The Luxury Market in Brazil

Market Opportunities and Potential

C. Diniz

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN:
  9781137432544
• eBook ISBN:
  9781137432568
• Topic: Business
• Subtopic: International Business
• Index: Business

The Luxury Market in Brazil provides a holistic and practitioners approach to luxury marketing in Brazil. The book analyses the key challenges and opportunities facing luxury brands, while providing an insight into the skills and competencies to develop and implement effective luxury marketing strategies that are specific to the market in question.

1

The Universe of Luxury

This chapter will reveal how the universe of luxury arose, its essence, its importance, how personal experiences thoughout history and from different cultures relate to it and how it developed in Brazil. It is a trip that needs to be taken to understand the concept of luxury and how that informs one’s reactions to it.

Luxury is a response to the need for a social class to distinguish itself. Easily visualized if we think about royalty, on top of the social pyramid and with limitless power to govern, needing to distinguish itself by using products that emphasized its potency through symbols, shiny objects, weight and uniqueness. So royalty met this ‘demand’ to demonstrate superiority over its subjects by using crowns, coats of arms, rings and other adornments considered exclusive to kings and queens. These products were not used or worn by those outside this class to identify an elite status because of their particular significance, even in the case of clothing made from special materials and in rare colours of limited availability.

However, even those products did not defy local culture. For instance, in India, where a cow is considered sacred, using that animal’s hide to decorate one’s house would not happen. Thus, it is correct to state that luxury products reflect not only the history and wealth of a people, but also its cultural traditions.

Luxury has long been a measure of the wealth of a social class or even a nation, and the production and sale of luxury goods is not carried out without, at the very least, the prospect of consumption. A luxury article should create feelings of desire and admiration for its owner from his or her peers, such that simply displaying an article suggests luxury. This leads to the fact that the value of a luxury article is not in its usefulness (since of itself it is superfluous) but in the feelings it arouses in the consumer and in its attributes of beauty and fantasy. The desire for ownership is stronger than the desire for the object itself. However, bear in mind that the said article is made by craftsmen using rare raw materials, craftsmen who create tailored and exclusive products that only a privileged few can afford, and whose label must demonstrate it to be a member of a class above all other classes. The same applies to luxury services, whose personalization makes it exclusive. All this contributes to the overall value of a luxury product or service.

1.1 Defining luxury

Luxury is the opposite of vulgarity.

– Coco Chanel

In the olden days, the wealthy had to wear jewels and live in mansions to be differentiated from other social classes. That need no longer exists – or is about to disappear.

The rich display luxury in a more reserved fashion. In the United States, a millionaire will show his wealth by being a philanthropist and having his or her name linked to foundations, as does Bill Gates. Contemporary luxury is not fueled by the longing to instill envy or to be known by others, but by the desire to admire oneself, to be delighted by oneself. That narcissistic dimension has become dominant and is changing the concept of luxury.

– Gilles Lipovetsky

There are two kinds of luxury: traditional and contemporary. Traditional indicates a rare, exclusive service or product that is available to very few people, and whose label is a sign of reliability. This kind of luxury has an objective character, as it is related to materialism and to all that money can buy, therefore conferring status on those who acquire it. Contemporary luxury, on the other hand, has a subjective aspect to it (rarity, exclusivity and difficulty to obtain), which sets off an emotional discharge, originating in the human need for personal significance, which in turn is based on ‘not having’ what is needed, as opposed to traditional luxury which comes from ‘having’. The Italian sociologist Domenico de Masi classifies contemporary luxury into five elements, in the following order of importance: time, autonomy, silence, beauty and space.

Time is spent on the labour to [build/create] a saleable product, but to enhance it with professional specialization even more time, often outside working hours, needs to be invested. As days become shorter and one’s daily duties become more and more hectic, personal needs can start to pressurize: When will there be time for the family? Or to be with the ones we love? Where is the time for personal projects? Time for relaxing, for mere idleness, or just to enjoy nature? There is too much time needed and too little time available, meaning time to fulfil one’s many needs has become more and more scarce, a luxury.

To see autonomy as a luxury item we must first agree that we are swamped by routine and work, on weekdays and even on weekends. Then, one begins to long for a chance to simply do what we want. That requires autonomy, which depends on the luxury of time. Then we have the difficult task of asking, ‘What is it that I wish to do today?’ and the even more demanding task of answering.

The luxury of silence is a selfish wish for well-being, which means having time for oneself. This is harder and harder to achieve for those at work, at home or even out and about as cities become ever-more crowded and noisy.

The luxury of beauty can be seen as the recovery, or correction, of the effects of stress, either as a permanent improvement or as a one-off for special occasions.

Finally, the luxury of space is related to the growth in population which increases the demand for, and price of, land. The cost of each square metre in particular neighbourhoods keeps rising due to the lack of building space, which makes it ever-more difficult to afford one’s own home.

It is worth noting that contemporary luxury has created a new notion of ‘luxury’, that of leading of a better and longer life focused on the present, no longer concerned with appearances or social class but with personal significance, where moments and sensations are becoming a rare commodity.

In times of globalization, contemporary luxury is increasingly evident and traditional luxury, although it will not cease to exist, will need to share space with this new luxury, emotion (experience).

Table 1.1 A comparison of traditional luxury with contemporary luxury

Europe has already made the transition from traditional to contemporary luxury. Some people have noticed this transformation in Brazil, but since its luxury market has only existed for 22 years it is still maturing and is far behind Europe. We must also analyse the difference in behaviour towards luxury between São Paulo – where the nation’s luxury market is more mature – and the rest of Brazil – where what starts in São Paulo then reaches other cities (Rio de Janeiro, Brasilia, Curitiba, Recife and Belo Horizonte).

1.2 What does luxury mean for Brazilians?

The concept of luxury varies from one person to another. Something important, rare or special to one person may not be so for another. This section attempts to explore and evaluate ‘luxury’, using a range of definitions offered by Brazilian celebrities who experience luxury:

Simplicity ... is the best and greatest luxury in life! To be simple in any circumstance, while, of course, drinking coffee in a coffee cup et champagne dans une tasse a Champagne! Tout simplement.

Bethy Lagardere – entrepreneur

Luxury to me is tranquillity; however, when we mention luxury we usually think of products, so in that case it is a combination of three things: savoir-faire, tradition, rareté! Knowledge, tradition and exclusivity.

Dimitri Mussard – heirs to Hermès (Dimitri lives in Brazil)

What does luxury mean to me? It means being able to take a stroll in open spaces, feel the fresh air and the sun shining on my face. To feel the sea at my feet or stroking my legs, to climb a hill and touch the wind. To do all that easily and calmly. To have a good chat with a glass of wine and to visit new places.

Christina Oiticica – artist and wife of the writer Paulo Coelho

Luxury is being alive, healthy and having true friends, a wonderful family, working at what one loves, having a true character, being kind, being able to help those in need, having dreams, projects and culture. Luxury is having one’s own style. Luxury cannot be bought, contrary to what many believe. Luxury is light, from the Latin lux!

Paulo Ricardo – Brazilian rock singer and composer

Luxury means to me: Uniting comfort and beauty, of course with a touch of exclusivity.

Mario Bulhões – entrepreneur at Pacha Búzios

Luxury is living in health, having a family and being happy.

Vera Gimenez – actress and television hostess

Luxury to me is freedom to say and do whatever comes to mind. Money to me is cheap and is only useful as a means to buy your exponentials of liberty. If the rings of a chain that binds me to a wall are made of gold, what good is that to me?

Facundo Guerra – entrepreneur

Luxury to me is being able to stay at home and read a book with no-one to interrupt me or, better still, having two free days to play with my son.

Eleonora Paschoal – journalist

Luxury is being healthy, surrounded by those you love, living in comfort. The rest are mere details.

Silvio Gemaque – federal judge

Luxury to me is having time to appreciate what I’ve accomplished and to enjoy it with the people I love the most.

Tatjana Ceratti – hostess on programme ‘Mundo Fashion’ (Fashionable World)

Total Luxury is the possibility to Be and to have whatever fulfils you in heart and soul.

Preta Nascimento – entrepreneur

Luxury to me is being natural!!

Cristiana Arcangeli – entrepreneur and founder of Phytoervas cosmetics

Brazilian luxury is a portrait of our country: improvised, beautiful, rich, while at the same time chaotic.

DJ Ana Paula

To me, luxury means what looks or feels good; actually, I enjoy wearing clothes made by good brands, or a powerful watch, but what looks good comes before what it costs.

Eliane Pitanguy – entrepreneur

Luxury means to me anything that makes me feel all things at once: wealth, power, comfort, sophistication and satisfaction ... a new t-shirt made from the simplest white cotton, for instance ...

Eder Meneghine – entrepreneur

Luxury to me is not linked to the exclusivity or high price of an object or service. I believe luxury comes from the possibility to accomplish a desire; not from fulfilling a need but from the pleasure of something superfluous. Under that aspect, luxury can be as simple as having an ice-cream to quell one’s desire. To me, ostentation does not mean luxury but vulgarity. I feel that travelling synthesizes luxury as it requires time and resources. The former, time, may or may not be a cliché, but it is the most luxurious element one can have.

Felipe Folgosi – actor and show host

Luxury to me, inside the fashion universe, is what really makes you happy. Its true meaning is inside each one of us: you have to feel good towards yourself first; then, luxury can be found in the search for a new dress or clothing which will make that a unique and unforgettable moment in your life (a wedding dress, for instance). The greatest gift in my profession, at which I have worked for 15 years, is the pleasure to be a part of such moments belonging to dozens of clients and seeing that their happiness can be a reflection of my work ... luxury is being happy and not following tendencies but, instead, one’s heart ...

Rogerio Figueiredo – stylist

Luxury is not a value, but elegance and naturality; so the more one is aware of that – knowing how to transform simplicity into luxury – the more luxurious one will be.

How can I explain what I feel towards the word ‘luxury’? It is important and is often used as a reference in monetary value ($$$), instead of attitude, which I believe it should. Luxury is simplicity and delicacy in the way one thinks, behaves, loves ...

Luxury is seen in one’s soul, not in one’s imported car or even in another’s latest yacht.

Luxury is shown in one’s behaviour, not in a check book or a credit card. One of the greatest luxuries of our day is TIME, having free time to look after oneself, to be with family and friends or simply knowing how to enjoy rare and exclusive moments of idleness. Silence, moments of a pause ... knowing how to live all that is a true Luxury!

Andrea Fasano – entrepreneur

1.3 How luxury developed in Brazil

When Brazil first existed the concept of luxury was tangible only in the dominant empires, and only for the dominant classes, due to a rigid caste system. Therefore, as the empires conquered more and more territory, the representatives they sent to the colonies continued to consume goods from their homeland, choosing the finest products to meet their basic needs, indicating that these goods were of ‘superior’ quality and introducing them as local luxuries. From 1534, those representing the Portuguese crown in Brazil were able to order goods from Europe, while those not belonging to this privileged group could only admire and long for such ostentation.

In the colonial period, the main raw material produced in Brazil was a luxury product itself, called ‘pau-brasil’, a fine, dark, reddish wood traded to Arabs on routes to the Mediterranean, used for dyeing fine cloth and for manufacturing writing ink. For the colonized Brazilians, however, real luxury was the ownership of slaves, which conferred social distinction and the status of power and wealth. Dur...

Table of contents

• Cover
• Title
• 1 The Universe of Luxury
• 2 The Global Luxury Market
• 3 The Luxury Market in Brazil
• 4 Who Are the Luxury Consumers in Brazil?
• 5 Communication, Advertising and Events
• 6 Distributing Luxury Products and Services in Brazil
• 7 The Wealthiest and Most Powerful Cities in Brazil
• 8 Challenges for the Luxury Market in Brazil
• 9 The Potential of the Brazilian Luxury Market
• 10 Successful Brazilian Enterprises
• 11 The Future for Brazil and Its Luxury Market
• 12 Participating in the Market as Entrepreneur or Employee
• 13 Conclusion
• Bibliography
• Index