Brazil’s New C-Class

by Dave

Latin Business Chronicle


The main positive consequence of the country’s recent development is
the growth of its middle class, which for the first time in history
includes the majority of Brazil’s population. The addition of more
than 20 million people – 11 percent of the population – from SES level
D into SES C officially transitioned them from “non-consumers” to
“consumers.” If the band keeps playing the same tune, another 10
million are expected to join the party in the next three to five
years.
This migration is creating a gigantic consumption class, avid
for mid-level and even high-ticket items to which they rarely had
access in the last decade.

Demographics are also changing the profile of Brazilian consumers. The population growth rate now stands at a record low of nearly 1.8 percent annually, and life expectancy has risen to more than 70 years. As a result, Brazil is now a ‘country of adults,’ where two-thirds of the population are of working age, generating and spending wealth, and at the same time sustaining the third of Brazilians who are too old or too young to work. If these demographics continue, in one or two decades this productive class will retire with time and money to spend on products and services launched specifically for them – a trend that many companies have already noticed. The Brazilian Institute of Geography and Statistics (IBGE) estimates that the revenues of currently retired Brazilians reached $10 billion in 2006.

Another notable trend is the growing number of people living alone and married couples without children, as Brazilians delay both marriage and the birth of their first child. IBGE estimates that “one-person households” will grow from 8 million to 12 million in the next four years, and that the number of couples without kids will grow at 7 percent annually, reaching 14 million households in 2014.

As these changes occur, industries see opportunities in a number of segments, from credit cards and electronics to cosmetics, tourism, food & beverage, and entertainment.

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