imported luxury products in their suitcases from their trips abroad.
This is how the São Paulo-based luxury emporium Daslu was
founded, before growing into a increasing superrich elite in 90’s.
Since the opening of the market , Brazil has had a long history of
success when it comes to international brands in almost all segments
of the economy.
International major players are:
Tiffany’s, Louis Vuitton Group, Gucci, Giorgio Armani, Zegna, Dior,
Cartier, Ralph Lauren, Salvatore Ferragamo, Dolce&Gabbana, Tommy
Hilfiger, Marc Jacobs, Lacoste, Emporio Armani, Hugo Boss,
Montblanc, Mercedez Benz, BMW, Ferrari, Burberry, Rolex.
Ralph Lauren licensing operation closet in 2003.
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9. During the recent global economic crisis, many international luxury brands diverted an
important part of their investments to the most important emerging markets, with a special
focus in the so-called BRIC countries. As a result of that, Brazil has experienced a remarkable
growth in the number of new international luxury brands with local operations, as well as the
presence of existing ones, mostly through the opening of new stores.
The most significant growth of the luxury market was due to the huge investments in
new shopping malls in São Paulo City, these investments focused on luxury and high end
markets like Shopping Cidade Jardim (2008), JK Iguatemi (2012) and the existing Iguatemi
Mall.
International luxury brands like Chanel, Gucci, Prada, Hermes, Bottega Veneta, Miu Miu, and
Tory Burch entered the Brazilian market with direct investment. There have been another 90
new retail openings since 2008.
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10. São Paulo
São Paulo
N
Shop. Cidade
Jardim
Shop.
Iguatemi
Oscar Freire
e região
Av.
Europa(2)
Shop. JK
Iguatemi(3)
Luxury brands yet do not extend their business beyond three main cities:
São Paulo, Rio de Janeiro and Brasilia.
Store Openings
38 Flagship stores opened in São Paulo
in the last two years.
127 International Brands entered Brazil
in the last tree years.
R$ 2 billion in investments for the opening
of new stores in 2012.
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11. A staggering 35 % of Brazil’s GDP is comprised of taxes, higher than United States (24,8%) and Argentina (29%).
Lower than France (43,1%) and (36,0%) England
Government bureaucracy an complex system of taxation will require local expertise
Limited retail infrastructure as Brazil has very few high-end department/multibrand stores. The majority of high-end
brands sell through mall-based mono-brand stores and e-commerce.
A very complex taxation system in addition to being a highly bureaucratic country and complex
demand makes local expertise mandatory for a successfully managed operation.
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13. access emergent absolute next gen
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14. 1. are very brand conscious, well informed and traveled.
2. are very familiar with international luxury
brands and they care about quality and exclusivity
3. are influenced by European culture and style,
and by the American casual fashion style and consumption standards.
Despite Brazilians love of the casual fashion style, they like to dress
up.
“Wealthy woman in Brazil is completely fashion oriented, follow
American Vogue and knows everything about fashion”.
enjoy authenticity and is opened to new consumer experiences
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15. Brazil has always had it’s selected group
of “nouveau riche”. This group of people is
distinguished by their extravagant tastes and for their
tendency to emphasize their social condition.
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16. A1 42 - 46 20.977,60 10,488.00
A2 35 - 41 12.708,94 6,354.00
B1 29 - 34 7.437,62 3,718.00
B2 23 - 28 3.729,16 1,859.00
Source: IPC MAPS 2013
Brazilian median household income in R$ Reais and US$ Dolar rate US$ 1.00 R$ 2,00
R$ US$
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17. Credit facilities - in Brazil you can buy
everything by payment plan, even luxury goods
[70% of purchases in the luxury sector are divided
into installment payments on credit card or checks]
Customer’s recognition of the superiority of imported products.
Regional Customization
Tuesday, May 6, 14

18. When it comes to purchasing expensive items,
consumers service is the key influential factor:
Personal Shoppers...
Personalized Products...
Private Sales, Events for Special Clients...
Brazilian clients tend to develop a long term
relationships with their favorite sales person
Customer service is also a magnet for shopping
Brazilians do shop abroad, usually on vacation or shopping trips
MIAMI and NEW YORK being the two most frequented cities
Regional Customization
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20. BRAZIL 2014 - LUXURY MARKET INTELLIGENCE REPORT
luz@luxurylab.com.br www.luxurylab.com.br
Tuesday, May 6, 14