imrs country presentation - brazil (group 8)

8/10/2019 IMRS Country Presentation - Brazil (Group 8)

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BEM-VINDO AO BRASIL

FEDERATIVE REPUBLIC OF BRAZIL : COUNTRY OVERVIEW

Geographic

Largest LA, 5thLargest Worldwide

84.35% Urban Population (IGBE)

MMA: So Paulo, Rio de Janeiro, Belo

Horizonte

Socio-Political

199.321 M, 5th populated worldwide

Largest Latin American Democracy

Leading Regional Power, Emerging

Global Power

Cultural

Portuguese-African ethnic majority

Cultural hotspot; Carnaval, WC14, SO16

Tourist hotspot: 5 M Visitors in 2010

Cultural Exports: Cuisine, Art, Literature, Cinema

Economic

7thLargest World Economy w.r.t GDP, PPP (World Bank, 2013)

Current Per Capita GDP $11,875 (IMF, 2012)

Leading GRDI Index for 3 consecutive years (AT Kearney, 2013)

Member of the rapidly developing BRIC Group

Mixed economy with abundant natural resources

Key Industries: Agricultural, Mining, Manufacturing, Service Sector

Major Exports: Aircraft, Electrical Equipment, Textiles, Footwear, Coffee

Largest regional skilled labor force, 107 M (Thomas White, 2013)

Stable economic growth, low inflation rate, strong economic reform policy

Credit favoring customers (AT Kearney, 2011)Upcoming Events expected to reverse GDP growth slowdown (World Bank, 2013)


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MARKET FAVORABILITY ANALYSIS

PPrivatization oriented economic policyunder Dilma Rouseff (Bloomberg, 2012)

Heavier corporate taxation; 34%

(Canon, 2011)

Free Trade within Mercosur, CommonMarket of the South

SRise of entrepreneurial, cash rich

Middle Class (Thomas White, 2013)

Strong social welfare schemes leading

to declining poverty rate

Relatively high National Minimum

Wage, 41.8% of GDP PC (WDID, 2013)

EStable GDP Growth rate (2.2%),reversing slowdown (World Bank, 2013)

Relatively low inflation rate (5.9%),

Conditional Cash Transfer Program

Flexible exchange rate policy, stablecurrency (Economonitor, 2013)

TStrong IT infrastructure, LA leader,

Government supported advancement,

Innovation Law (Etzkowitz, 2005)

$245.5 M organized investment in R&D

facilities by GE (Bloomberg, 2012)

ECleanest Energy Matrix among LA

Countries (Renewable Energy world,

2011)

Growing shift towards sustainable

manufacturing practices , GM pioneering

(Deloitte)

LLiberal FDI Regulatory Law (Economy

Watch, 2008)

Free trade agreement with EU, BRICnations

Stringent Consumer Protection Code ,

Minimum Wage Laws (The Brazilian

Business, 2011)

Establishment of new Brazilian

Competition Law (Mondaq, 2012)


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MANUFACTURING COMPETENCE

Most important industry, constitutes for 1/5 National GDP

Leading Latin American manufacturing country in terms of aircraft, heavy machinery &

textiles

Major producer of textiles, clothing, and footwear since early 19th century

Chief Exports: Manufactures, iron ore, soybeans, footwear, coffee

Chief Imports: Machinery and equipment, chemical products, oil, electricity

2014 WC & 2016 Olympics expected to accelerate infrastructure improvements &subsequently manufacturing competence


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ORGANIZED RETAIL SECTOR

$ 230 M Organized Retail Industry (Thomas White, 2013)

7% YOY growth for Apparel Industry since 2009 (AT Kearney, 2013)

Among 10 most engaged e-commerce markets worldwide (comScore MMX)

Exponential rise in Luxury retail sector with increased PPP & growing urban middle class

Popular retail formats - supermarkets, convenience stores, discount stores & online

Liberal economic policy, largest retail investment amongst Latin American countries

Ongoing economic relations with EU, 50% of FDI investment in the country

2014 Football World Cup and 2016 Summer Olympics major drivers for increase in travel

related retail


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FASHION RETAIL SCENARIO

Brazils apparel market: large, growing & mostly untapped by multinational competitors

Local brands dominate in Brazil the worlds fifth largest apparel marketplace

Po de Acar, Lojas Americanas, Casas Bahia, Ponto Frio, Extra, Renner, Hering; local

brands now at par with international brands in the country w.r.t sales figures

International brand presence: Mango, Zara (1999), C&A, Topshop in High street,

LV, Hermes, Lanvin, Prada, Balmain, Gucci, Burberry in luxury

Mode of entry: Mainly JVs. Leading players JHSF Group, JK Iguatemi & Cidade Jardim

Challenges for global players: differing product demands, strong preference for local

fashions, fluctuating interest rates & high cost of imports


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jhsf group

EMILIO PUCCI HERMSJIMMY CHOO REDVALENTINO VALENTINO


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MARKET PENETRATION: OPINION LEADERS

Designer: Lorenzo Merlino, first Brazilian

to showcase in Paris

Designer: Alexandre Herchocovitch,

known for avant-garde designs , electric

prints, trademark skulls

Music Artist: Sergio Mendes, Funk & Jazz

with bossa nova

Artist/Photographer: Vik Muniz, art

history, pop culture, unexpected everydayobjects

Football Player: Ronaldinho, Pele, cultural

icons

Model: Gisele Bundchen , international

supermodel, Victorias Secret Angel

Model: Adriana Lima, International

model /actress, Victorias Secret Angel

Performer: Luma de Oliveira, former

model, actress & carnival queen

Retail: Finta (F.1987), iconic sportswear

brand, football wardrobe sponsor

Retail: Colcci (F.1986), premium clothing

label with presence in US, UK, Italy,

France & Spain


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BRAZILIAN RETAIL INDUSTRY: FUTURE POTENTIAL

OWider economic reforms towards

completely open economy for Global

Power status

Projections of surpassing China in thepresent decade, 5thlargest global

economy

Pre Salt development (6th major oil

reserve) infra-structure investment

Strengthening e-commerce, franchisee

model, 19.5% & 93.1 M in past decade

WC14 & Summer Olympics 2016

SPositive Economic Scenario, Low Risk

6thHighest GDP, 54thhighest PCI

Supporting tax rebates, industry incentives

& low interest rates

Strong domestic market, growing middle

class

Substantial credit equity, sustainable

growth rates

Rich in natural resources, leading textile

exporter

TGlobal Slowdown & Economic Recession

Low pace of reforms

Bottleneck economic growth, stagnation

in GDP growth

China dependency for imports/exports

WEmpire of laws / Heavy Bureaucracy

Corruption due to tax & legal system

Regional inequalities

Structural barriers to growth


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REFERENCES

AT Kearny Global Retail Development Index (2013)

http://www.atkearney.com/consumer-products-retail/global-retail-development-

index/full-report/-/asset_publisher/oPFrGkbIkz0Q/content/2013-global-retail-

development-index/10192

IBGEhttp://www.ibge.gov.br/english/

Jornal do Brasil / Info Money

Trading Economics http://www.tradingeconomics.com/brazil/indicators

Thomas White http://www.thomaswhite.com/global-perspectives/retail-sector-in-brazil-

riding-the-wave-of-middle-class-growth-and-consumer-credit-boom/

Euromonitor http://www.euromonitor.com/retailing-in-brazil/report

Interbrandhttp://www.interbrand.com/en/BestRetailBrands/2013/country-

overviews/riding-a-wave-of-prosperity.aspx

imrs country presentation - brazil (group 8)

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