Middle-class and affluent households in Brazil’s interior cities are likely to replace those in the country’s state capitals and major metropolitan areas as the chief growth-drivers in many consumer-product categories, according to a new study from Boston Consulting Group. BCG said these consumers will represent a market of more than $600 billion by 2020—but also said that most companies are in a weak position to capture the opportunities.
The report says middle-class and affluent consumers in the interior cist of Brazil will account for about half of incremental household consumption, or about $130 billion in added spending, through the end of this decade.
These households have almost 20% more disposable income than those in Brazil’s major cities, but consume much less in certain categories—for example, postpaid mobile-telecommunications services and air travel.
"The interior market in Brazil offers some of the world’s richest growth opportunities for consumer goods and services,” said Olavo Cunha, a BCG partner and coauthor of the report. “Yet this market is vastly underserved by both foreign and domestic companies, whose management still tends not to think much beyond Brazil’s major cities and its more developed southern coast.”
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