Brazil’s Rising Economy and Industries

Brazil’s economy was a ‘superstar’ economy during the global recession of 2009.  How is Brazil faring now?  Business leaders are examining the picture of one of Latin America’s fastest growing economies, facing an estimated 7% growth in GDP in 2010.

The retail market is rapidly growing. Highly fragmented, the industry is primary dominated by three actors: Pão de Açúcar, Carrefour and Wal-Mart.  Smaller local chains control small shares of industry activity, intensifying competition and impacting customer loyalty for larger chains.  Industry consolidation may emerge as a way to boost profitability, enhance market presence and reduce competitive threats.

Economic growth and development have lead to the emergence of a rising middle class, with increased disposable income.  Food consumption represents the majority of retail sales in Brazil.  The question of whether conspicuous consumption will become a greater trend in this emerging market (as it has in Asian emerging markets) has interested many luxury retailers.  Foreign luxury cars, designer clothes, and other luxury products are flooding prosperous Brazilian cities.  Credit and financial planning providers are rushing to meet the needs of these consumers.

To reach out to the rising consumer class, marketers have focused on loyalty, lifestyle marketing and awareness promotion to tap into Brazilian consumers’ disposable income.  According to several sources, Brazil has the highest percentage of internet users regularly using social networks.  New technologies such as Social Media are beginning to be used by large companies to communicate their promotions to consumers and to respond to customer opinion.