Slum dwellers consume R$ 56 billion per year.
The finding comes from research conducted by Data Popular, in partnership with the Central Union of Favelas (CUFA); class C has grown by almost 50% in the last decade within the communities.
Flávia Villela
Reporter from Agência Brasil
Rio de Janeiro – Residents of Brazilian favelas consume approximately R$ 56 billion per year, equivalent to the Gross Domestic Product (GDP) of neighboring Bolivia. This finding comes from research conducted by the Data Popular institute, in partnership with the Central Única de Favelas (Cufa), released this Wednesday, the 20th.
According to the study, based on interviews and cross-referencing data from the National Household Sample Survey (PNAD) with data from the Family Budget Survey (POF), popular consumption has tripled in the last ten years.
However, despite the enormous consumption potential of a population of approximately 12 million inhabitants, this market niche is still largely unexplored due to prejudice, according to Renato Meirelles, director of Data Popular.
"The favela resident doesn't want to leave the favela; they want to capitalize on it through the brands they use. This was an invisible market, right under our noses, but people only saw the favela through the lens of violence and drug trafficking," said Meirelles. According to him, two-thirds of the country's favela residents belong to the wealthiest half of the world.
Research reveals that the C class grew much more in metropolitan communities than in the country's interior, with an increase of almost 50% in the last decade (from 45% to 66%), as did the average schooling, which rose from four to six years in the same period.
The owner of the company Vai Voando, Tomas Rabe, is one of the entrepreneurs who bet on low-income consumers and today does not regret it. With around 70 stores selling airline tickets in favelas, mainly in Rio and São Paulo, the company, created just over two years ago, plans to open 50 more stores this year, in Rio de Janeiro alone.
"This market is invisible to those who aren't paying attention," said the businessman. According to him, less than three years later, the company is transporting an average of 3 passengers per month, with 43 passengers transported to date.
Rabe explained that, once prejudice is overcome, it's important to understand this audience and adapt to their consumption habits and reality. "Most don't use credit cards and many don't even have a bank account. So, our payment method is through prepaid bank slips," he explained.
According to the study, 69% of these populations use cash as a form of payment, 9% use third-party credit cards, and 10% use their own credit cards. Furthermore, approximately 69% of residents in these communities go to the mall every week, and 50% eat out weekly. In the next 12 months, 49% intend to buy furniture; 36% want a new appliance; and 24% intend to subscribe to cable TV services.
Businessman Elias Targilene is another example of success among those who invested in social classes C, D, and E. With five popular shopping malls built in a three-year period, he plans to launch the first shopping mall in Brazil inside a favela, in Complexo do Alemão, in the northern zone of Rio, in three months.
"We can no longer say that being popular means being ugly, dirty, smelly, and disorganized. Today, we are a rich nation, and being popular today means having service, being attractive, and providing good customer service," declared the businessman.
Edited by: Davi Oliveira