The Luxury Market in Brazil

This chapter will reveal how the universe of luxury arose, its essence, its importance, how personal experiences thoughout history and from different cultures relate to it and how it developed in Brazil. It is a trip that needs to be taken to understand the concept of luxury and how that informs one’s reactions to it.

This chapter addresses the global luxury market, including that in BRIC (Brazil, Russia, India and China) and Latin America. After all, to understand the activities of the Brazilian luxury market, one must have a broad view to compare it to the volume of business in worldwide. Foreign enterprises annually commission surveys from consulting companies to understand the size of the luxury market in high net worth (HNWI) groups in BRIC, in underexploited areas, such as in Latin America, and, more specifically, in promising countries such as Brazil, in order to decide where to invest for profit. Utilizing data from these surveys conducted in the main economic groups will help us to understand the market.

After an examination of the luxury market worldwide, we will now move on to its behaviour in Brazil, outlining the stage this market has reached and assessing its importance in the country’s economy. Learning where the luxury market is to be found, and which enterprises are part of it, should help in understanding the profitability of the main segments of this trade in Brazil.

One of the strengths of this book is its in-depth knowledge of luxury consumers and their importance in this market. The goal of this chapter is to introduce their characteristics: aspirations, social class and location, income, spending habits, their expectations of the products, how faithful they are to a brand and which services they look for. To be able to identify a luxury client one must learn what characterizes him or her. One particular aspect is related to percept ions, where ‘having’ is more important than ‘being’. This means that any lack of recognition for ‘being’ requires higher levels of ‘having’ as a password to a social group and to access its status. The condition of ‘having’, however, reflects two sides of consumerism: the satisfaction of a personal need, and social ascension or belonging to a group. The economic elite can be split into two subgroups: emerging (new money) and traditional (old money), where the latter is usually distinguished from the former by a refined taste.

In this chapter we will examine the importance of the ‘communication’ tool for reaching the target luxury market, ranging from the most efficient way to convey a message, to the use of advertising and events. From the start it is important to highlight that successful communication about luxury products depends on a close connection to the feeling of exclusivity, either through the choice of media — prestigious or elitist — or the content of the message — these are becoming more and more metaphorical, linked to imagination and emotion more than reason.

In this chapter we assess how a product’s distribution helps it position itself as a luxury, we also observe where products are found in the country and, more specifically, which cities lead the market.

In this chapter we present a panorama of the cities with the highest potential for the luxury market. We will show the reason for their potential and the attitude of these cities towards their infrastructure and the population’s standard of living. An assessment of the wealth of these cities will clarify their relationship with luxury. In the cases of São Paulo, Rio de Janeiro and Brasília we will look at both the present and the future.

In this chapter we will assess the obstacles facing luxury products that want to get established in this country. They might be diminishing but they still make Brazil less competitive when compared to other developing countries.

This chapter discusses contemporary luxury and Brazilian market trends. Higher authorities in this segment dictate the style of this new luxury: European countries, followed by democratic regimes around the world. This new luxury relies more on the senses, based on pleasure and well-being and is not ostentatious. It explores feelings rather than appearances. This remodelling of luxury aims to stop inequality from being externalized by ostentation when wearing or using luxury articles, so as to suit the global democracy.

This chapter evaluates the increase in worldwide respect for the Brazilian luxury market by examining the most celebrated Brazilian enterprises in each sector. Understanding the direction taken by these companies will reveal the secrets of success in the luxury segments. In fashion, the celebrated enterprise is Daslu; in aviation, it is Embraer; in hotels, Fasano Hotel; in jewellery, H. Stern; in the marine segment, Schaefer; in health services, Albert Einstein Hospital; and in the financial segment we survey Safra Bank.

This chapter assesses Brazil’s future in the light of recent developments, which have caused much excitement over Brazilian trade; the question is, however, is this just a temporary condition or are there solid prospects for the future of the national market? To answer this question, we will examine general data on the country as well as on opportunities in the luxury market. These opportunities are expected to reflect a new awareness of the environment and the issue of sustainability. Therefore, we will also take a look at what companies are doing to satisfy this issue.

This chapter focuses on how to administer a business in the luxury market. Issues range from partnerships to establish a business in the country, through the internal functioning of a company, to hiring the right kind of staff. These are essential to start up and develop a company in the luxury segment. We will also look at existing luxury companies.

The luxury market in Brazil is still at an embryonic stage. It is happening and it is being shaped now. It should not be compared to the luxury market in European countries or in the United States, which are at a well-advanced phase. Brazilians and Chinese alike, as well as Indians and Russians have not yet developed a culture towards luxury and they still buy luxury items to gain social position; therefore a logo is very important.