Business
Strategy

 

 

 

Growth in household consumption Retail Sales in Brazil (US$ billions)

Fonte: Euromonitor

Growth at Multiplus is driven by social mobility, by greater use of credit cards and by growth in air transport

 

Growth at Multiplus is tied substantially to household consumption, since members accrue points by consuming partner companies' products and services and redeem their points by also consuming products and services. Consumption in 2012 saw significant stimulus and should grow in the coming years at rates of over 7%. (Source: Euromonitor)

The target public for this consumption is the upper class (A and B classes), which has been growing in recent years, as shown in the graph below. Most redemptions currently take place by purchasing airfare. However, with the network's continued expansion, Multiplus should increase its offer of awards and begin to also attract a portion of the C class.

Social classes in Brazil
(Percentage of population)

Average income of the D and E classes – BRL510.50/month; C class – BRL1,162.00; and A and B classes – BRL6,328.50/month Source: Social Policy Center at FGV-Rio

 

Banks accounted for approximately 80% of the revenue from the sale of Multiplus points in 2012. Points accrued in credit card loyalty programs can be converted into Multiplus points and redeemed for products and services. Greater access to banking services, social mobility, the high rate of occupation and higher incomes have contributed to growth in the use of credit cards, which should be around 46% between 2012 and 2015. (Source: Abecs and LCA Consultores).

Airfare purchases account for 94.6% of points redeemed. In this sector, there are two forces acting in tandem. On the one hand, Latin America is the fastest growing region in number of passengers per flight. On the other, the average trips per capita in Brazil is just 0.5, while in countries such as the United States and England, it is over 2.5. Because of this, there is also a positive expectation that there will be an upswing in this industry, which is highly attractive to members.

Increase in the use of credit cards/ Card expenditures in Brazil (BRL billions)		Growth in air transport/Passengers boarding domestic flights (thousands)
Source: Abecs and LCA Consultores		Source: Brazil's National Civil Aviation Agency (ANAC) and Bain&Company

When comparing the segment in which Multiplus operates with the segment where similar companies operate in other countries, there is a noticeable opportunity to increase penetration in Brazil with the maturing of the loyalty market. To capture this growth, Multiplus relies on an extensive and growing network of partners and members, in addition to the edge it has as a pioneer in the coalition model.

Penetration of loyalty programs
(%)

Source: loyalty program websites and each country's bureau of statistical data (updated in Dec/12)