A number of articles of late have made reference to the growing economic power levied by Brazils low income or ‘baixa renda’ classes. Accounting annually for a spending power that amounts to R$530 billion (US$250 Billion), these classes represent 87% of the Brazilian population, yet are largely invisible in public discourse about Brazil’s consumer society and historically ignored by the fields of the media, marketing, research amongst others.
Sundays edition of O Estado newspaper carried the headline that ‘Purchases amongst (Social) Class C attracts multinationals’. This new class C, the emerging Brazilian middle class, who have in recent months attracted the attention of Wal-Mart and Kimberley Clark amongst others, are seen as a base of sleeping consumers in the emerging economic pyramid. The effect of increased spending is being seen by multinationals in sectors as diverse as cars, cosmetics, mobile phones and nappies.
Growing access to credit have in part fuelled the spending power Brazil’s lower socioeconomic classes. Renato Meirelles, sócio-diretor do Instituto Data Popular, states that 59,1% of social class C now possess at least 1 creedit card. Card owners in class D represent 50,2%, 43,9% of class E also possessing a card.
Such change possibly helps explain another story picked up on in recent days. Neogama/BBH, one of the country’s leading advertising agencies sponsored an employee tour of various low income neighborhoods of Sao Paulo. The days schedule included a number of activities for its workers: how to go shopping on a limited budget in favela markets or to work as street salespeople. Nestle have sent entire teams into favelas to better understand the feeding habits of locals and fuel thinking on suipply strategies. The VP of creative at Leo Burnett, Ruy Lindenburg stated that “what we found is that those of lower income do have some money in their pockets to spend”. Johnny Wei of Nestle argued that understanding how to shift out of a middle class perspective and speak to this population remains the key challenge. Major agencies have been seeking to work with NGO’s such as Afroreggae as a means if initiating discussion with poorer communities. Such middlemen are now consulting with major brands including Natura (cosmetics), Banco Real and Petrobras (energy).
Restructuring brands and products to both appeal and be accessible to lower income families is nothing new according to the article in O Estado. Whirlpool, for example, earlier this year launched new products from just R$329 ($150 US) after discovering the power of the favela purse.