Commentary

Does Brazil Matter For Brand Owners?

Brazil. Home to Carnival, Samba and Havaianas. The proud host of this year’s soccer World Cup and the Olympics in 2016. But also laboring against a perception of violence, corruption and poor education and healthcare. Are we sure Brazil matters for brand owners? 

The short answer is yes. The numbers are eye-opening: the fifth biggest country in the world and the sixth richest. Blessed with natural resources and a $7 billion luxury market, Brazil creates 19 new millionaires every day, and 35 million people have escaped poverty in the last 12 years. It is set to grow between 15 and 25% over the next five years.

Brazil is changing fast, but how do we make sense of the nature and direction of change? Looking at Brazil from a cultural, social and economic perspective, six key shifts emerge.

1. Growing Female Empowerment

If women have until recently been seen more as conventional sex sirens and mother figures, the near future will be marked by female empowerment. From Dilma Rousseff to Brazil’s women’s soccer team, the times are a-changing. As women take a more central role in society, the fertility rate has dropped from 4.1 children/family in 1980 to 1.9 today. As the slogan goes, “la fabrica esta fechada” (the factory is closed). And 49% of entrepreneurs with companies less than 42 months old are women (versus the global average of 37%).

2. DIY Culture

Brazilians are taking ownership of a future of entrepreneurship and innovation, leaving behind a traditional culture of state support. Favela occupants, once the hopeless within society, are combating life’s uncertainty by creating organized communities, responsible for security, daycare and retail outlets. Social currencies are being created to help economic development: more than 70 are now in operation, issued by community banks in parallel to the Real. And in terms of entrepreneurship, one in six adults either runs or is trying to launch a new venture, while another 15% already runs a more established small business.

3. Favela Rehab

Beachlife aspiration isn’t going to disappear, but it’s Brazil’s favelas that are the motor of cultural change. Better transport connections are key here: the iconic Complexodo Alemao, a cableway connecting Brazil’s favelas to Rio de Janiero, was inaugurated in 2011. But ground-up movements are equally responsible: vibrant new hotspots like Bob Nadkarni’s Jazz at the Maze are popping up all over the favelas. And over on TV, while telenovelas used to portray the lives of the rich and famous, now the heroine of the TV series “Avenida Brazil” is a girl living in a favela.

4. Tech Enablement

As technology becomes affordable for most of the population, it’s shaping opportunities and changing behaviors. Every classroom in Rio municipal schools is to be equipped with Wi-Fi and given access to Educopedia, an online platform for collaborative learning. Tech is also seen as key for entertainment: 82% believe that equipping the home with tech items increases fun for the family; and for making informed consumer choices, 70% of middle class consumers have used the web for price comparison in the last year.

5. Promoting Diversity

Brazil has traditionally been marked by white economic and cultural power, but that’s all changing. Affirmative action is making waves: in Rio’s state universities, 20% of places are set aside for black students, with a further 25% reserved for a “social quota” of low-income families. And favela culture continues to break down barriers; for example, BaileFunk is an iconic musical genre with African favela roots now spreading to the wealthier classes.

6. Citizen Action

With its wealth of natural resources, Brazil is evolving from exploitation to greater preservation. Widespread grassroots opposition to deforestation and environmental degradation has forced the government’s hand, as it has in the agriculture industry: one quarter of the workforce is in agriculture, and pressure is being applied on agri-businesses to employ more sustainable processes. 

So, what does all this mean for brands? Here are five key take-aways.

1. The emerging middle class is the must-win audience. It now represents over 50% of the population, and it’s expected to reach 60% by 2030. That’s over 90 million people with a particular value system of family, stability and aspiration that brands have the opportunity to speak to.

2. Women represent an enormous opportunity. Dove and Rexona have shown how to couple sexiness and femininity with a strong, independent attitude to life.

3. Brands should appeal to the burgeoning national pride, but be aware that Brazilian-ness will vary in power by category: some categories are owned by Brazilian brands (hygiene, skincare), while others require foreign brand endorsement (e.g., medications and supplements). As elsewhere in the world, Unilever does a case study job in adapting to local tastes and flavors.

4. Thinking about where brands should focus their responsibility strategy, the environment is not today’s priority. It is currently the social dimension that is more meaningful, and bearing in mind the disruption caused by the World Cup and the Olympics, brands will have to manage their sporting associations skillfully.

5. The media landscape in Brazil is the same, but different. Brand owners need to: Think real-time, connecting on social platforms. Think video — YouTube is huge in Brazil and has been used by the likes of Nissan, Visa, Whirlpool and Burger King to launch major campaigns. Think blog —  look at how Converse increased their reach. And don’t underestimate TV, it’s still growing in Brazil!

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