An in-depth analysis of the evolution of HNWI in Brazil

Ledbury Research has released three new reports which explore the spending habits and trends of high net worth individuals in Brazil, and present a detailed analysis of opportunities, trends, and challenges for organizations involved with wealth management, retail, and services.

A new generation of young entrepreneurs are leading Brazil’s wealth revolution.   In the latest release of its Wealth Segment report series, Ledbury Research identifies these “Independent Leaders” as just one of three of the latest groups of wealthy individuals to be watched in the emerging Brazilian marketplace alongside Discerning Dynasts and Boom Benefactors.

Money equals independence: who are the Independent Leaders?

Creative and dynamic, these 25-40 year olds have had wealthy upbringings. However as the 4th generation, they chose not to join the family business and started their own instead after gaining several years of work experience where they worked from the bottom-up. Nicola Ko, senior luxury analyst at Ledbury Research, expands, “Their privileged backgrounds have not impacted their work ethic. They are still extremely driven to make their own money because they view money as a symbol of independence.”

Nevertheless, their parents would have supported them with capital to start their own businesses, which are typically in creative industries such as fashion, design, arts, advertising, communication and technology.   We have seen the total number of millionaires (with over $1million in investable assets) within Brazil increase from 345,000 in 2010 to a forecast of over 383,000 in 2013.

They are cultured youths: how luxury brands can tap into their wealth

As Brazil enters the global spotlight with the World Cup and the Olympics on the horizon, an increasing number of luxury brands are looking at opportunities within the market.

Independent Leaders have a particular affinity with one-of-a-kind pieces, be it from local designers or international. They love travelling; New York, Miami, Paris and London are key destinations for them to relax and also to shop. Another defining feature is that they are extremely in tune with the arts. Luxury brands that can offer an appreciation or a strong relationship with the arts therefore have a clear advantage with this segment. Collaborating with artists to create limited edition products, holding events at museums, and communicating craftsmanship could all offer opportunities for brands to target these cultured youths.

Additional market data on Brazil

Brazil is the largest economy in South America and the eighth biggest economy globally.  Following the 2009 recession, consumer and investor confidence revived and GDP growth reached 7.5% in 2010 – the highest growth rate in the past 25 years.

The country has a tightly regulated, domestically focused, cash-rich economy, and is continuing to stick to orthodox macro-economic policies. In addition, Brazil’s banks are profitable and well capitalised. Large capital inflows over the past year have contributed to the rapid appreciation of its currency and led the government to raise taxes on some foreign investments.

Brazil’s estimated richest 165,000 individuals increased their total wealth by 3.7% to just over $4 trillion last year (e-FinancialNews). This ranks it third in the world by value and 12th by number of individuals. Only the US and Japan outranked it on high net worth value.

Fendi store Sao Paulo, Brazil