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Brazil: More than Futbol!

Date: June, 2014 --

With the focus of world attention pointed squarely at Brazil over the last few weeks, we wanted to take a look back at since we first profiled the marketing environment in that country back in a February 2010 article, Exploring Direct Mail Opportunities in Brazil. At the time, the country was firmly positioned as one with tremendous growth potential due to a number of key economic, demographic, sociographic and other factors, but what’s happened since and have data-driven marketers really found success in Brazil?

Overall, we are pleased to report that the country continues its upward path of development and growth.  It has been combined with rapid development of the capabilities of the postal system, Correios, and an increase in online activity and ordering. 

Economic Boom

Since our last visit in 2010, the economy of Brazil has grown at the enormous rate of over 12% per year.  In 2012, the economy was the world's seventh largest by nominal GDP and the seventh largest by purchasing power parity. The middle class population has reached 91 million people representing nearly 50% of the population and accounting for 46 percent of national income. This is a solid targetable population for your business.

The middle class has an average monthly income of between 1,115 and 4,807 reais ($586 and $2,530), according to one of Brazil’s “newspapers of record”, O Globo. Although growth has moderated in recent months, it is still very healthy, supported by government spending in preparation for the 2014 World Cup and the Olympics in 2016. 

Much of the preparations respond (to some extent) to the desperate need for better public transportation and utilities, including electricity and water.  Alas, Brazil’s reputation for political players perceiving the public purse to be their own remains in place, although the current administration under the highly popular President Dilma Rousseff has been aggressive in working to improve honesty in government.  She has continued and augmented many of the government programs begun under her predecessor, President Lula, which were targeted to improve the lives and futures of the poorest in the urban areas. 

DM Sales Up

As the direct marketing industry is concerned, reports indicate that direct marketing revenues in Brazil last year were some $15 billion, about one-third that of the US. This growth must be visualized against a general economic growth which has facilitated the continued emergence of a middle class consumer, as this sector is the third fastest growing segment of the population in the world behind its fellow BRICs, India and China. In short, people have more money to spend.  

Digital Marketing

Here too the indicators are very impressive. About half the population (90 million) are online and Internet usage is growing. ComScore reported last year that the average consumer spent 27 hours per month online. (The global average is 24.7.) Mobile phone penetration is the largest in Latin America and phones and tablets are increasingly used to access the Internet, with non-PC page views reaching 6% in 2013. No fools as shoppers, 13% of Brazilians price compare by mobile phone while visiting shops. 

And, one of the great delights for foreign visitors and direct marketers, Brazilians are very sociable and personally interactive. 36% of their online time is spent on social media and 79% of Internet users use social media. Brazil is the second-largest user of Twitter, with over 41 million Brazilians having their say on that site. 

The Post is Thriving - Everywhere

The postal system, Correios, has participated in the general development of the economy and the enrichment of the population. It has expanded its products and services and increased the size of its network and delivery services.  For example, according to the Universal Postal Union, between 2008 and 2011 the percent of homes receiving home mail delivery increased from 79% to 82%. And this was in a period of accelerated household formation. Yes, there is door-to-door delivery of mail in Brazil, and an excellent addressing system which is in a constant state of expansion. Finding addresses of your customers will not be a problem.  

Correios is also seeing some of the same trends in mail decline, and parcel traffic increases, which we see in the US and other developed economies. But letter post volumes have decreased relatively modestly from 8.8 billion items in 2008 to 8.4 billion in 2011. 

According to the CEO of Correios, Wagner Pinheiro de Oliveiera, this modest decline reflects the increased wealth in the improving economy. More people are writing letters because they can afford to do so. 

 This also indicates that the direct mail industry is alive and well. For example, another important indicator is that during the same period parcel deliveries increased from 22.5 million to 41.5 million items, nearly doubling! Not surprisingly, Correios’ revenue from letters fell from 61% of income in 2008 to 52.8% in 2011, but bear in mind that revenues increased during the same period from parcel and financial services. Meaning letter revenues as a share of the total decreased, but the absolute earnings amount did not.     

As is the case for many international postal operators, growth in financial services offerings and a variety of other services plays an increasingly important role in the Correios’ growth. The growth in sales by Correios in financial services may reflect both the expansion of the offering of financial services in the posts’ outlets throughout the country, and increased online shopping. For example, domestic money order volumes nearly tripled from 2008 to 2012, growing from 13.4 million items to 39.6 million!  Certainly a substantial number of those money orders were going to online eCommerce vendors.   

Yes, you can get paid in Brazil. Correios opened over one million bank accounts for customers in its network in 2012.

Get Good Advice & Delivery

And you can get good advice. Correios has a very talented direct marketing advisory team who have a wealth of experience from which you can draw. For example, they can provide demographic and geographic information which may be valuable in targeting particular markets. They also have marketing savvy and keep their fingers on the pulse of the market, monitoring what is working, and what is not.

Did you know that Correios is one of the few remaining postal systems to offer a telegram service?  It’s very effective in getting people to concerts and special sales on short notice, and in encouraging payment of overdue bills!

As for service, you will be able to get promotional mail and products delivered, to real street addresses, nearly everywhere.  Correios has offices throughout the farthest reaches of this vast country, having been given multiple social responsibilities by the government.  For example, at the start of each school year it delivers 163 million books to 135,000 schools throughout the country.  They also deliver milk to government-supported nurseries and elementary schools, and they have “post offices” on boats that follow routes on the vast riverine network of Amazonian Brazil. 

While the addresses of some of those remote villages which the postal boats serve may be a bit unusual, as was detailed in our recent article: Data Quality Spotlight: Latin America, the addresses of your urban customers will be more than manageable by Data Services, Inc. Data hygiene will be every bit as important for your Brazilian portfolio as in any other country, so follow the good advice you’ll receive from Data Services’ international data quality experts.