Add

More luxury brands accelerate expansion to Brazil

Dior flagship store, Sao Paulo

More than one million visitors are expected to travel to Rio and São Paulo for the sporting events. And Brazil wants to sell them more than just the gold and green shirts of its most famous cultural export: its football team. The world’s biggest brands want to be ready to open their doors to Brazilians and visitors alike to sell them the pure gold of luxury goods. ‘There’s a wealth of potential,’ says John Hooks, president of Ralph Lauren.

But that’s all changing, as Emanuel Chirico, chairman and chief executive of Phillips-Van Heusen, in charge of Tommy Hilfiger and Calvin Klein, knows well: ‘Brazilian consumers are increasingly interested in global brands. We see this in our growth there, as well as in the US, where Brazilian consumers are our number one international shopper.’ Rivals agree. Louis Vuitton has reported its biggest profits per square foot in its São Paulo stores.

Brazil is now the world’s eighth-largest national economy, ahead of France and just a whisker behind Britain in terms of GDP. An estimated 30 million people have entered the middle class in the past decade. Unlike Europe or Japan, Brazil has an enviable demographic profile, with only 6.7 per cent of the population over 65 and an average age of 30 or below.

But it is the top of the pyramid that has the luxury goods industry in a state of breathlessness. Consultants McKinsey estimate that about three million Brazilians can afford luxury goods. There are 24 billionaires and some 155,000 millionaires, according to the 2011 Global Wealth Report. One third of these millionaires are under 35. If the dry numbers don’t paint the picture, look around. São Paulo has more helicopters than any other city in the world (for many it is the preferred method of getting around the city). Brasilia, the nation’s capital, is a major yacht market — even though it’s landlocked.

Brazil is now the world’s eighth-largest national economy, ahead of France and just a whisker behind Britain in terms of GDP. An estimated 30 million people have entered the middle class in the past decade. Unlike Europe or Japan, Brazil has an enviable demographic profile, with only 6.7 per cent of the population over 65 and an average age of 30 or below.

Even the way Brazilians pay for goods is different. If you went into a Bond Street store and asked to pay for shoes or a bag in instalments or hire purchase, you’d be shown the door, not the latest collection. Not in Brazil. Consumers love credit — in fact, they demand it. And retailers put up with it. More than 70 per cent of luxury-product sales are in credit-card instalments. Giorgio Armani allows Brazilians to pay by cheque, in up to ten instalments. On purchases of 10,000 Brazilian reals or more (£3,000), Tiffany will allow up to ten payments.

adapted from the Evening Standard

 

CPP-LUXURY iOS App