Having proclaimed myself an aspiring entrepreneur, I decided to take a road trip to do some real market search. We have all been reading about the middle class in Brazil, which has been growing with more and more consumers joining Class C from the poor classes D and E. According to these guys here, the size of this class corresponds to 105 million people, who are now earning more and spending even more. The class became so large, that I am told that they are further segmenting it to C1, C2, etc. Everyone is trying to make money of these guys, so I wanted to find out for myself who are they and what are they buying.
My Brazilian partner in crime and our gringo American body guard headed over to the North Zone in Rio, which is something one may call, the other side of the wall. I dressed down, trying to make myself look poor, I brought a minimal amount of money and kept checking the locks of the car on our way there, expecting to arrive at some crazy slum. On our way in traffic, the road was full of early-teen boys, bravely selling Biscoto Globo which is the Brazilian all-time favorite beach snack.
The story behind Biscoito Globo is an interesting one, as apparently the owner, who didn’t want to grow the business anymore, started helping his employees become entrepreneurs and start their own Bisocoito Globo factories to compete with him. Saddened by the situation of those boy and inspired by the story above, we once again resolved to try come up with solutions to help make the world a better place.
Ok, so back to my original story. When we finally arrived to Norte Shopping mall, I was both disappointed and intrigued. I was disappointed because it was just like any other massive shopping mall, full of stores of any kind and level, offering all the same stuff I could buy in the richer south zone of Rio. It reminded me of the malls in Barra da Tijuca, the Miami of Rio.
On the other hand, I also learned that if those guys are class C, I belong to class D or E. People were buying stuff that I have never even dreamt of buying such as 3D TVs, $1000 Michael Kors watches, or other sorts of luxuries.
I made the following observations about what I had seen:
1. Duplication: there were many many shops but most of them were selling similar stuff, such as furniture, ladies shoes, mens suites, cosmetics (mostly perfumery), sports clothes/shoes, electronics, mobile phones.
2. Overstocking: the store floors were crowded with piles of merchandise. It was as if it was screaming to the customer “clear me, take something home with you!”. I see this stocking everywhere here, though.
3.Overloading: there was a lot of everything, to the point that the consumer feels at lost, at where to start, and what to buy? I suppose this creates an impulse to just buy something from the crazy variety of the same crappy stuff.
I saw 2 stores that seemed well-organized and appealing to me. Guess what? They were the Nike Store and the Nokia store.
I don’t know what all of this means, but this trip definitely gave me a lot of food for thought.