Market News Update

Market: Brazil

Date: March 2013

Shopping Malls Made US$60bn in 2012

Industry: Retail: Food & Beverage, Cosmetics, Toys, Fashion, Telephony, Automotive

Sales in shopping malls throughout Brazil grew 10.65 percent, with revenues of R$119.5 billion (c. US$60 billion) in 2012. Christmas purchases grew 15 percent as against the same period in 2011. The good performance of the retail sector was attributed to the low level of unemployment, growth in wages and to the offer of credit, which remains at significant levels in Brazil. Expectations are that sales should continue up and may grow 12 percent in 2013.

The Brazilian consumer market is currently the eighth largest in the world and it is expected to become the fifth by the end of the decade, surpassing France, England and Italy. According to the Shopping Centers Association (ABRASCE), the demand for articles at Christmas was greater in the sectors of youth fashion, telephony, cosmetics and toys. Throughout the year, however, the highlights were trade in the food courts, leisure, jewelry and shoe shops. According to a survey by McKinsey, within a decade, the Brazilian consumer market will almost double in size from 2.2 trillion to 3.5 trillion.

In 2020, Brazilians will consume as much pasta as Italians and three times more beer than Germans, and Brazil is expected to have the third largest car market in the world. With business stimulated by greater income of Brazilians, 27 new shopping malls were opened last year, increasing the number of purchase centers in the country to 457. This was the greatest growth over the last 13 years. From 2011 to 2012, Brazil was picked for the expansion of international retailers such as TopShop, Sephora, Lanvin, Mil Mil and Cescosud. During the same period, Wal-Mart and Starbucks reported expansion.

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Brad Schneider

Brazil Market Update

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