The Power and Influence of an Emerging Social Class

THINK LATIN AMERICA
How to Leverage the Power and Influence of An Emerging Social Class with Increased Purchasing Power
MARCO SIMÕES
COCA-COLA BRASIL

WE ARE ALMOST
200 MILLION PEOPLE.
ALL SHARING THE SAME DREAM: A BETTER FUTURE.
Source: U.S. Census Bureau, International Data Base, 2009

BRAZIL IS DIVIDED IN 5 REGIONS,with many differences among them
The Northeast Region,
beautiful beaches, but stricken by droughts
28.0% of population
15.4% of GDP
North Region, mostly
covered by rainforest,
is the largest region
7.8% of population
4.5% of GDP
Central-West Region,
the country’s
capital (Brasília) and
much of the farmland
6.7% of population
10.4% of GDP
Southeast Region has the largest cities (São Paulo and Rio), and is the industrial and financial center
43.0% of population
53.7% of GDP
The South Region has industries and
agriculture
14.5% of population
15.8% of GDP
Source: U.S. Census Bureau, International Data Base, 2009

FIFA WORLD CUP 2014
OLYMPICS 2016

SOCCER, SAMBA, CARNIVAL
ETHANOL, OIL, AIRPLANES
AMAZON, PANTANAL, ATLANTIC RAINFOREST

BRAZIL
IS ON THE
SPOTLIGHT

AND THE GOOD NEWS IS:
THE FUTURE IS
HAPPENING NOW.

WORLD’S 5TH LARGEST ECONOMY BY 2015
A leading country in South America and one of the BRIC countries, is #8 today
GDP
US$ billion
Top Economies in 2008
15000
5000
4000
3000
2500
2000
1500
1000
500
USA
JAPAN
CHINA
GERMANY
FRANCE
UK
ITALY
BRAZIL
Source: World Development Indicators Database – World Bank

THE EMERGING MIDDLE CLASS

WHAT IS THE MIDDLE CLASS
INCOME IN BRAZIL?
US$ 7,200-US$ 31,200/Yr – 25% growth in 5 yrs
Source: CPS/FGV, IBGE (PNAD) – Relates to Family Income

EMERGING MIDDLE CLASS GROWTH
56%
of Brazil’s population
= 120MM
49%
= 91MM
38%
= 64.1MM
2003
2008
2015
Source: CPS / FGV / PNAD / IBGE

49% OF THE COUNTRY’S POPULATION IS IN THIS RANGE
IT’S MORE THAN 90 MILLION PEOPLE
MORE THAN GERMANY’S ENTIRE POPULATION
Source: CPS/FGV, IBGE (PNAD)

THOSE PEOPLE REPRESENT, TODAY,
THE LARGEST CONSUMPTION MARKET
AND/OR POTENTIAL MARKET IN THE COUNTRY.
46% OF ALL INCOME
67% OF THE EMPLOYED WORKFORCE
58% OF TOTAL COMPUTER OWNERS
50% OF TOTAL TV OWNERS

AND THESE NUMBERS REFER TO 2008!
IN 2015, THEY WILL REPRESENT
56% OF THE POPULATION, WITH
54%* OF THE PURCHASING POWER.
* Projection

HOW IS THIS AFFECTING THE CONSUMER MARKET?

WHAT HAVE WE LEARNED

NEW PRODUCTS
AND SERVICE NEEDS
WHAT KIND OF CAR
APPEALS TO THIS CLASS?
WHAT KIND OF BEVERAGE
DO THEY DRINK?
WHAT SERVICES
DO THEY NEED?

HALF GLASS FULL IS THEIR WAY OF SEEING LIFE
They share pride and satisfaction of their
achievements and have an optimistic view of the future.

“
FAMILY IN
HONEYMOON
Parents and children
are building a better future together
with no conflict of generations .
”

“SHE” IS THE
LEADER
Although women are not the
main income providers, they have
great influence on purchasing.
Mothers are the foundation
of the family, recognized
by their community.

“
“MY COMMUNITY
IS MY WORLD”
The community is their extended
Family – help lives next door.
Services must understand this
kind of interactions.

“
THE GROCERY STORE ON THE CORNER IS MY EVERYDAY PARTNER
”
Small markets understand these people’s financial circumstances, allowing flexible and delayed payments.

TECHNOLOGY MEANS SAFE
ENTERTAINMENT
Buying electronics for the household
is not a matter of social status,
it’s about the well-being of the family.
With computers at home, children are safer and
spend less time out in the streets.

TECHNOLOGY AS
A SOCIAL LADDER
As it becomes more accessible, technology
now means more than job opportunities –
it’s a passport for a better future
and an icon for social ascension.

WHAT IS
COCA-COLA BRAZIL
DOING?

BETTER FUTURE
COCA-COLA BRAZIL’S INTEREST
COMMUNITY INTEREST
YOUNG PEOPLE
INCOME GENERATION
Enterprising
First Job
vision
BUSINESS + COMMUNITY GROWTH
Coca-Cola and the community sharing
a single goal: a better future for everyone.

BUILDING A BETTER FUTURE
FOR THE EMERGING
MIDDLE CLASS,
THE COUNTRY AS
A WHOLE GROWS
STRONGER AND SO
DOES THE COCA-COLA BUSINESS
THIS IS SOCIAL BUSINESS.

TO MAKE IT HAPPEN,
WE CREATED THE
“COLETIVO” COCA-COLA.

TODAY, WE HAVE 6 COLETIVOS
IN OPERATION.
There will be many more throughout the country in the future
2009
6 coletivos
2020
1500 coletivos

TO MAKE IT HAPPEN, COCA-COLA BRASIL USES TECHNOLOGY IN A “PLAYFUL WAY”
Besides out-of-home activities, students can learn through simulations of POP duties in a computer game.

TECH IS THE FUTURE

EVERY YEAR, PEOPLE GET MORE CONNECTED
Internet Penetration in Brazil
89%
90%
80%
76%
71%
70%
60%
45%
50%
39%
40%
33%
25%
30%
21%
20%
15%
10%
0%
2007
2008
2009
Upper class
Lower class
Middleclass
Source: IAB indicadores, 2009

INTERNET CAFES BECAME THE MEETING POINTS FOR THE YOUTH
INTERNET ACESS OUT OF THE HOUSEHOLD
RESPONDS FOR 49% OF ALL ACCESS
THERE ARE MORE THAN 90,000 I-CAFES IN BRAZIL,
COMPARED TO 2,600 BOOKSTORES OR 2,300 MOVIE THEATERS.
Source: FGV

WE DON’T HAVE TO PERSUADE MIDDLE CLASS MEMBERS ABOUT THE IMPORTANCE OF TECHNOLOGY
91%
agreeitisveryimportantthatchildren haveaccess to computers.
80%
believethatpeoplewho don’t understand technology
aretrappedinthepast, and have less opportunities in life.
79%
agreethat computers are essential
and it’simpossibletolivewithoutthem.
44%
ofyoungpeopleagreetheyfeel addicted to technology.
Source: McCann-Erickson/Data Popular research, 2008

TECHNOLOGY IS ASSOCIATED WITH STATUS, INDICATING PURCHASE INTENT
68% intend to buy a widescreen TV
64% are thinking of buying or changing their computers
61% are considering buying/changing their digital cameras

LAPTOPS ONLY FALL BEHIND CARS
AS A SIGN OF STATUS
High Status Products
78
64
51
New car
Designer watch
Laptops

AND THEY ARE ALSO BUYING ONLINE:
59%
of online buyers
in Brazil come from
the middle class,
representing
10% of turnover.
Source: e-bit

FINAL MESSAGE

TO ACHIEVE SUCCESS IN BRAZIL,
ONE NEEDS TO CONQUER
THE EMERGING MIDDLE CLASS.
THEY ARE THE FUTURE.
AND THE FUTURE HAS ALREADY STARTED.

BEING SUCCESSFUL IN BRAZIL (AND LATIN AMERICA) WILL MAKE A DIFFERENCE FOR EVERY BUSINESS.
This is the decade of Brazil:
The land of the Olympics,
the Football World Cup,
the energy of ethanol and oil.
And home to the world’s fastest growing consumer power.

THANKYOU
MARCO SIMÕES
MSIMOES@LA.KO.COM

The Power and Influence of an Emerging Social Class

by Think Latin America

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