I’ve just got back from a few days in Sao Paulo, the largest city in Brazil, indeed in the whole of South America. It was quite an eye opener.
To start with, the sheer scale of the place overwhelms. The vital statistics tell their own story. In the greater Sao Paulo area the population is nearly 25m. The city is the 19th richest in the world, and if ‘Sampa’ were a country it would be the 47th wealthiest on the globe. The impression you are left with is of an almost limitless energy – wrapped up with a certain amount of chaos and a great sense of creativity and possibility.
Brazil is going through huge growth, and great change – most of it very positive. After years of instability it has the most popular president in its history – Luiz Inacio Lula de Silva – who has championed the plight of the poor in society, whilst bringing a period of political and economic stability and embracing the free market. Inequality in society is still a major issue, but every year millions of people ‘graduate’ to the middle classes, which has meant over the past few years the advent of over 10 million new consumers. GDP per head is now up to nearly $10,000 per annum. This growth in the middle class is set to continue as the country returns to growth rates similar to what it has experienced in the recent past.
Since 2004 the average GDP growth has been 4.5% – and whilst Brazil is certainly not exempt from the current economic downturn, its recession is forecast to be shallower and shorter than in a lot of the major world economies. Brazil is the 10th largest economy in the world with an annual GDP of about $1.5trillion. It accounts for 30% of the GDP of South America. In short, it’s a market that demands attention.
The advertising market in Brazil is mature – it’s the 10th biggest in the world – and if the agencies that I visited are any benchmark, the quality of strategy, ideas and creativity merits comparison with the best from anywhere in the world. So it’s time to go south. Watch this space.