BRAZILIAN MARKET 2013
The recent visibility of Brazil’s economy has made major international luxury brands interested in our market. Brazil has a long history of success for international brands in almost all segments of the economy, since the opening of the market in the 1990’s.
This new marketing phenomenon has developed in the consumer a new desire for quality, which is constantly raising their demand for luxury and premium products and services. This new perspective is a factor, that threatens businesses and brands established here in Brazil, and pushes them to continuously improve their products or services to counteract such forces and meet this new demand.
In terms of the Americas, Brazil is second only to the United States. And as the country invests heavily in hosting both the World Cup in 2014 and the Olympic Games in 2016, one can only imagine how the luxury market will grow.
Brasil has doubling its growth rates between 2008 and 2012, Brazil is quickly establishing a reputation as the most important luxury market in Latin America. In 2011, the market for designer clothing and footwear grew 7.3% to $2.6bn, while sales of luxury accessories increased 4.5% to $1.2bn (Just-Style).
We have already witnessed an expressive increase in the establishment and improvement of local retailing, hotel management, airlines, private banks, jewellery, cosmetics, gastronomy, well-being, navigation, education, not to mention luxury tourism.
But Brazil is already becoming known for it’s barriers to entry. Among the difficulties encountered by foreign investors, high taxes, red tape and lack of infrastructure continue to prevent successful market entry.
Further obstacles limit the growth of this market, such as social inequality and the concentration of the luxury market in the city of São Paulo. São Paulo is the leading city in Brazilian luxury consumption, accounting for 67% of the market.
Rio de Janeiro is second, and though accounting for less than half of this percentage, has shown good growth with excellent opportunities for the next few years. In third place is Brasilia, with an older mentality towards the luxury market, still tending to value ostentation over the personality of a product.
Growth rates in Brazil are still below those of other BRIC countries, especially when compared to China. But where Brazil may hold future advantage, is in the quality and sustainability of this growth. Particularly if Chinese labor laws were to suddenly significantly change.
Where Brazil has disadvantages against these countries is a poor educational system and low savings rates. But there are some fiscal and politcal advantages that Brazil commands when compared to the other BRIC countries. In China, India and in Russia, the percentage of realty mortgage debts mount to 12% against 3% for Brazil. In European countries, this average reaches 64%.
Brazil also has a reasonably stable political climate at the hands of its democratic government. There are no armed militant revolts, nor religious or ethnic conflicts. Brazil imports more petrol than weapons and has positive relationships with its foreign investors.
The Brazilian luxury market shows notable signs of solidity and not only is there the presence of reputable foreign companies (which have a strong influence over this market in Brazil, veritable by the size of their participation), but also of national enterprises, still at an embryonary stage, having expanded to the international luxury markets and accomplishing renown.
This is the case of H. Stern, Fasano, Embraer, Carlos Miele, among others. Their success sets an example for other Brazilian luxury brands which may wish to venture on the road to success in the Luxury Universe.
Luz Vaalor Letter:
When I created the Valor Luxury Lab, the objective was to share my knowledge and my professional, intellectual and emotional experiences while working in the international luxury brand market, with such brands as Polo Ralph Lauren, Calvin Klein and Yves Saint Laurent. At the same time, I sought to create an appropriate environment to the study of the Contemporary Luxury Market in Brazil, whose literature on the subject was quite limited.
In the last two years I have studied and compiled a wealth of knowledge on the upscale market in Brazil. Now is the ideal time transform this content and information into a book on Luxury Business, which brings together the experiences, concepts and the main market practices of this segment. This book which is due to be launched in 2010, will be called “Cultura do Luxo Contemporâneo”.
But, what’s Luxury?
Is it the possession of a property restricted to a few privileged ? Is it a superlative experience, an object of inestimable value or the latest model of something very exclusive? All the above statements and many others. The contemporary luxury, but is no longer restricted to one social class is no longer inaccessible, no longer superfluous, and may not require or involve large expenses necessarily ostentatious. Of all the settings just the pleasure remains.
Undeniably, luxury is a moment of pleasure. And with pleasure, luxury is personal and not transferable. The new contemporary desires transformed the consumption of luxury goods in feelings that can no longer be affixed and responding to individual and personal desires. In contemporary luxury, ostentation gives way to pleasure and refinement and luxury of excess turns into vulgarity.
Luxury today is the power to fulfill his wishes. Whatever they are!
The contemporary luxury is being seen as a sign of development, personal development and personal choice. Thus, increased association of luxury with more human awareness, linked to ethics, ecology, welfare and culture.
The luxury market in Brazil has shown a continuous and consistent growth, reflecting the maturation process of this segment, reflecting the need for companies to improve their competitiveness and develop actions geared towards an improvement in customer relations. In recent years, the Luxury issue has gained some national interest. Everyone is interested in the new concepts of the Luxury Market, as well as the competitive advantages that this market can add to their own businesses and careers.
“The contemporary luxury is a global philosophy, shared of the insatiable quest for the unusual, unique or special, fuel for pleasure and experiences”
Luz Vaalor 2009
About Luz Vaalor, president and founder of Valor Luxury Management Consultancy and Valor Luxury Lab Blog
Executive Chairman and founder of Valor Luxury Management, has more than twenty years of experience in managing operations of luxury and premium brands, developing business, marketing, sales and communication.
She was director of Polo Ralph Lauren operation in Brazil and marketing manager of brands such as Calvin Klein and Yves Saint Laurent. Her proven experience in the market and its high value offer her clients a great advantage when they plan to increase the desire and value for their brands.
Luz is a consultant and speaker on the market for contemporary luxury and speaks of the importance of applying extra services for companies that want to acquire the premium clients. Her book on the subject is already in the final stages of completion and should be released in 2010.
“Luxury is the essential and not the excessive”.
Luz Vaalor 2009
WEBSITE PROFILE www.luxurylab.com.br
Brazil 2013 – Luxury Market Intelligence Report