Personal Accessories in Brazil

Personal accessories faces third consecutive year with low growth rate in 2018

Although the Brazilian economy showed signs of recovery, with the projected GDP of 2018 growing marginally, personal accessories maintained the same pace of value growth as 2017. Low- and mid-income consumers were the most affected by unemployment, which continued to register high levels, and declining purchasing power, which led to another weak performance compared to the average of the review period.

Despite the crisis, some manufacturers are developing successful strategies to grow

New targets, licensing, innovations and stores opening are some of the strategies bringing positive results across the categories. For example, the strong movement of acquisitions among players in watches towards the end of the review period incremented the portfolios of major manufacturers targeting new groups of consumers.

Highly fragmented landscape comprises many single category manufacturers

The value share of other companies was substantial for personal accessories in 2018, indicating a strong hegemony of smaller players. A W Faber-Castell SA lost its leadership to Arezzo Indústria & Comércio SA, which registered the highest value growth in 2018.

Specialist retailers lead, but illegal trade negatively affects overall performance

Stability amongst the distribution channels meant that leisure and personal goods specialist retailers continued to hold the highest value share within personal accessories. Brazilians in general appreciate being directly in contact with the items in bricks-and-mortar stores, where it is possible to interact with the products and negotiate more flexible payment options with a personalised service.

Moderate growth expected for the forecast period

Even with the economy slowly recovering in the post-recession scenario, some macroeconomic factors persist, negatively affecting the performance of personal accessories until 2020, such as the high unemployment levels and the increasing consumer debt, which reduces purchasing power. By 2021, assuming the consolidation of a new government to assume presidency in 2019, it is expected that the market will return to higher levels of growth.

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