• Need to Understand Consumers to Make Inroads into Brazilian Market
    2018-09-17 hit 743

    Need to Understand Consumers to Make Inroads into Brazilian Market


    -    KITA analyzed Brazilian consumer market need to identify consumption patterns depending on income-levels- 


    The Korea International Trade Association (KITA) has suggested a high-value-added premium products for the high-income class, education, tourism and leisure products for the middle-income class and daily necessities and durable goods for the low-income class respectively, as the market strategies for the Brazilian consumer market with a population of 210 million.


    According to the report titled "Brazil’s Consumer Market Analyzed Based on Consumer Composition" issued by the Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association, Brazil, which has the largest consumer market in Latin America, has recovered from recession since last year and is showing signs of recovery and has a high growth potential for the future. Under the circumstance that Korea’s foreign trade needs to reduce its dependency on the United States and China, Brazil is a promising alternative market. 


    In terms of Brazilian consumers, the C-class (income level 100 ~ 150% of the average), which corresponds to the middle class in the social class, is rapidly growing. People in this class have the high level of discretionary expenditure on non-necessities and various consumer durables, education, and tourism-related products are the main beneficiaries. In particular, the emerging middle class, which is newly included in the middle class by getting out of the low-income class, is seeking ways to differentiate itself from the low-income class and increase their consumption of comfort, leisure and relaxation.


    In terms of population size, the E-Class (income level lower than 50% of the average), the lowest-income class, is overwhelmingly large, accounting for 39.7 percent of the total population. Although their individual purchasing power is low, the related market is expected to grow thanks to the improved infrastructure such as electricity and water, increased education opportunities, more mobile phones, and increased disposable income. On the contrary, the A-Class (income level more than 200% of the average), the highest income group, has small population proportion taking up only 8 percent, but the number of population is 14.14 million and they are leading the Brazilian consumer market. In Brazil, it is important to focus on high value-added products, since there are many cases where local sales prices are higher than export prices due to its complicated tax systems.


    The shapes of households are diversified due to the changes in lifestyle. In recent years, the number of single-person households with high purchasing power has increased rapidly, the number of parents without a child and the number of single-parent households is expanding. Thus, it is expected that demand for small furniture, home appliances, simple meals, pet supplies, and leisure goods will increase. 


    Yoo Seung-jin, a researcher at the Institute for International Trade, said Since there is ‘brazil cost’ referring to Brazil’s high tax rate, bureaucracy and complicated labor management and logistics, Korean companies need to careful when it comes to market segmentation, customer targeting, and selection of entry areas." The researcher also advised, "The Brazilian economy is recovering, but there are always risks from both inside and outside the country, such as exchange rate fluctuations and uncertainty over the presidential election in the second half of the year, so we need to continuously monitor and respond to the market."

    < Characteristics of Major Social Classes >

    Social class

    Income level ( Compared to Average)

    Features and Consumption Behavior

    Promising Areas


    Over 200%

    The proportion is small, but it has 14.14 million people.

    Important group for exporters, considering Brazil's high import prices due to a complicated tax system.

    They continue their active consumption activities even in the economic downturn. Their consumption will be stronger as the economy is getting better.

    Education, communication, transportation,

    Premium consumer goods, etc.



    Record the fastest growth

    Segments of 20s and 30s are bigger than other segments

    The emerging middle class seeks to identify their social status through consumption and to differentiate themselves from the low-income class

    Furniture, home appliances, education, tourism, leisure etc.


    Less than 50%

    It reaches 39.7% of the total population

    Individual purchasing power is low but overall market size is large

    Disposable income growth is expected to be the fastest

    Difficulties in distribution channel

    Low-cost necessities, food and beverage, housing, clothing / footwear, household appliances, etc.







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