Domination of the Western countries is now being challenged by the developing economies. Underpinned by its economic growth, Brazil is claiming its place inthe global radar with its luxury market showing high growth trajectory.

Brazil is getting through a dramatic upswing from its current status. Luxury market for 2012 is estimated to grow and reach $3billion. Investment in the luxury sector of Brazil will go up to 25%. A 2011report by Knight Frank states that countries such as Brazil, India and China includes more HNIs comparatively over countries such as Saudi Arabia, France,and Italy. Sao Paulo, a city in Brazil is predicted to become the 12thleading city of the world in the next ten years.

A.T.Kearney ranks Brazil as an attractive target expansion market. The country exhibits a GDP growth of 5% year-on-year. With large urban population, and surging retail sales, the country has boosted the growth of its luxury segment.



Growth Drivers:


Brazil is considered as the only Latin American country which has a larger distribution in multiple cities. Large number of urban population, surging retail sales, Government's substantial investment in infrastructure, and inflow of foreign capital are fuelling the growth of the industry. Positive macro economic conditions of the country make it an attractive destination in the eyes of global retailers. Huge mass of population has joined the upper-middle, and upper classes. During the recent years, there had been a significant migration into the urban areas.


Shopping the Brazilian psychology:


Brazilians are fond of shopping. Market for Brazilian apparels is dominated mainly by the domestic players giving little space for the entry of multinationals. Only a handful of retailers such as Mango, Zara, mom-and-pop, C&A, and Miss Sixty have established themselves successfully. Shopping attitudes of Brazilians are strongly dominated by their preference towards fashion; influenced by the local celebrities. A survey on Brazilian shoppers discloses that approximately 80% of them shop frequently. Their focus of purchase is mainly casual wear for family outings. Mainstream Brazilian consumers prefer local brands over foreign ones. They also agree with the fact of buying clothes on credit. Brazilians have a different mindset when compared with Asia, and Middle East. Though brands have their own reputation among Brazilians, expensive products are difficult to sell.


Noteworthy brands in the market:


American brands such as Ralph Lauren, and Calvin Klein are finding the market with good potential. The country is filled with fashionistas not faltering in their skills for designer merchandise. Rio de Janeiro and Sao Paulo are quickly becoming the hotbeds for haute couture. Energy in Brazil's fashion market flows from both within and outside the country. Brazil has its own fashion industry. The country has many ready-to-wear accessory brands having a well established market.

Brazil has good potential to double its market size for luxury merchandise. Retailers need to focus on an optimum mix of operating models, and formats to become successful in the market.



References:


1)     Forbes.com

2)     Knightfrank.com

3)     Atkearney.com