The Rise of C-Class in Brazil: Impacts and Opportunities for the Country
After the 2015 slump, the time has come for the Brazilian economy to breathe new sighs of relief, with more optimistic prospects for the coming years. As the market finds its path to recovery, check out the opportunities for businesses willing to invest in the country
This article was originally written in Portuguese. To read the original version, click here.
In 2015, data released by the Brazilian Institute of Geography and Statistics (IBGE, acronym in Portuguese), pointed to a time of recession and shrinkage of the country’s economy. The good news is that a lot has changed since then.
According to a survey disclosed by research institute Locomotiva, the C-Class – formerly known as the “new middle class” – has grown again from 2017 to 2018. The study shows an increment of 1% of the population, which rose from 50% to 51% in the period.
This percentage accounts for more than 2 million people having climbed steps up the social ladder. Overall, 106 million Brazilians belong to the middle class.
In addition, with their rising income, it is estimated that this population will have earned a total of BRL 1.57 trillion by the end of 2019. That is, money that can be allocated to investments and/or more leisure options for these Brazilians.
But there is an important caveat: if, before the 2015 decline, the C-Class was only aimed at flaunting consumption, now they demand more cost-effective shopping experiences.
Providing quality allied to fair prices is the secret for companies seeking to stand out among this public and increase revenue.
Concrete impacts over the market
Have you noticed how people are pickier when it comes to buying? In addition to spending more cautiously, before closing purchase deals, the C-Class has now as a strong ally the wide range of content the Internet offers about products and services.
According to Google, as early as 2015, the C-Class C accounted for 54% of Brazilians with Internet access. Among them, 81% of users had a habit of searching for information on different platforms before buying products. Today, as technology evolved, this number is even higher.
The first point is that the increase in income among Brazilians causes the economy wheel to turn.
The second point to keep in mind is that these more conscious consumers require companies to offer quality deliveries, competitive prices and the most popular payment methods in Brazil. As an example, offering installments is one of the best solutions for C-Class Brazilians consumers. Installments are so important because it allows Brazilians to increase their purchase power. With this method, they can buy more, having the total amount splitted in monthly portions, that’s why they love it so much.
Learn more about installments with these two articles:
- Why do Brazilians Love to Pay with Installments? Here Is the Full Story
- How an Installments Payment Strategy Helped LightInTheBox to Increase Sales in Brazil
The major players in the beauty and aesthetics industry are good examples of companies that stand out among C-Class consumers. Brands give away free gifts over pre-defined price points, among other benefits.
Even companies that focused solely on the A and B publics have begun to open their doors and become more accessible to the C-Class. It is a way for these brands to expand and further increase domestic sales.
As noted by Flávia Bittencourt, who is the general director of Sephora Brazil and senior vice president for Latin America, in an interview with magazine Meio e Mensagem:
“Our ultimate goal is to attract customers who still do not buy prestige, but only national brands, because they somehow feel afraid to buy international products. To show them what’s accessible. Our products’ entry price is BRL 10. It fits any pocket. And for more expensive products, we offer payment plans of up to 6 or 10 installments”.
An expert’s opinion
To learn more about the current moment of the market, we invited advertiser and professor, Anne Matoso, from Curitiba, for an interview. She has worked for more than 15 years with communication strategies and has researched different types of scenarios and audiences.
What are the opportunities arising for companies as the C-Class expands?
The C-Class has expanded and even in a period of recession they keep consuming services and products they didn’t used to as frequently 10 years ago. Beauty services, eating out, going to the movies are some examples.
The C-Class is still highly dependent on banks and financing conditions, which may be an opportunity for business selling durable goods or for higher value-added brands, provided they offer facilitated payment conditions.
According to the research conducted by Locomotiva, the C-Class has learned to be more conscious when it comes to buying. What strategies do you believe companies can address to gain these consumers’ attention?
A dominant feature of the C-Class is not allowing themselves to make mistakes when it comes to purchasing. So they tend to choose solid brands with strong references when they decide to acquire goods and services.
They can’t just go ahead and invest in another good if they don’t like their initial buy, so purchases are more researched, more conscious and if there is a decision to buy, they seek higher quality and indication of origin, with less room for impulse purchases.
How can your working market take advantage of this current moment of the economy?
It has always been easier for large brands to implement communication strategies, as this used to require a high investment. With the rise of the C-Class and the strength of digital strategies, the advertising market has been witnessing not only new brands, but smaller companies investing and being able to turn their businesses into profitable companies.
In addition, niche strategies specifically designed for the C-Class have emerged. Previously, brands saw this audience as a less important portion of their communication strategies – nowadays, not anymore.
As they are the bulk of the population, brands begin to prioritize the C-Class in their strategies. Communication agencies, research institutes and professionals able to monetize the strategy of advertisers, specifically in this niche, are now available.
In a nutshell: Brazil and it’s new opportunities
A few weeks ago, the International Monetary Fund (IMF) released the World Economic Outlook, in which it discloses Brazil’s growth projection.
Numbers are now higher than market expectations, but slightly lower than the first estimate, released shortly after last year’s elections when Bolsonaro won Presidency.
According to newspaper Valor Econômico, Brazil’s growth projection for 2019 went from 2.5% to 2.1%. But the estimate for 2020 has been raised, from 2.2% to 2.5%.
It turns out that Brazil is, in fact, expanding. However, not at such a rapid pace.
The country is improving, the economy is steady and Brazilians are starting to buy more, albeit more cautiously.
That’s why the rise of the C-Class represents such a great opportunity for businesses willing to invest in the country.