Consumers

World Bank Report: Latin America's New Middle Class

In case this 200 page report has passed you by, The World Bank has just launched a major report into the new Latin American middle class. Its so hot off the press that we haven't had much time to get our own ears around it yet but will do in time.

The headlines are as follows ... 

  • In the past decade, the middle class in Latin America grew 50%, and now represents 30% of the population.
  • According to the experts, this growth is due to growth and job creation
  • To maintain these gains, the region needs to enact policy reforms within the employment, tax and social security sectors.

The report can be downloaded here... 

... and there is a video created by The World Bank to accompany the report

Brazilians pay highest cell phone bills in the world

Cellular owners in Brazil pay more for the use of their mobile telephone than any other country in the world. The data comes from the International Telecommunications Union (ITU). According to the criterion of Purchasing Power Parity (PCC), which has reference to the price of a basic package offered by the operators - which includes the monthly cost of subscription, 25 calls per month and 30 torpedoes (SMS messages) - the Brazilian spent on average R $ 107.00 per month on a cell phone, equivalent to U.S. $ 44.20. In 2008, the cost of local cellular minutes in peak hours was $ 0.92, while in Germany the figure was $ 0.06.  The Brazilian also pays above the global average for use of their phone to connect to the internet. Operators claim that the principal reason for such high charges are taxes which in some states constitute 40% of the overall bill.

Class C and the Credit Crunch Crisis in Brazil

As noted frequently on this blog, recent years have seen the expansion of the middle class (Classe C) in Brazil. At the end of 2008, this "slice" has already totaled 53.8% of the population, according to research from the Getúlio Vargas Foundation (FGV), which, with a greater purchasing power, began to consume more and helped the Gross Domestic Product (GDP) Brazil to record a 3% growth over the past four years. But this Sunday (15), which saw the celebration of World Consumer Day, with credit tighter and unemployment on the rise, evidence seems to point to the fact the Brazilian is "tightening their belt." And it is exactly this new C class being forced to make more adjustments in their spending. The consumption of durable goods within this class are seemingly increasingly competing with the basic household budget. In February, according to the Getúlio Vargas Foundation (FGV), the consumer confidence reached its lowest level since the survey began in 2005. "Lack of trust has influenced the pattern of consumption or habit that is Brazilian," says Professor Mark Luppi, Retail Management Program (Sample), the Fundação Instituto de Administração (FIA). According to experts, the time to put the foot on the brake "on spending, the first things to cut within the budget are of greater value, where the purchase is greater dependence on financing", especially where payment is in installments. Changes are likely to be reflected not only in the quantity but also relations to specific brands purchased - especially in non-durable goods. Some have argued that for the new class C that change does not come easily, arguing that as they created new habits, incorporating consumption, it is more difficult to abandon. If before they consume a premium brand, will look similar brands at cheaper prices. Other product areas likely to be hit may be where products are considered unnecessary: such as meals outside the home and leisure but also in areas such as telephony.

Blogs and consumer behaviour - some stats

The results of a recent quant study with Brazilian internet indicates the increasingly significant role and usage of blogs as a source of information and instrument in consumer opinion forming. The study lacks any detail or real understanding of the broader context of where information from blogs fit into broader consumer decision making, and the role of social networks and communities such as Orkut. However, the figures do indicate the increasing presence of blogs as one of the multitude of information sources being used by consumers.

72% of interviewees have used information from blogs to help make decisions about purchases

12% totally believe and 86% partially believe in the information that they find in blogs

89% of internauts have accessed a blog at least one time

Amongst the most popular blog topics are curiosities, humour, the internet, technology news and news in general

9% access blogs from outside of Brazil

24% maintain their own personal blog

the most popularly cited blgs spontaneously are Kibeloco, Humortadela e Acidez Mental, Blog do Juca

The research was undertaken by Instituto Qualibest who interviewed 1.820 men and women across Brazil, from all social classes

Green Marketing and Consumers in Brazil - 5

To mark the UN Environment Day, TWRAmericas undertook a series of discussion groups with Brazilians to look not only at the issues as they relate to consumers in Brazil but also broader issues of sustainable development and ethical consumerism. The groups approached a broad range of subjects including current behaviours and responses to a range of 'green' advertising and activities by brands. Their are a series of 5 video clips with the thoughts of the participants. Please feel free to add your own own comments or thoughts on the issues discussed.

In this third section of clips respondents discuss a range of green advertising and its influence on their behaviour as consumers.

Green Marketing and Consumers in Brazil - 3

To mark the UN Environment Day, TWRAmericas undertook a series of discussion groups with Brazilians to look not only at the issues as they relate to consumers in Brazil but also broader issues of sustainable development and ethical consumerism. The groups approached a broad range of subjects including current behaviours and responses to a range of 'green' advertising and activities by brands. Their are a series of 5 video clips with the thoughts of the participants. Please feel free to add your own own comments or thoughts on the issues discussed.

In this third section of clips respondents discuss a number of issues surrounding their own behaviour and what might influence this in the future along with some potential measures which governments might adopt to better assist consumers act in a more ecologically sympathetic manner.

Green Marketing and Consumers in Brazil 2

To mark the UN Environment Day, TWRAmericas undertook a series of discussion groups with Brazilians to look not only at the issues as they relate to consumers in Brazil but also broader issues of sustainable development and ethical consumerism. The groups approached a broad range of subjects including current behaviours and responses to a range of 'green' advertising and activities by brands. Their are a series of 5 video clips with the thoughts of the participants. Please feel free to add your own own comments or thoughts on the issues discussed.

As the second set of clips show, Brazilians, or a certan sector of Brazilian society is well travelled and well informed and has customarily adapted experiences from other societies and cultures. Our groups included individuals with direct first hand experience of visiting other countries and shared their thoughts on how Brazil compares to the practices elsewhere... The clips can be viewed with annotatios by clicking here

Green Marketing and Consumers in Brazil 1

To mark the UN Environment Day, TWRAmericas undertook a series of discussion groups with Brazilians to look not only at the issues as they relate to consumers in Brazil but also broader issues of sustainable development and ethical consumerism. The groups approached a broad range of subjects including current behaviours and responses to a range of 'green' advertising and activities by brands. Their are a series of 5 video clips with the thoughts of the participants. Please feel free to add your own own comments or thoughts on the issues discussed.

These first two clips are focused on experiences as they relate to the culture here in Brazil and the Brazilian consumer.

As is evident, there are a number of issues which give this global issue a local inflection: the broader issue of how citizens both see themselves as consumers and how they belive they are treated as consumers by brands and by government bodies. Education and the poor state of the public education system is a key problem that needs to be addressed in any attempts at modifying consumer behaviour. As respondents discussed there are certain practices, such as recycling that are nothing new in the Brazilian context, however they have in the past been driven by economic neccesity. As the country continues to grow economically one wonders how this will affect such behaviour and attitudes. Finally, there are other unique factors including the great imapct of social network communities such as Orkut, whch anyone wishing to understand the Brazilian experience should be aware of... The clips can be viewed with annotations by clicking here

Brazilian consumers and purchase decisions

Brazilian consumers are relatively unlikely to be daring at he point of sale, preferring to refer back to past purchase practices as their primary information sources followed by the opinions of their peers, family and friends. These are the results from a new research study undertaken with approximately 19 thousand Brazilians between the ages of 12 and 64 in the principal metropolitan regions and which analysed products in 200 different categories. The findings highlighted varied primary information sources for different products; for cars and electronics the internet and newspaper appear to be most influential, health and lifestyle purchases tend to be most influenced by magazines. TV is defined as most influential amongst products for the home, including food and home electronics. Point of sale influencers do appear to be increasingly important especially amongst young people, as does word of mouth – especially in specific markets such as the mobile phone.

Elsewhere an additional research study has highlighted the fact that Brazilians are the most demanding consumers across South America. They are most likely 53% to discuss purchases with others, inlcuding their children. When deciding between products 86% of Brazilians are influenced by brands and 80% by the influence of a professional.

Source: InfoMoney

The Cultural Life of Brazilians

A recent study has shed some light on the cultural life of Brazilians. According to the key findings, during the year 2007, there would appear to be a small group of consumers who are undertaking a number of cultural activities, whilst the vast majority of Brazilians appear to be excluded or self excluding. Unfortuantely the results do not indicate where and whether individuals are indeed taking part in a number of activities as opposed to just one of those listed below. Here are the headline findings. - 55% of Brazilians did not participate in any of the following activities: reading a book, visiting the theatre or an art exhibition, going to the cinema or to a live music or dance event - of the 45% who did - 31% read on average 5 books - 6%viewed on average 3 plays - 8% went on average to 2 art exhibitions - 17% went to the cinema on average 5 times - 20% went to see an average of 4 music shows - 7% to see an average of 32 live dance shows

Of those who were not reading books amongst social classes A and B, 59% reported that it was the lack of habit and 19% that they do not like to read or prefer other activities (13%). Results almost identical to classes D and E (58%, 27% and 8%). The high costs of tickets and books were an additional reason for exclusion cited by lower socio economic classes. Having previously posted here about the cost of books and access to literature in Brazil it was interesting to note that Brazilians believe that a fair price for cultural products should be as follows: Book – $19 Reals Cinema ticket - $8 Reals Music event - $15 Reals Theater ticket - $14 Reals Art Exhibition - $11 Reals

The research was undertaken by Ipsos (on behalf of Fecomércio-RJ) in more than 70 locations across Brazil. More details on the research can be found at

http://marinhonoblog.blogspot.com/2008/03/mais-dados-da-pesquisa-sobre-consumo-de.html

Brazilians own most pairs of jeans

A recent global research study has shed light on the importance of jeans in the Brazilian wardrobe.  The study surveyed around 7,700 people in ten countries found that drawers are fullest in Brazil, with 14% of respondents in that market saying they own more than 10 pairs of jeans and 40% with five to 10 pairs.

For more details of the study, try here

Brazilian housekeepers and domestic purchase decisions

Rather unsurprisingly, we thought, research has shown that domestic workers play an important role in the domestic shopping decisions in Brazilian homes.  What was of more interest was the process of swapping tips and ideas amongst domestics and between the workers and their patrons, both directly about products but also where to purchase at the best prices.   The home often serves as a laboratory in which domestic workers test products that they then might use in their own homes.  Apparently workers often choose one or two equal products in their own shopping habits. Products of beauty and hygiene are the most influencial amongst the domestics, whilst the purchase of basic foods and cleaning products often reflect  those of their bosses.

The Research was undertaken by IBGE on behalf of the agency Avenida Brasil

The new Brazilian consumer (part 1)

This weeks's business magazine Exame dedicates its front cover and significant coverage inside to a major report on the new Brazilian consumer.

The article (here in portuguese) paints the protrait of a country in transformation. Growing at a rate of 4% anually it is predicted that by 2012 Brazil will be third only to the US and China in driving global growth in consumption.

The underlying socio-economic factors behind the trends, the likely impact to be seen in the behaviour of consumers is discussed and a range of data is outlined in the article which we will report on in more detail in forthcoming days.

According to the article there are 5 key trends in a changing consumer profile. Many of them mirror well observed and much discussed trends in other advanced economies.  However given the size and potential of the Brazilian economy, the implications to different markets are interesting and the article attempts to summarise these for each of the following socio-demographic phenomenon:

  1. the growing importance of women in the economy
  2. more young couples without children
  3. more singles
  4. more middle aged consumers with higher incomes
  5. improved standards of life into older age

As we said, more to come shortly...