Personal Accessories in Brazil

Personal accessories grows marginally as it is still feeling the impact of the economic difficulties

The expectations for 2019 at the beginning of the year were optimistic in the business environment due to the prospects of a more liberal government and the expectations of immediate implementation of economic reforms that could bring back dynamism and higher growth rates across all consumer goods categories. However, during the year the official projections suffered several revisions and the GDP, which in February was expected to see 2.

Trading down and new consumption patterns favour new offers and new targets

However, there are limits to the degrees that consumers can look to maintain their regular consumption patterns and the struggle to continue consuming certain categories can often only be done by a reduced frequency of purchases or the selection of items in lower price tiers. In this context, brands with cheaper items are looking to reduce the gap to premium products in terms of perceived quality with more fashionable and new-concept items, but with prices that are affordable – they might be made of cheaper materials, but their design and appeal are effective as industry players look to attract consumers to buy items at intermediate price levels.

A few strong and traditional companies share the market with many smaller players

The various personal accessories categories are at different stages of maturity. While writing instruments and watches are very mature and are seeing stagnating or slow growth, jewellery and bags and luggage still have great potential to grow at a faster pace by expanding the number of consumers in all price ranges.

Very fragmented distribution is negatively affected by illegal trade

Leisure and personal goods specialist retailers is the main distribution channel. The physical retailers offer important elements traditionally valued by Brazilians, such as personal interaction with salespeople, being able to see and touch the products and also the possibility of negotiating payment options.

Strong growth potential will only be partially tapped into in the next few years

The economic recovery projections made in 2018 have been taking longer to take shape than expected due to one-off events such as the truckers’ strike and presidential elections, with the coming years expected to see the implementation of reforms and a liberal economic agenda with the potential to result in improvements in the main indicators that directly impact consumption confidence, disposable income and purchasing power. However, even with a positive scenario, personal accessories categories face their own challenges.

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