Brazil’s new consumer class flocks to US to buy
Mar 11, 2012, 3:12 PM
RIO DE JANEIRO (AP) – The overstuffed bags filling Fernando Mello’s luggage cart wobbled precariously as the gym owner made his way home one morning through Rio’s international airport. Navigating the terminal, Mello was part of a horde of other Brazilian travelers returning with loot found in the strip malls and discount outlets of southern Florida.
Mello’s girlfriend’s freshly purchased Michael Kors handbag in gold lame sat atop four bulging suitcases like a shining crown _ a testament to the newfound consumer power of Brazilian travelers, who now spend more per capita than any other visitors to the U.S.
In fact, Brazilians are spending so much that flights with Brazil’s top airline TAM originating in the U.S. have had to carry more fuel to accommodate the dramatically overweight baggage.
“We left with nothing, just a piece of hand luggage,” said the 30-year-old Mello. “We go to the U.S. once a year, stay in great hotels, have a fantastic holiday and shop till we drop and it’s still cheaper than shopping in Brazil. It’s a no-brainer.”
According to the latest statistics, Brazilians spent $5.9 billion in the U.S. in 2010 in a tsunami of cash that’s shifting American immigration practices and boosting economies in hard-hit parts of the U.S. that remain in the doldrums.
President Barack Obama recently ordered the State Department to speed up the visa application process for tourists coming from Brazil, China and other nations with newly flush consumers.
After suffering decades of hyperinflation, Brazil has ridden high commodity prices along with some of the world’s biggest offshore oil discoveries to expand its economy, lift millions out of poverty and multiply the ranks of the country’s deep-pocketed elite.
The buying binge also shows off the muscle of the country’s mushrooming middle class, which has expanded by 40 million people since 2003. That’s been bolstered by the growing use of credit cards, bank loans and other forms of consumer credit.
But it’s not just the easy money that has transformed Brazilians into world-class shoppers.
Stiff tariffs on all imports push the prices of foreign-made goods into the stratosphere at home. And though domestic products are not known for their quality, their prices have risen in recent years as demand is higher than production, making it cheaper to buy nearly everything in the U.S., from clothes to toys and kitchen gear and even soaps and shampoos.
As a result, Brazilians spend more in the U.S. than visitors from any other nation _ around $5,400 per person in 2010, with experts estimating the number growing last year. Japanese tourists followed, spending $4,300 each.
Unniverson Liborio, a 60-year-old chef based in New York, disembarked at Rio’s airport with bags stuffed with hot buys for his grandchildren _ baby onesies, a pink plastic Barbie mansion and 700 disposable diapers.
“I got this all for maybe $300, total,” said the Brazilian-born Liborio, who has lived in the U.S. for decades. “Here I couldn’t have bought even half the diapers for the same price, and forget about everything else.”
Price discrepancies are particularly pronounced when it comes to luxury goods.
With the number of millionaire households here forecast to more than triple by 2020, Brazil is widely regarded as the new El Dorado of luxury, and top-tier labels such as Italy’s Prada and Bottega Veneta are scrambling to get a foothold.
Because of the staggering import taxes, however, the high-end handbags, shoes, garments and electronics can end up retailing for several times more here than in Europe or the U.S. The iPhone 4S with 16 gigabytes of memory costs $1,515 without a contract on Apple’s Brazilian website. The same phone retails without a contract for $649 on Apple’s U.S. website.
And so it is that hordes of Brazilians swarm Miami’s Apple Store while the Girls from Ipanema snap up designer purses on New York’s Fifth Avenue.
Brazilian shoppers are easy to spot _ they’re the ones at malls with huge suitcases on rollers, spending from store to store until their baggage won’t hold any more.
Aristoteles Guimaraes, a 36-year-old from Sao Paulo, was busy recently at Miami’s Sawgrass Mill mall while on a special four-day shopping mission with a budget of $4,000.
“I came exclusively to buy things for my baby,” said Guimaraes, whose wife is seven months pregnant and remained back home. “I came to buy everything. Things here cost on average one-third of what they would in Brazil.”
His big find: an Italian baby stroller that would have run him $1,300 in Sao Paulo but was $350 in the U.S.
Guimaraes had visited before, with his first trip in 2005, and said he was treated better this time at his hotel and at the shops.
It should come as no surprise: Still struggling merchants have rejoiced at the business.
“They spend a lot,” said Giovana Ennen, a saleswoman at a luggage store in Miami. “I’ve sold 16 suitcases to a family of six people.”
Ennen added that she sees some Brazilian clients every six weeks or so and that they leave each time with bags full of merchandise.
Brazilians’ heavy spending has in part helped pave the way for a geopolitical shift in relations between the Latin American giant and the U.S.
During a recent visit to Disney World, a perennial favorite among Brazilians, Obama unveiled measures aimed at making it faster and easier to obtain tourist visas for citizens of developing countries such as China and Brazil with “rapidly growing economies, large populations and emerging middle classes.”
“More and more of their people can now afford to visit America who couldn’t come before,” Obama said.
He said the State Department has been instructed to process 40 percent more visa applications for Brazilian and Chinese nationals this year.
That expected increase comes on top of the already skyrocketing numbers of U.S. visas granted to Brazilians in recent years, which more than doubled over the past decade to 546,866 in 2010. Official figures for 2011 have not yet been released, but the U.S. Embassy in Brasilia estimates at least 1 million visas were granted last year.
The U.S. consulate in Sao Paulo last year received more visa applications than any other in the world _ around 3,000 a day, according to the U.S. Embassy.
Business at the three other U.S. consulates in Brazil has been so brisk that Undersecretary of State for Political Affairs Wendy Sherman has said staff there are working double shifts and plans are being examined to send reinforcements.
Liborio, the New York-based chef, said he’s amazed how the tables have turned since the days people flocked to Brazil for cheap clothing and other buys.
“I used to do my shopping here in Brazil, where you could buy four pairs of jeans for the price of one in the U.S.,” he said amid a group of sated shoppers at the airport. “Now I come here with tons of luggage and leave with nothing.”
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Associated Press writer Jenny Barchfield reported this story in Rio de Janeiro and Gisela Salomon reported in Miami. AP writers Marco Sibaja in Brasilia and Stan Lehman in Sao Paulo contributed to this report.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
