Brazil’s Next Generation of Wealth, Lorre White

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

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 capitalized. 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 richest 165,000 individuals increased their total wealth by 3.7% to just over $4 trillion last year. 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.

“ Brazil’s richest 165,000 individuals increased their total wealth by 3.7% to just over $4 trillion in 2012 ”

Louis Vuitton has built its portfolio to five points of sale in Brazil (São Paulo, Rio and Brasilia), as Ferrari has established a dealership in São Paulo. Each year, since 2009, Ledbury Research has tracked the retail movements of Cartier, Tiffany, Bulgari, LV, Burberry, Gucci, Ralph Lauren, Armani and Chanel. In 2009 they had a total of 13 stores within the country, which has increased to 21 stores in 2012.

A new generation of young entrepreneurs are leading Brazil’s wealth revolution. In the latest release of its Wealth Segment report series, Ledbury 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.

Each Wealth Segment report is based on Ledbury Research’s considerable experience interviewing the wealthy population in Brazil, alongside in-depth interviews with Wealth Experts.

These Experts are individuals whose professional lives involve interacting with high net worth individuals on a daily basis. Their backgrounds are deliberately various, spanning the worlds of luxury goods, wealth management, high-end property, hotels and restaurants, premium autos, and others.

“ Despite their level of wealth, they are incredibly low-key in displaying it ”

Discerning Dynasts
Discerning Dynasts are blue-blooded individuals who have grown up with and around wealth. Despite their level of wealth, they are incredibly low-key in displaying it. Accordingly, they prefer to shop abroad because it is less expensive.

They also prefer to be at places that have a private environment and they go to these places with a small, select group of friends, or entertain them at home. Their social circle is very tight-knit and difficult to penetrate.

Boom Benefactors
Boom Benefactors are men who have made their fortunes on the back of Brazil’s rapid economic growth over the past 5-8 years. They are successful because they were in the right place at the right time, but also because they work hard.

Money and luxury is a relatively new phenomenon for them and they focus on using it for indulgence, and to feel a sense of belonging. As they want to be known by society, they show off with branded clothing and loud pieces of jewellery.

Independent Leaders
Independent Leaders are the youngest wealth segment in Brazil. They are well educated and have international mindsets. Their careers started when they were 21 years old, straight after university.

They are very hardworking, and view money as a symbol of independence, as well as a gateway to material indulgence. They are mostly single however, some will be recently married with no children.

by Sophie Doran

BONUS FEATURE: Engaging High Net Worth Individuals in Indonesia: Leading Marketers Address Key Challenges in Luxury Marketing

Old rules no longer apply as luxury consumers and preferences change. The rich in Indonesia are becoming even more elusive as their tastes and preferences are advancing fast with sophistication.

Their increasingly transient nature as consumers are also giving international luxury brands a difficult time.

Those looking to target luxury consumers in Indonesia have to come up with new marketing tactics that will work for this unique market. Ms Rosmalia Hardman, Director of Sales & Marketing, Keraton at the Plaza says that “Luxury is no longer about status symbol, the needs and expectations of the high net worth (HNW) individuals have evolved. Companies need to understand the individual aspirations of their high net worth customers and create brands that will stir their emotions.”

To effectively reach out to this privileged group of consumers, there are a number of strategies luxury marketers should consider – positioning themselves in the minds of the rich, creating unique experiences around their products and services, and developing brand loyalty among their consumers. “We see the use of compelling stories, messaging through special themes that tap into the individual’s aspirations. Special events and private parties are lavishly themed to create exclusivity, elegance and style – the key essence that will draw the attention of Indonesia’s HNWI,” adds Hardman. International brands realise that marketing to high-net-worth consumers in Indonesia is entirely different from their overseas operations.

To equip luxury marketing professionals with effective strategies to make their brands relevant to Indonesia’s wealthy, Pacific Conferences is organising a 2-day conference dubbed as Luxury Marketing in Indonesia, to be held on 26-27 September 2013 at the InterContinental Jakarta Midplaza during which case studies and insights on luxury brand positioning, building customer loyalty, service excellence, experiential marketing, strategic brand partnership and more will be shared.

Experts who will be sharing include Daniel Balmer from Rolls-Royce Motor Cars, Chris Neff from Swarovski Singapore, Jonas Wulff Moller from Bang & Olufsen, Rosmalia Hardman from Starwood Hotels, Mukiat Sutikno from Hyundai and Antoine Villette from Tauzia Hotel Management among many others.

Participants will learn from the case-studies of Rolls-Royce, Swarovski, Bang & Olufsen, Starwood Hotels, Hyundai and Tauzia Hotel Management among others, on how to create differentiated luxurious experiences and establish meaningful brand distinction in the burgeoning market.

Conference Details:
Luxury Marketing in Indonesia Conference
September 26-27 2013
InterContinental Jakarta Midplaza, Indonesia
Organizer: Pacific Conferences

Thanks to WOMAN of ACTION™ – Lorre White