The document provides an overview and guidance for marketers on opportunities in Brazil. It discusses Brazil's growing middle class and expanding consumer spending power, presenting opportunities for international brands. While Brazil's economy has slowed, consumers remain optimistic and the population is young. The World Cup in 2014 and Olympics in 2016 will drive further momentum. To succeed, marketers must understand Brazilian culture, join social circles, adapt flexibly to challenges, and persevere through hurdles of the complex market.

1. THE BRAZIL OPPORTUNITY
A GUIDE FOR MARKETERS
EXECUTIVE
SUMMARY
November 2013

2. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
ABOUT THE
REPORT
In the decade-plus since the BRIC moniker was coined, the expectation that Brazil would emerge as a robust new market for brands has been
borne out. The middle class today is mushrooming, fueling a consumption boom. Yet many international brands are absent or only starting to
eye the terrain.
Based on on-the-ground research, “The Brazil Opportunity” presents a primer for brands seeking to benefit from the emergence of a mass
market in the world’s fifth most populous country. It offers a wide-ranging introduction to a complex culture and consumer mindset: a look at
the forces that have shaped Brazilian society and how it’s evolving in tandem with massive political, economic and social shifts. The report also
spotlights Brazil’s media landscape and strategies for overcoming domestic hurdles.
Recommendations for brands are included throughout, as well as examples of how domestic and international marketers are engaging and
motivating Brazilian consumers.
The opportunities in Brazil are only expanding as the upcoming World Cup and Olympics drive consumer momentum. This report provides a
foundation for brands looking to succeed in this burgeoning market.
i
The following is a preview of JWT’s 82-page report. To purchase “The Brazil Opportunity,” please visit
JWTIntelligence.com. JWT clients can contact Hallie Steiner (hallie.steiner@jwt.com) for a copy at
no cost.
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3. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
METHODOLOGY
“The Brazil Opportunity: A Guide for Marketers” is the result of quantitative, qualitative and desk research conducted by JWTIntelligence
throughout the year. Specifically for this report, we conducted on-the-ground research in Brazil. Colleagues at JWT São Paulo, JWT Porto
Alegre and JWT Rio de Janeiro, as well as Ampla Comunicação in Recife, provided invaluable assistance and insights. In addition, we
interviewed four experts.
This report also includes data from quantitative surveys conducted using SONAR™, JWT’s proprietary online tool, and featured in previous
reports. Data from JWT’s “Meet the BRIC Millennials” is derived from a July 2013 survey of 2,417 adults aged 18-plus (604 Brazilians, 606
Russians, 605 Indians and 602 Chinese). Data from JWT’s “AnxietyIndex 2013 Global Report” is derived from an October 2012 survey of 6,075
adults in 27 markets.
EXPERTS
FABIANO DESTRI LOBO,
managing director, LatAm,
Mobile Marketing Association
MARCOS TROYJO,
co-director, BRICLab, Columbia University
EZRA GELD,
CEO, JWT Brazil
BENJAMIN WHITE,
founder, 21212 Digital Accelerator
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4. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
MARKET
OVERVIEW
Close to 200 million people across 3.3 million square miles—a landmass bigger than India or
the contiguous United States—generating almost $2.4 trillion in GDP Welcome to Brazil, “the
.
country of the future.”
Exuberant consumers
Percentage who intend to purchase in
each category in the next year or two
Brazil
$1.6
TRILLION
Forecast annual
spending power of
Brazilian households
by 2020*
Forecast to become the world’s sixth
largest economy by 2030, according to a
January report by PwC, Brazil has seen an
influx of foreign brands since the economy
stabilized in the mid-’90s and then boomed
over the last decade. While growth has
slowed—and several intractable issues
like poor infrastructure still handicap
the country—brands will find a relatively
uncluttered market and a nation of young
spenders who are hungry to try new things
and optimistic about their financial future.
Meanwhile, rich natural resources—
including oil, iron and fertile land—and
long-term government initiatives look
likely to sustain momentum for years to
come. Average real wages are expected
to grow through 2016, supporting income
gains, according to The Economist
Intelligence Unit. Recent programs like
2011’s Brasil Maior (Bigger Brazil) aim to
increase competitiveness, productivity and
innovation. Plus, the FIFA World Cup in 2014
and the Summer Olympic Games in 2016
promise to put a global spotlight on Brazil
and drive spending.
For North American and European firms,
Brazil also presents lower barriers to entry
than its BRIC peers, given the degree of
cultural overlap, including a Latin-based
language, a Judeo-Christian faith, a
European history and a robust democracy
(based on the American system). Shared
roots and cultural values, according to The
Economist Intelligence Unit, also mean
Brazilians are more amenable to working
with Western multinationals.
Six in 10 international business leaders
polled by Ernst & Young in 2012 were
considering setting up operations in Brazil
this year, and more than 8 in 10 believed
Brazil will only get more attractive over
the next three years (by comparison, fewer
than 4 in 10 believed this about Europe).
Global
67
Personal
electronics
39
67
Home
electronics
33
52
Home
appliances
26
54
Car
24
48
Special
vacation
24
19
Jewelry
11
28
House
10
Source: GfK Roper, March 2013
*Source: Boston Consulting Group
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5. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
MARKET
OVERVIEW
(cont’d.)
While some businesses eyeing Brazil might
be deterred by recent economic indicators,
the market is extremely robust. Here’s the
reality:
• Consumers are young: The average age in
• Brazil is currently the world’s seventh
• Education is improving: More than
biggest economy.
• While growth has slowed, it hasn’t
stopped. The economy expanded by 1.5%
in the second quarter. In July, retail sales
grew 6% year-over-year, almost double
the median forecast. Sales of luxury
goods are expected to grow at least 12%
this year, per the Financial Times.
• Per capita income of families jumped
by 32% between 2001 and 2011, and the
ranks of the middle and upper classes are
forecast to keep expanding over the next
decade (see chart).
You have a convergence
of factors creating
what you can call the
perfect sunny day.
There is the agroenergy sector that has fared very well
… [and] income growth has continued
year after year: That has attracted a
lot of brands.”
Brazil is 30.3 years, notably younger than
consumers in developed markets like the
U.S. (37.2) and the U.K. (40.3).
70% of middle-class children have had
more education than their parents.
University enrollment is higher than in
China and India.
—MARCOS TROYJO, co-director,
BRICLab, Columbia University
• Inflation over the next few years is
expected to remain relatively low,
and below levels projected for Russia
and India.
Economic evolution
Brazil’s burgeoning upper and middle class
Upper class
Middle class
Lower class
2003
2013
2023
13%
22%
33%
• Unemployment has fallen significantly,
dropping from more than 12% in 2003 to
less than 6% in July 2013.
38%
54%
• The population is highly urban and
becoming more so, with 87% in urban
areas.
58%
49%
24%
176 million
total population
201 million
total population
9%
216 million
total population
Source: Data Popular, 2013
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6. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
THE MASSMARKET
OPPORTUNITY
A mass market is emerging for the first time in Brazil: Customers across classes are growing increasingly likely to shop at the same stores, for
the same products, just as CEOs and Average Joes might buy their khakis at Gap. (Indeed, Gap is planning on entering the market.) “Brazil’s
economy and Brazil’s consumer base were not built with a mass midmarket in mind, and we are only recently moving into that mindset,” says
Ezra Geld, CEO of JWT Brazil.
Traditionally, consumer segments have been
clearly delineated according to class, with
domestic brands targeting distinct cohorts.
Supermarket chain Epa Supermercados
and the soft drink Dolly, for instance,
have created loyal consumer bases among
the lower classes thanks to their cheap
prices and communication styles, while
grocery retailer Pão de Açúcar has been the
territory of the upper class. The brands’
identities remain strongly linked to these
demographics.
Today, that’s changing: The upwardly
mobile, increasingly affluent members
of the middle class no longer want to
buy products and patronize retailers that
reinforce a class identity they’re looking to
shed. Domestic brands are struggling to stay
relevant, which opens up rich opportunities
for international brands.
Upper-class consumers are also starting to
look beyond the brands that normally cater
to them. In fashion, for instance, mixing
luxury labels with cheap chic has become
more prevalent. Magazines like Elle and
Vogue encourage readers to blur the lines
between high and low.
Until 10 years ago,
Brazil was a twoclass market. You had
money, or you didn’t
have money. There
was no in between. … Then the
population moved up into the
middle class, and brands are having
to play catch-up and to reposition
themselves very quickly.”
—EZRA GELD, CEO, JWT Brazil
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7. THE BRAZILIAN CONSUMER
Consumers are classed into five segments. Most of the middle cohort,
Class C, is gaining spending power for the first time and embracing
the opportunities that provides. Across classes, consumers are
driven by a desire to demonstrate status. Ebullient and emotional,
Brazilians are spenders, not savers, and inclined to buy on impulse.
They’re not only flexing their muscles as consumers but also as
citizens, demanding more from both government and business.
What we cover in this section:
1. The Expanding Shopping Basket
2. Class Structure
3. The Citizen Consumer
4. Status, Hierarchy and Ambition
5. Spenders, Not Savers
6. Right-Brain Nation
Image credit: Adam Jones
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8. THE BRAZILIAN CULTURE
Forged from a rich mixture of influences, Brazilian culture is characterized
by both a robust national pride and a longstanding inferiority complex,
a vibrant optimism and a strain of bittersweet nostalgia. Family and
community are of prime importance in this collectivist culture, with
football—almost a national religion—not far behind. Stratification is
ingrained, but that’s changing as culture starts to trickle both down and up.
Marketers will also need to understand regional differences—and bairrismo,
or local pride—in a country that’s bigger than the continental U.S.
What we cover in this section:
7. Syncretism
8. Brazilian Pride
9. Enduring Optimism
10. Collectivism
11. Trickle-Up Culture
12. A Passion for Football
13. Regional Differences
Image credit: Will Palley
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9. MEDIA AND TECHNOLOGY
Television dominates the media landscape, but consumers are also
increasingly digital, embracing mobile (Brazil is ranked fourth in
mobile connections globally) and social networking. Brazil is home
to one of the world’s biggest media networks, a fragmented radio
and newspaper market, and a fast-changing pay TV market.
What we cover in this section:
14. Media Landscape
15. Mobile Momentum
16. Social Media
Image credit: daoleduc
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10. OVERCOMING HURDLES
International brands can tap into several inherent advantages
they carry over entrenched domestic brands—but will also need to
counter an enduring affection for local goods and navigate some
serious business challenges, including protectionist policies and poor
infrastructure.
What we cover in this section:
17. Taking on Domestic Brands
18. Navigating the “Brazil Cost”
Image credit: Pēteris2009
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11. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
LOOKING
FORWARD
The initial burst of optimism and
enthusiasm around the BRIC markets
has cooled recently as their economies
inevitably sputter and many longstanding
issues remain unresolved. Brazil hasn’t
been immune. A recent Economist report
hazards a slowing of Brazil’s growth,
pointing to various inauspicious economic
indicators, infrastructure problems, hints
of future turbulence and other signs of
some disruption in the country’s steady
upward trajectory.
As a counterbalance to Brazil’s slowing
growth, the unemployment rate has
remained low, so consumers are still
spending. And in some cases, Brazilians’
exuberant consumption belies their
still relatively low disposable income
vs. developed markets. For instance,
Brazilian women spend as much on beauty
products as British women, and by 2016,
Brazil is expected to overtake Japan
as the No. 2 market for cosmetics and
fragrances, behind the U.S.
Yet “there is scope for the social and
economic advances of the past two
decades to continue,” the magazine
reported. As it stands, these advances
have resulted in an emerging mass market
whose consumers are not only producthungry but eager to try new things and
enamored of foreign brands, buying up
imports despite high tariffs.
The population is also young and growing,
and hugely digital. Mobile penetration
is forecast to reach about 177% by 2017,
according to the GSMA, and by next year
around 40 million Brazilians are expected
to be connected to broadband Internet.
E-commerce and m-commerce, an
attractive solution to the challenge
of marketing across a vast landmass,
are growing.
I have been hearing about slowing growth and the middle class being
stretched to its limits for the last four years now. But that is just not
what we are seeing on the ground.”
The upcoming FIFA World Cup in 2014
and the Summer Olympic Games in
Rio de Janeiro in 2016 offer a perfect
springboard for establishing a long-term
presence in Brazil. While the country’s
spending on World Cup preparations has
set off widespread political and cultural
turbulence, these milestone events are
expected to generate significant energy
and enthusiasm once under way. Brazilians
are deeply proud of their country and
have long yearned to assume a higher
profile on the global stage. Emotions are
likely to swell as the spotlight shines on
Brazil, presenting unique opportunities to
marketers over an extended period.
Politically, the future will see some
much-needed reforms. Next year’s
federal election will be the first in which
the 2010 “ficha limpa” (clean record)
law—barring candidates guilty of certain
offenses from running for eight years—is
in effect. Meanwhile, a steadily improving
infrastructure will facilitate imports and
internal transportation of goods.
—RENATO RIQUE, chairman and chief executive of leading
mall operator Aliansce Shopping Centers, “Aliansce Shopping Centers
says Brazil goes right on growing,” Financial Times, Oct. 14, 2013
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12. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
THREE KEY
RULES
International brands that can fuse their expertise with a careful
understanding of Brazil’s culture and consumers will find massive
opportunities in this dynamic environment—especially those that
can join the samba circle, find their jogo de cintura and persevere
through Brazil’s inevitable challenges.
Join the samba circle: Brazilians are, for the most part,
optimistic, emotive people who value community, social cohesion
and joy. The samba circle offers a useful representation of the
Brazilian spirit: people dancing together, following the rhythm
and harmoniously coexisting. Those who remain outside the circle
are perceived as unfriendly, boring and even hostile, and will
eventually be rejected by the group.
This kind of flexibility is an example of jogo de cintura, a uniquely
Brazilian concept that has no direct translation but effectively
means being malleable enough to adapt to diverse situations—
especially problematic ones—and come out ahead by deploying
ingenuity and tenacity. Brands will need to find their own jogo de
cintura to win over Brazil’s often unpredictable consumers.
Persevere through hurdles: There’s no doubt that breaking into
Brazil can be tough. Infrastructure is underserved, legislation
is complex and confusing, and protectionist policies handicap
international brands. But perseverance will be rewarded for
marketers that can cater to the unique needs and whims of these
exuberant consumers.
To join the circle, brands need only be fun, positive and vibrant.
Embrace Brazil’s characteristic optimism, energy and national pride.
Find your jogo de cintura: Brazilians are flexible, creative and
entrepreneurial by nature. They solve problems inventively,
bargain constantly and reconfigure slogans, products, services
and even laws to suit their needs. (For instance, Rio de Janeiro
was forced to make stopping at a red light optional after 10 p.m.
thanks to residents’ stubborn disregard for traffic lights at night,
mostly due to security concerns.)
Image credit: Hanumann
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13. THE BRAZIL OPPORTUNITY: A GUIDE FOR MARKETERS
THE BRAZIL OPPORTUNITY:
A GUIDE FOR MARKETERS
Written by
Will Palley
466 Lexington Avenue
New York, NY 10017
Edited by
Marian Berelowitz
www.jwt.com | @JWT_Worldwide
www.jwtintelligence.com | @JWTIntelligence
www.anxietyindex.com | @AnxietyIndex
Director of trendspotting
Ann M. Mack
Trends strategist
Nicholas Ayala
Proofreader and
fact checker
Hallie Steiner
Fact checker
Sarah Siegel
SONAR™
Mark Truss
Karen Montecuollo
Elizabeth Burns
Design
Peter Mullaney
This report would not have been
possible without the support of JWT
Brazil and Ampla Comunicação in Recife.
Special thanks to:
Fernand Alphen
Jessica Bouchet
João Caputi
Silvia Curiati
João Dabbur
Renato Duo
Felipe Giacon
Pedro Gropo
Giulia Joau
Fernando Lima
Pedro Lima
Paula Lins
José Lucas de Paula
Juliana Maaz
Luiza Madeira
Isabella Mulholland
Stella Pirani
Fernando Prado
Mariana Prado
Elisa Santilli
Barbara Schneider
Daniel Simon
Aurora Teixeira
Lucia Zachia
Caio Zuccolotto
CONTACT:
Ann M. Mack
212-210-7378
ann.mack@jwt.com
@annmmack
Will Palley
212-210-7225
william.palley@jwt.com
@wpalley
© 2013 J. Walter Thompson Company.
All Rights Reserved.
The following is a preview of JWT’s 82-page report. To purchase “The Brazil Opportunity,” please visit JWTIntelligence.com. JWT clients can contact Hallie Steiner
(hallie.steiner@jwt.com) for a copy at no cost.
JWT: JWT is the world’s best-known marketing communications brand that has been inventing pioneering ideas for the past 150 years. Headquartered in New York, JWT is a
true global network with more than 200 offices in over 90 countries, employing nearly 10,000 marketing professionals. JWT consistently ranks among the top agency networks in
the world and continues a dominant presence in the industry by staying on the leading edge—from producing the first-ever TV commercial in 1939 to developing award-winning
branded content today. For more information, please visit www.jwt.com and follow us @JWT_Worldwide.
JWTIntelligence: JWTIntelligence is a center for provocative thinking that focuses on identifying shifts in the global zeitgeist. Its aim is to bring the outside in—to help inspire
ideas beyond brand, category and consumer conventions—and to identify emerging opportunities so they can be leveraged for business gain. As a part of JWT, the world’s
best-known marketing communications brand, JWTIntelligence has conducted trends research and analysis across categories and geographies for nearly a decade. For more
information, please visit www.jwtintelligence.com and follow us @JWTIntelligence.
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