The Brazilian middle class is mushrooming, fueling a consumption boom.
As we explain in our recent report “The Brazil Opportunity: A Guide for Marketers,” the Brazilian middle class is mushrooming, fueling a consumption boom. As retail spending rises, shopping malls have been expanding in tandem. Malls have a broad appeal in Brazil, since they’re not only places to shop but a respite from the busy, sometimes dangerous streets and a place for socializing.
Big players like BRMalls, Multiplan, Aliansce and high-end Iguatemi have been constructing properties across the country. By the end of 2013, 64 shopping centers will have opened in the country — a record number of openings in a year — according to research company IBOPE Inteligência. Malls have been expanding beyond the South and Southeast, where Brazil’s wealthy have traditionally clustered, and into the relatively poorer North and Northeast. Between 2008 and 2013, the number of malls in the North more than doubled, according to ABRASCE, the national mall association. We’ll see marketers establishing a presence in more cities as a middle class sprouts up around the country: Recent research from Boston Consulting Group shows that brands will need a footprint in 405 cities by 2020 to reach 75 percent of middle- and upper-class households, vs. 345 today.
With sales of luxury goods expected to grow at least 12 percent this year, per the Financial Times, the high-end segment is also growing. In São Paulo, properties like JK Iguatemi (accessible only by car, or helicopter) and Cidade Jardim have opened in recent years. Recife’s RioMar opened in October of last year, and Rio de Janeiro’s Village Mall opened two months later. These malls provide homes to brands like Gucci, Prada, Coach and Dolce & Gabbana.
While some observers are concerned about slowing growth in Brazil, industry figures are bullish. Renato Rique, chairman and chief executive of Aliansce Shopping Centers, recently told the Financial Times, “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.”
Image credit: Shopping Cidade Jardim