Amidst the gloom, some foreign companies are perceiving opportunities in the retail, digital economy, and hospitality sectors.
Brazil: Retail growth despite macroeconomic struggles
2015 Global Retail Development Index (A.T. Kearney)
The global consultancy dropped Brazil three slots in its annual index of top retail markets among developing economies but still ranks it among the top eight. It notes:
Even as its GDP growth stagnated, inflation jumped, and consumer confidence sank in 2014, retail sales in Brazil (8th) grew a modest 2.2 percent as unemployment remained low and wages maintained positive (yet slower) growth. Pharma and beauty experienced the strongest growth (9 percent of sales) despite the economic challenges….
… Premium brands remain attracted to Brazil, particularly in São Paulo and Rio de Janeiro, where the share of wealthier consumers has increased in recent years. Shopping malls such as JK Iguatemi and Shopping Cidade Jardim and famous streets such as Oscar Freire in São Paulo have seen an increasing concentration of premium brands in recent years, including Bottega Veneta, Burberry, Carolina Herrera, Chanel, Goyard, Bulgari, and Tod’s.
International food chains are also opening their doors in Brazil. Johnny Rockets, P.F. Chang’s, Olive Garden, Red Lobster, Jamie’s Italian, Ben & Jerry’s, and Lindt all opened franchises in Brazil’s major economic centers.
As Brazilian Economy Descends Into Crisis, Tech Is Growing Double Digits
TechCrunch.com, September 27, 2015
Despite a miserable macro-economic mix of circumstances, including the worst recession in almost 100 years, the biggest corruption scandal Brazil has ever seen, and calls for President Dilma Rousseff’s impeachment, Brazil’s tech industry is thriving.
Although only half of Brazil’s population is online, it’s already the fifth largest internet and mobile economy in the world, a top five market for Facebook, Google and Twitter, and one of the fastest-growing smartphone markets globally — with another 100 million people starting to come online.
Fandango Buys Brazil’s Top Online Ticketer Ingresso
The Hollywood Reporter, September 25, 2015
The largest market in South America, Brazil accounted for 40 percent of the Latin American box office last year, according to Rentrak, and has seen nine continuous years of box-office growth. MPAA predictions put Brazil as the world’s fifth largest market by the end of 2020.
Tremor Video Launches in Brazil
MarketWatch, October 6, 2015
“According to comScore, Brazilian video consumption exceeds the average time spent and overall penetration among the digital population of all Latin American countries. At the end of 2014, they reported Brazil had 65.5 million unique online video viewers over the age of 6, equal to 86.5% of internet users in the country which was the highest penetration rate of any market they study.”
Global hospitality insights: top thoughts for 2015
“Despite economic challenges, such as high inflation rates, worsening unemployment and currency devaluation, as well as political instability, development and acquisition activity has been prevalent. South America now has 400 hotels in the pipeline, totaling 65,479 rooms, of which 40,000 are in Brazil thanks to its surge in corporate and leisure travel, as well as steady increases in its hotel operating metrics. By comparison, the region had 305 hotels in development in December 2013, totaling 49,054 rooms.”
Marriott to triple Brazil hotels on hopes of short-lived recession
Reuters, October 6, 2015
Marriott International Inc. plans to almost triple the number of its hotels in Brazil, in a bet that the nation’s worst recession in a quarter century will be short-lived.
Marriott’s president for Latin America and the Caribbean: “We did extensive research in Brazil to understand what the market opportunities were and that’s why you see us building three-star and four-star hotels.” According to him, the company plans to focus on a group of 16 Brazilian cities with more than 1 million inhabitants each, all having recently gained international airports with direct flights to Europe and the U.S.
Hilton Taking Advantage of Brazil’s Weaker Economy to Expand
Skift, September 29, 2015
“Hilton Worldwide Holdings Inc. plans to expand ‘quickly’ in Brazil as the slumping real and lower costs present opportunities for the construction of new hotels and tie-ups with local operators, a company official said.”
Curated by Caroline Chen, Geoskope Junior Associate for Brazil