brazil report 2007

Urbanrural split of total population 1999 2004 2009f

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Unformatted text preview: population 1999 2004 2009(f) Urban 80.5 83.5 86.1 Rural 19.5 16.5 13.9 Source: EIU, July 2006 INCOME/BUyING POWER Rising incomes Income per capita in Brazil has increased during the past years and is expected to continue to grow in the medium term, as a result of the expected economic growth. Population Distribution by Area and GDP Region GDP per capita (BRL) North 4,939 Northeast 3,694 Southeast 10,086 South 9,157 Centrewest 8,166 Total average 7,704 Source: Instituto Brasileiro de Geografia e Estatística 2002/ no updated information available GDP per capita varies from BRL3,694 in the Northeast to BRL10,086 in the Southeast. Purchasing power is also expected to grow as a consequence of the decrease in the interest rates and of credit expansion – the latter, as a result of partnerships among financial institutions and the main retail players. Income concentration is still a challenge for the Brazilian governments. Data from the World Bank point to a decline in the Brazilian income inequality and poverty levels from 1993 to 2004. 8 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil A growing middle class According to research conducted by Instituto Target/FGV, in the next 5 years the Brazilian middle class is expected to grow its share in the consumer market by 5.6 points, from 60.8-66.4% of the total consumption. For this research, middle class is defined as having household/family income between BRL2,230 and BRL3,750 per month, in addition to other characteristics such as level of education, consumption pattern, occupation, etc. The number of urban households among middle class is expected to increase by 7.9% over 2005 (which amounts to 2.04 million units). CONSUMER BEHAVIOUR No coherent consumption pattern Despite the fact that 80% of the Brazilians live in urban areas, this apparent uniformity does not reflect homogenous consumption habits. As mentioned before, as a result of a historical inequality in income distribution, different classes of consumers are encountered in the Brazilian consumer market, like for instance, the typical basic needs patterns in lower income classes, where household spending is higher on food and beverage items, or the ascendant middle class pattern that normally shows an increase in the participation of expenditure in transport and communications. Upper classes reveal an increase in the share of goods and services, like durable goods, leisure activities, education and healthcare, and expenditure with luxury items. The main retail and consumer players currently target each of these groups in the Brazilian consumer market, as long as they are sizeable and have a significant consumption potential likely to grow both in volume and value. Composition of average household expenditure: 1999 vs. 2005 1999 5% 7% 2005 18% 5% 11% 8% 15% 12% 6% 18% 22% 7% 17% 20% 6% 9% Food, beverages & tobacco Clothing & footwear Housing & household fuels Household goods & services Health Source: EIU, July 2006 6% 8% Transport & communications Leisure & education Hotels & restaurants Other goods and services 9 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil Consumer behaviour has ceased being stable since globalisation, communication and internet have played an important role in consumer habits. In Brazil, trends connected with the principle...
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This document was uploaded on 02/14/2014 for the course MBA MBA at SPSU.

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