Brazil’s Next Consumer Frontier

Brazilian national companies, along with the international companies looking for opportunities to introduce their products and/or services to new consumers, should also begin looking at the cities in the interior of the country.  These cities provide an increasing consumer base, along with a population with growing purchasing power.

Yet, following a survey done by The Boston Consulting Group’s Center for Consumer and Customer Insight on 3,600 middle-class and affluent households in both capital and interior cities in all regions of Brazil, they found that “even though middle-class and affluent consumers in the interior are every bit as bullish about the future as those in the country’s capitals—and are just as eager to spend their growing incomes on product categories they care about most—companies are neither adequately meeting their needs nor in sync with their purchasing habits. Interior consumers prefer to touch and feel products before buying them, for example.”

Other interesting facts about the cities in the interior of the country, and the opportunities it creates for foreign investors, include:

– “by 2020, interior cities will account for nearly half of incremental household consumption, or around $130 billion in added spending. They will be especially important sources of growth in sectors such as financial services, automobiles, and apparel.”

– “Some 1,400 cities, each with more than 5,000 households, have no supermarkets that belong to Brazil’s top 20 chains, for example. Although banking services are available in every Brazilian municipality, nearly 5,500 cities lack branches dedicated solely to offering premium financial services to wealthy customers—even though that segment is growing much faster in the interior than it is in bigger cities”

– “Middle-class and affluent households in the interior spend 19 percent less on postpaid mobile-telecommunications services and 45 percent less on private education. Affluent households in the interior spend half as much on air travel as their capital and metro-city counterparts.”

“Companies that capture the prize in Brazil’s increasingly lucrative interior will be those that can best align their retail, operational, and marketing footprints with consumer demand. To succeed, they must gain a clear understanding of the preferences of interior-city consumers and of how to make the entire shopping experience as easy as possible. Companies must also substantially expand their coverage of interior cities and explore innovative, cost-efficient business models that can enable them to reach smaller, more remote concentrations of middle-class and affluent households.”

To read the entire article, click here.

Occasio team


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