MCF Consultoria, in partnership with GfK group, announces the 6th edition of “The Luxury Market in Brazil” Research, a study that aims to measure the dimension of the Luxury market in Brazil, besides showing the outlook for the next years. The research also shows up as a fundamental analysis tool for companies, since it brings market trends, areas of expansion, e-commerce data, expectations of leaders, besides addressing the workforce situation for the segment.
According to the research, the Luxury sector growth in Brazil in 2011 was of 18%, closing the year with total revenues projected of R$ 18.54 billion. For 2012 it is expected to increase by 8% (R$ 20.1 billion). This reduction movement of the growth rate is credited to the national economy, which has a projected growth for 2012 of just 1.6%. In 2011, 64% of brands said their revenues were as it was projected or higher than predicted.
For 2012 it is estimated a 12% increase in new sales points for companies that already have up to 10 units. But the big news in this segment is that 22% of retail companies work with e-commerce, even in a market that emphasizes exclusive and personalized service. And this percentage has been increasing over the past three years.
The study also shows that the Brazilian Luxury market predicts about 2 billion reais in investments for the opening of new stores in 2012. This shows that the market is expanding and more and more brands are investing in this type of audience in the country. From 2011 to 2012, Rio de Janeiro had the highest growth, rising from a level of 30% to 62% in being an investment destination of operations. But São Paulo, even with a 5% decrease, is still the leader as the expansion focus, with 65% of priority. As a result of the already identified Luxury market decentralization in Brazil. In the last two years there has been a significant growth of Belo Horizonte and Curitiba also, the latter with growth from 13% to 27%. Brasília, tied with BH with 23%, is the most promising city in Brazil, excluding São Paulo and Rio. The interest in Brasilia is very high considering that the city has the highest per capita GDP in the country for being the national political center, and has high consumption power – in 2010 there was a market boom in the region with the arrival of Iguatemi mall.
According to the survey, there is a Luxury democratization trend, which had already been detected in recent years. One of the signs is the creation of sub-brands to reach potential customers with more affordable product lines. The brands want to maintain exclusivity, but allowing a new range of more accessible products for this new consumer.
Note also a growing promotion of the Luxury market via social media. The research says that Brazilian Luxury companies make more use of advertising through the social networks than foreign companies (90% versus 70%). The wider spread is via Facebook (98%), followed by Twitter (64%). Most customers who consume Luxury are in the 25-45 age group (57%). We notice that the customer has been educated to consume Luxury in a more advanced status. But it is wrong to assume that women consume more: the division is almost symmetric (52% men versus 48% women). Of this public, 77% are attracted by the glamor, tradition and the brand exclusivity, according to the companies. In 2010, the situation was reversed. It is also noted that the promoting events is the most used by companies for customer relationship actions (80%).
It is noteworthy that 68% of the Luxury brands surveyed report that they must invest heavily in the workforce in Brazil, and none of the responding companies reported being fully satisfied with the Brazilian workforce available. It was one of the most striking points of this survey. For 66% of the companies the main obstacle in Brazil is the issue of high taxation. Even with the perceived high tax rate, the country raises interest of large global companies, even though 44.7% of Brazilians are buying Luxury goods abroad, a rate that is directly related to the dollar exchange rate.
You might also like
More from ANALYSIS
How to deal with the big yet complicate business of fragrances: let’s think outside the bottle! Ask any woman about fragrances …
Luxury fashion embraces pop-up Onomatopoeic miracle. Together with ROARR!, GRUNT!, SLURP!, without doubts also POP UP has for all of us …