Businesses wondering how to crack the huge lower middle class consumer segments in Brazil, Argentina, and Mexico will get some answers this week when Razorfish releases its latest report, “The Stampede.” It details the purchasing power and preferences of “Classe C” consumers, with a focus on their digital aspirations.
The report’s lead author, Joe Crump, speaking with Fast Company from Brazil, shared key findings, and explained what exactly businesses should be doing to reach consumers with a household income of $700-$2,000 per month in Brazil, Argentina, and Mexico.
While the Classe C segment is traditionally thought to be primarily television consumers, Crump’s research shows that in fact they are just as digitally savvy as the upper classes, if not more.
“They want phones that are smart for their lives. They like phones that look high-end, but that have features that suit their lives,” says Crump. “YouTube, for example, is key for Brazilians.”
Crump took his eager, former-journalist eyes into the favellas of Brazil to conduct consumer and digital ethnographies and found that a core part of reaching the vastly neglected consumer segment is via social media. Twitter, for example, is growing five times faster in Brazil than in the developed world, says Crump. “Brazil is an early adopter and Brazilians are extremely social beings.”
While 37 percent of Classe C consumers have web-enabled phones, only 5 percent use that feature, says Crump.
And Facebook? The growth of that social network in Mexico is outpacing its growth in the United States, says Crump.
Another important difference for businesses entering Latin America is to recognize that women are driving the entrepreneurship movement there. “Seven out of 10 borrowers in micro-lending are women,” says Crump. “Online buying is also driven by women.”
And digital shopping is leveling the field for those women. “Online, women have access to all the same shops as upper classes,” he says, “when normally they would be watched by security in the actual shops.”
Samsung figured out the preferences of Classe C consumers early on and has been marketing Internet-enabled televisions, a product favored by Brazilians, for years now.
When I ask Crump what he adds to existing literature on emerging markets in Latin America, he is quick to point out that his niche is the digital focus. His is an ethnographic focus, not too dissimilar from Jan Chipchase, and he spent time immersed in the field, not just distributing surveys. In the report, he details 40 families in depth, focusing on several particular personal profiles.
The report, officially out soon, can be viewed here.
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