Meet The 'C' Class - Brazil's Rising Middle Class, The Hope Of A Nation
They are the children of the poor masses in a nation marked by a stark gap between rich and poor. Now the so-called 'C' Class is the bulging target of Brazil's consumer-driven economy. See how they live -- and what they want.
SÃO PAULO - The boss, going through financial problems, tells her daughter not to mistreat the housemaid. The once poor and outcast girl is now the only hope for the family, as she has the chance to marry somebody rich and save them all.
This fictional scene belongs to the famous telenovela Cheias de Charme (Full of Charm) and represents an allegory for the entire Brazilian economy. It depicts the rise of previously impoverished people who've moved up to be part of the new middle class, referred to by the trendy name of the C Class, in a broader classification that goes from A to E. The plotline is one of the first to directly address the emerging phenomenon, as Brazilians grow fascinated by the thoughts and desires of this new striving class.
Here is why: in eight years, from 2003 to 2011, 40 million people rose from D and E classes to C in Brazil, according to Fundação Getúlio Vargas (FGV), a well-known economics and public administration think tank. In total, C Class now represents 54% of the Brazilian population.
The effects of the change are visible: advertising has changed its focus and now does not restrict itself to showing just the rich and white: companies that before only targeted the super rich AAA Class, can now think of nothing but selling to the new middle class. Sellers are being trained to avoid judging people by their appearance — a common habit in a Brazil with a history of stark divides among the classes.
"Companies realized that it is the C Class that offers space for them to grow," says Celso Grisi, an economics professor at the University of São Paulo and director of Fractal Consult, specialized in market analysis. "And if it continues to grow, it will be possible to reduce costs and raise profits."
According to the president of the industrial union ofSão Paulo State, Paulo Skaf, industry has benefited more because of the recent long period of cheap dollars, which sent money towards imported goods. "This is a good moment not only for growth, but also specialization," he says.
Aloísio Pinto, vice-president of planning in WMcCann, a major advertising agency, believes that it is necessary to study what these consumers want. "It's clear that excess of luxury, typical in past advertisements, don't work for the new C Class consumer. Just showing a celebrity won't make them buy more, as they are smarter and more skeptical about advertising tricks. They value great life lessons, stories emphasizing the positive results of hard work, and punishment for those with a bad heart."
A good example of it is on air now. There is no famous person, but a mother and her son, simple-looking, taking a bus and an airplane to attend her older son's graduation ceremony from medical school. The story is being used to sell a credit card.
In 2011, an ad made by Neo Gama for cell phone company Tim was shot in Complexo do Alemão, a Rio slum, and it focused on local inhabitants, something unthinkable a few years ago. The intention was to widen the sales of mobile phones with Internet access and pre-paid connection. Tim is a perfect example of this new attitude, with branches selling in the favela slums of Rio and a sales force working on urban train lines used mostly by poorer classes.
Other companies prefer to preserve their "premium" brands and release different ones to battle for the new consumer. Last year, for instance, Fleury group, specializing in clinical analysis for the extremely wealthy, started a new chain for B and C classes in many states. It is called A+ and already has 30 units in São Paulo alone, and more than 90 around the country. Many units were already part of the group, but had different names -- now the famous Fleury name for the rich comes right below the A+ logo.
President of the group, Omar Hauache, says that this new consumer is getting more and more demanding, and offers a good chance for growth. "These people entered the formal job market and now have access to the health insurances provided by their companies, which represents 70% of our profits. They noticed that they could have access to more quality than in public hospitals." The A+ line registered 15% growth in the first three months of this year, the same as the Fleury products intended for rich customers.
The examples go on. Expensive gym studio Bodytech revived the brand Formula, which now has branches with lower prices. In the same field, Bio Ritmo now has Smart Fit, with no classes, just machines. Chocolate chain stores Kopenhagen has just initiated Brasil Cacau, with products sold at prices 80% less than the mother brand.
Fancy beauty salon chain Jacques Jannine has started the first shop of Basic Beauty, located in Santo Amaro, a neighborhood in São Paulo for C Class residents. The fee for a standard hair cut has fallen from 135 reals ($67.50) to 40 reals ($20).
The federal government has tried to establish official criteria to define who is part of the middle class: families whose monthly incomes per person ranges between 291 to 1,019 reals ($145 to $510). But Márcio Pochmann, prior president of Applied Economics Research Institute (Ipea) (Instituto de Pesquisa Econômica Aplicada), disagrees. He believes that rather than defining middle class by income, it should be viewed as an enlargment of the working class with new formal job positions.
"Most jobs are still underpaid and in areas where having a higher education won't make a difference on wages," Pochmann says. "The working class and the middle class have different ambitions. Who is going to fight for the public health system and schools? The working class. The middle class is more interested in reducing taxes."
For sociologist Amaury de Souza, this discussion is meaningless. The newcomers are under higher risk because, in general, they have less education, property and social capital, that is, fewer relatives and friends to help them in case of need. "We have to think about this group's permanence in the middle class. We must analyze the risk of their return to poorer classes," de Souza says. "This new middle class is ambitious and fond of entrepreneurship. They depend less on the State. A good signal is that they are aware of the importance of education and are investing in it."
Claudete Duarte, 24, claims to be happy to be part of the new middle class. She was looking at shop windows in Mais Shopping Largo 13, a new mall founded on May in São Paulo for C Class. Shops are small (from 12 to 25 square meters) and depend on very simple decoration.
The dreams of the new middle class are all here. A kiosk sells apartments made by MRV, specialized on low-costing lodging. Another one offers leaflets for University Paulista (Unip), a major educational group with over 200,000 students.
With parents who did not finish elementary school, Claudete studies management in Uninove, a private university whose campus was founded in 2008 in Santo Amaro. She says her life has largely improved in the last years -- and now expects more. "I know what it is to be poor, very poor, and I hope I will be able to see how it is to be rich," she says. "It doesn't need to be very rich, just a little rich is O.K. That state where you don't need to think much about money, you know?"
The entire Brazilian economy is rooting for her to get there.
Read the original article in Portuguese
Photo - spyderball