Tells us that Brazil is the leading luxury market in Latin America and why he believes the industry has the potential to double its current size
Carlos Ferreirinha tells us that Brazil is the leading luxury market in Latin America and why he believes the industry has the potential to double its current size
“Brazil, with its steaming economy and opulent upper class, creates an enthusiasm for luxury goods rarely seen in the Western world” – as according to Suzy Menkes, who has chosen Sao Paulo to host this year’s International Herald Tribune Luxury Conference. And if Knight Frank’s recent wealth report is anything to go by all signs point to an economy ripe for luxury consumption: in 2010 Brazil played home to more high net worth individuals than Russia and India, and more billionaires than Saudi Arabia, France and Italy.
Talking with Carlos Ferreirinha, leader of luxury brand marketing agency MCF Consutoria & Conhecimento, he describes Brazil as a market yearning to fully engage luxury brands and services, but hindered by a lack of existing infrastructure, slowed by a deeply bureaucratic culture. Despite this he continues to work to entice more traditional luxury brands to participate or expand offerings in Brazil, advising clients such as Bentley, Burberry and Mercedes-Benz on local operations, business development, marketing, sales and communication.
Luxury Society spoke with Mr Ferreirinha as he prepared for the Atualuxo Conference in Sao Paulo, an event he developed to share knowledge and best practices amongst local and international luxury brand executives.
What are some key characteristics of the Brazilian consumer? What are some key customer segments in your market?
Brazilian consumers engage with all segments of the luxury market, including perfumes, cosmetics, cars, fashion accessories and shoes. For the rapidly growing upper class, such super-luxury items as real estate, jewellery, yachts and private jets are also of interest.
Luxury services, including hotels, restaurants and spas, are popping up across Brazil with world-class standards and excellent responses from clients. Brazilian consumers are very impulsive, but sophisticated in their preferences and can be swayed easily by emotion and new products or launches.
How do luxury companies handle distribution and retail in your country?
Traditionally, luxury distribution was concentrated primarily in São Paulo, but this is now changing and expanding to other growing towns and cities in Brazil. New retail destinations are being built and planned for and traditional shopping centres are being renovated and re-imagined to attract more luxury brands.
However, luxury providers continue to face hurdles in Brazil, which include lack of retail venues and units to support expansion, as well as shopping centres and high streets that are not up to the quality desired by luxury names. Brazil does not have many department stores, which can also make it difficult for brands to enter the market.
“ luxury providers continue to face hurdles in Brazil, which include lack of retail venues to support expansion and high streets that are not up to the quality desired by luxury names ”
How do the local characteristics of your market impact product design, range selection and marketing?
The Brazilian luxury consumer is attracted to brands and products that are sold internationally and popular in key markets such as the US and Europe. That said, we have some original and exciting domestic luxury brands that are making their way to the forefront of the industry. They have something different to offer and design is a very important factor in their success.
In Brazil, luxury can be recognised most obviously through the services that we provide. Few countries in the world offer the level of sophistication of our services and this comes very much from the characteristics and psyche of the local market.
What are the most effective channels of communication in Brazil? How would you describe the various importance of PR, events, magazines, digital, etc…
Brazilians respond most successfully to events as well as online and social media. Brands are expected to entertain local customers to gain their attention, which is a fairly traditional way of engaging with customers. Whilst magazines are critical to success, online conversations are becoming very important and, similar to many societies, we are rapidly becoming a digital culture.
According to the Financial Times, in 2010, 70 per cent of the country’s luxury market was concentrated in São Paulo. Where is the market concentration today?
The luxury market is still very much concentrated in Sao Paulo and this figure remains about the same in 2011. However, we are seeing some expansion out of the city into Rio de Janeiro, Brasilia and the suburbs of Sao Paulo. The north east of Brazil will be the next important destination for luxury brands as the emerging upper and upper middle classes expand into these areas.
What are the most significant trends you believe will influence the Brazilian market in the future?
We believe that we can double our current market size in terms of the luxury industry. However, this is held up by a highly bureaucratic system, which can slow business down.
We believe that the most significant products within the luxury industry will be those related to the service industry; restaurants, hotels, spas, beauty centres and facilities and holiday resorts. The international and domestic appeal of these services will help to make them very successful and will create enormous opportunities for any businesses related to services, whether they are directly or indirectly related.
Carlos will mediate the Atualuxo Conference in Sao Paolo, held between May 24 and 26 at Atualuxo House. The international business conference is focused on the excellence and differentiation of the luxury and premium market in Brazil
