Furniture for the authentic Brazilian consumer

The increased purchasing power of the new middle class included millions of Brazilians in consumption areas not accessible before. Today, class C represents such a large a slice of the social class pyramid that it can no longer be seen just as a segment, it is now the real Brazilian market. This group gained 1.2 million new households and totals a trillion reais per year in business – more than the annual GDP of Argentina, Paraguay, Portugal and Uruguay added up. In addition, it accounts for 78% of what is bought in supermarkets and more than 60% of the national income. Together with class D, it owns seven out of ten active credit cards in Brazil.The role of the new middle class in the national economy is not yet fully understood because it is a recent social phenomenon. It is formed mostly by people who migrated from class D thanks to a virtuous cycle that begins with the distribution of income, causing an increase in formal employment and resulting in higher education. From 2002 to 2011, 800,000 people from class D started their higher education and, statistically, it is known that each additional year of studies represents an increase of 15% in income. “Every day housewives and householders decide which type of rice or powdered soap to buy. Our challenge is to make the purchase of furniture be seen as a priority in the universe of consumption of these families” says Meirelles .There has been a popularization of the consumption categories, increasing the range of basic foods purchased by the middle class. Therefore, the furniture industry seeks subsidization to keep up with this demand, which is quite peculiar. While the classes at the top of the pyramid search the customization of the offer, differentiation through consumption and are less brand-loyal, the emerging population seeks inclusion and concrete advantages, in addition to being more loyal to brands that prove a proper cost-benefit ratio. Contrary to common sense, they not only take into consideration the purchase price, because they also consider fair the amount charged for a product or service. The new Brazilian middle class is richer than 64% of the world population and spends R$ 19.4 billion a year in the furniture segment. “Of every R$ 100 spent on furniture in Brazil, R$ 46.5 are invested by  class C and R$ 19.9 by class D. Our challenge is to furnish the house of these Brazilians” says Renato Meirelles.