Sunday, 30 May 2010

Retailing in Brazil

People tend to get a bit sleepy after lunch, but this really was a lame excuse to miss out on learning about one of the most exciting countries in the world.
The afternoon slot of this week’s Walpole seminar was dedicated to making your mark in Brazil, a country that could potentially offer new opportunities for UK brands and retailers, but for whatever reason (laziness? being too busy?) the room half emptied.
No wonder people tend to get surprised when they learn something new about Brazil, says Martin Raven, former director of UK trade and investment in Brazil, who was among the panel members at the seminar. He said the presence of British companies was “depressingly low” in Brazil.
So it’s the ones that are brave – and just wise enough to see the wealth of opportunities in Brazil – that will prosper, notably the likes of Topshop, according to both Raven and Carlos Ferreirinha, a brand consultant and fellow panel member. Only two weeks ago, Topshop opened its first store in the Brazilian capital of Brasilia and the chain is understood to be looking for a site in São Paulo.
John Smedley, the British knitwear brand, is also keen to seize the opportunities in Brazil, having set up a meeting with Ferreirinha to discuss the plan of attack. Ferreirinha’s advice to John Smedley, and in fact to any heritage brand looking to enter the Brazilian market, is to make that heritage known. “Because British investment in Brazil is so weak, the population isn’t as aware of British brands as they could be,” said Ferreirinha. “But Brazilians like a story, so if you’ve been in business for 225 years like John Smedley, tell Brazil about it – it’s about as long as Brazil has existed!”
You only have to look at the success of other European brands to see that the Brazilian market is there for the taking. Ferreirinha said that Gucci, which opened a store in Brazil one and a half years ago, had its best ever sales per square metre in the São Paulo store last month.
But you have to understand the market and go with the Brazilian way of selling goods. If a Brazilian wants a Hèrmes bag, she’ll pay for it in instalments, not outright. That in itself shows the breadth of the consumer that brands can target in Brazil. “Tiffany refused to sell by instalments for two years, but now they’re doing it. You need to adjust to the domestic market,” said Ferreirinha. “And we don’t sell luxury brands to foreigners – we sell to local customers.”
Lots of “experts” claim that it’s the growth of the middle class consumer that is fuelling consumer spend in Brazil. I’m sure they’re right, but what Raven had to say about people being ignorant about Brazil plays a role here too. Brazilians have always loved shopping – I remember from when I was growing up there some 20 years ago. They’ve also always known the English word “shopping” – that’s what they call shopping malls. And Brazilians aren’t embarrassed by conspicuous consumption.
But what worries me – and however idealistic this might sound – is that I’d hate for cities like São Paulo and Rio to look like London or New York or Hong Kong, with identikit shops, products and aspirations. What struck me most from my recent trip to the south of Brazil, including Rio, is that it looks like nowhere else in the world. Some parts of Santos hadn’t changed at all and those that had, had done so according to a Brazilian set of values. In Rio, the streets are a mish mash of Brazilian designer stores, markets, bookstores, shopping malls and cafés, the latter looking the same as those in Santos did – and still do – 20 years ago.
It’s the responsibility of people like Ferreirinha to make sure that Brazil balances commerciality with what makes it so unique.

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