Luxury Brazil: The digital Opportunity

1. Brazil Luxury: The Digital Opportunity Credit: http://www.zerrenner.fot.br/ Jerome Amoudruz - 2014

2. “Digital marketing in Brazil, will serve local and global sales” Between 2011 and 2013, more than 30 international luxury brands opened their first flagship boutique in Brazil. In the world’s 6th largest economy, luxury and premium brands know that points of sale are rare, local distributors demanding and fiscal barriers high, but our clients know that investing in Brazil will improve local and International sales. ! With offices in Genève and São Paulo, BRSL is the first digital agency offering luxury brands strategic and executive services on the internet for the Brazilian market. In 2014, Brazil’s 'Class A' (people with a min. 60K USD yearly income) represents more than 13M consumers, the key to reaching and engaging with these new clients is by investing in digital marketing in Brazil.

3. Brazil 2014 Overview 6 200 100 6 th World Economy Manaus Recife ! Salvador da Bahia ! Brasilia Belo Horizonte Rio de Janeiro São Paulo Curitiba Porto Alegre M Population M Internet Users th Google market’s revenue

4. Brazil 2013 Overview 600 Mi 5 565 th 510 Internet Users 480 Mi most used language on the web: Portuguese! 360 Mi 37 240 Mi 165 99 120 Mi 83 75 65 60 Arabic French 90 0 Mi English Chinese Spanish Japanese Portuguese German Languages used on the Internet in 2012 Source: ITU.com Others % of Brazilian managers speak english

5. Brazil consumer population structure in 2013 { 5’000 UHNWI • Most come from families traditionally very rich • Main part is male entrepreneurs HNWI • Brasil is 11th in the Millionaire ranking World Wide • High concentration in São Paulo • Average between 35 and 45 years old Upper Class 165’000 Luxury Consumers • Main part is post graduate from a university • (DINKS) Double income, No kids • Concentration in Rio and São Paulo • Total Household income over 60K USD/Year 13M 133M Middle Class 48 MM Lower Class Source : Credit Suisse - Fundação Getulho Vargas • Representing le largest part of the Brazilian population • Class with highest volume growth • Class with the highest revenue growth • Total Household income 10K - 45K USD/Year

6. Luxury brands active in Brazil

7. Chronology of luxury in Brazil The (short) history of luxury combine with the opening of luxury malls in Brazil where international luxury brands opened their Flag ship stores during the last 10 years. 1996 2005 Daslu Villa Daslu Daslu brought couture brand Chanel to Brazil and opened the brand's first international store-in-store boutique for many others. Chanel, was followed by Jimmy Choo, Louis Vuitton and Valentino, all exclusive to the establishment. In 2005, raised by the success, Villa Daslu opened its door with 17.000 m2 and became the temple of luxury in Brazil, importing more than 60 International luxury brands. 2008 Cidade Jardins In 2008, The Shopping Cidade Jardins opened in the most luxurious area of São Paulo, bringing many “firstFlagship store” of International luxury Brands such as Hermès or Rolex. 2012 JK Iguatemi Jk Iguatemi opened on fall 2012, hosting most of the first flagship stores in Latin America. to name a few, Bvlgari, IWC, Van Cleef&Arpel, etc,...

8. Key Take Away • Luxury consumption is quite new in Brazil for a small part of the clients ! • Speaking portuguese is mandatory to penetrate the market ! • Since 2008 the luxury competition, is getting harder

9. 3 main Brazilian ways of life The digital opportunity in Brazil

10. Brazilian New luxury consumers: The farm Manaus Recife Salvador da Bahia Brasilia Belo Horizonte Rio de Janeiro São Paulo Curitiba Porto Alegre

11. Brazilian New luxury consumers: The city Manaus Recife Salvador da Bahia Brasilia Belo Horizonte Rio de Janeiro São Paulo Curitiba Porto Alegre

12. Brazilian New luxury consumers: The beach Manaus Recife Salvador da Bahia Brasilia Belo Horizonte Rio de Janeiro São Paulo Curitiba Porto Alegre

13. Key Take Away • There are many luxury consumption type in Brazil ! • São Paulo luxury consumers are quite educated about luxury products ! • Internet is also a prospective tool for Brazilian living in the backland

14. 10 Facts, Figures & Behaviors To understand the digital opportunity in Brazil

15. Luxury Shopping Abroad 62% 34% 1% Africa 3% Asia / Paciﬁc Source: 2013 European Travel Commission 62% of all Brazilian outbound trips go to the Americas and 34% to Europe. An important part of luxury consumption is generated abroad... ! High import taxes rates for foreign products make prices higher in Brazil (+20% to +80% depending on the product category).

16. Payment in Installment ! It is cultural, Brazilian buy products in installment, even luxury products, event high society! ! “Who don’t offer payment in installment won’t sell, even ! luxury products. It is a unique situation in the world”. - Alain dos Santos, General Manager MontBlanc Brazil !

17. Home delivery culture Home delivery culture is part of the Brazilian high service quality. ! It can be for supermarket, furniture, food, etc,… everything is delivered at home in Brazil.

18. Internet Inﬂuence Google Keyword: “Comprar” Internet is every day more inﬂuential in the purchase act of Brazilian ! The usage of the word “comprar” (Buy) in Google Search Engine (category shopping) is increasing dramatically since 2008 Source: Google trends 2013

19. Black Friday 2013 Online Sales Results for 2013 black Friday (compared to 2012): ! Total Purchases: 969’000 (+79%) ! Total sales: US$ 112M (+92%) Average basket: US$ 217 (+9%) ! ! Source: Makazi Group 2013

20. L’occitane en Provence - Brazil Online Sales activities for L’Occitane en Provence ! E-commerce share of sales in 2013 ! •Brazil: ! •France: •USA: Source: L’Occitane en Provence 2013. 3.5% 10% 15%

21. Media Houses 44% 59% Who reach the Upper Class on content portal? ! 21% 40% Digital Media houses are split in few big players.

22. Google BRASIL 2013 - M Unique Visitors (without mobile access) Google Facebook Google has a huge search market share in Brasil and competition is tough! UOL Microsoft sites R7 Globo.com Terra Yahoo Sites IG Wikimedia Fdt 0 Source: Comscore 2013 20 40 60 80

23. Social Media 3 World Facebook population 86% Penetration rate rd Brazilian are Social Media addicts ! 13M Users 2 years to double members volume Source: Facebook, Linkedin, 2013 Facebook and linkedin have the fastest penetration rate ever in Brazil

24. New inﬂuencers Bloggers are massmedia. blogdathassia.com.br 3 Million PV/month garotasestupidas.com 6 Million PV/month lalarudge.com.br costanzapascolato.com.br 3 Million PV/month 500’000 PV/month Source: Respective blog’s media Kit ! International Fashion and luxury consumption is quite new and inﬂuencers have a strong share of voice on the web.

25. Mobile use growth Mobile use grows 115% in 2013! ! Does your corporate website is responsive?

26. Mercado livre the Brazilian Ebay Your Brand’s Google share of voice is very important! ! Replica market reach aggressively the ﬁrst result page with mercadolivre.com.br (Brazilian Ebay) and other players that often use Paid Search!

27. Key Take Away • 2014 will be the maturing year of digital in Brazil ! • Brazilian have a strong brand conscience and love technologies, including girls! ! • Brazil is the heaviest Social Media user in the world. ! • Local luxury players are very strong with digital, International players are still weak in Brazil.

28. About the agency First digital agency dedicated to luxury brands in Brazil

29. Our services Digital Consulting & Ecommerce We help to design relevant digital strategies to connect with your new audience in Brazil ! Strategy Influencers Digital Media Content Digital Media Planning & Buying We design tailor made digital media plan to reach Brazilian Luxury Consumers ! Community & Branded content We create local storytelling on social networks in Brazilian portuguese. ! Influencers & Bloggers relation We connect Brands with local influencers and bloggers

30. ! Thank You! BRSL digital sàrl Avenue Krieg 7, Case Postale 290 1211 Geneva 17 Switzerland Jérôme Amoudruz! jerome.amoudruz@brsl.com.br +55 (11) 94134-4770! ! BRSL.COM.BR! Luxury Digital Marketing! Genève - São Paulo BRSL digital ltda Rua Luis Coelhos, 340 Consolação - São Paulo CEP: 01309-903 Brasil