Favelas: Brazil’s New Consumerism Booms from the Bottom

RIO DE JANEIRO – Few outsiders come to this favela (slum) in Rio de Janeiro’s West Zone, populated largely with recent migrants from Brazil’s traditionally depressed northeast region and controlled for years by anti-drug trafficker paramilitaries that made the favela the thinly-veiled subject of the recent blockbuster “Elite Squad: The Enemy Within.”

A view of the Rio das Pedras slum in Rio de Janeiro (Sergio Moraes/Reuters/Newscom)

Tucked behind a lagoon popular for boating and the wealthy condos of the Barra region, Rio das Pedras had been accustomed to residents making their few big-ticket purchases in the malls of the Barra beachside neighborhood.

But a flurry of new high-end commerce here is showing that Brazil’s new middle class is starting to do its shopping closer to home.

“For sound systems, they don’t buy 500-, 800-reais ones ($275-$440). They buy 2000-reais ones ($1100),” said Jorge Fiz, manager of the RicardoEletro electronics store that opened just before Christmas in 2011.  The flatscreen-TV and home-appliances store was the first electronics outlet in the community, and it employs 25 salespeople. Fiz said he often sees customers who have informal work – he names waiters, bus drivers and nannies – who are unable to get credit cards but purchase the store’s largest items with cash.

“The banks are slow to get in on this market, even though they have a high purchasing power,” Fiz said.

Lucia Ferreira Leite, who said she had washed her clothes by hand all of her life, wandered into the store to look for her first washing machine. The elderly pensioner asked if she could pay in “carnê” – a system similar to paying parceled monthly amounts automatically charged on a credit card but in which clients pay their installments in cash and in person on a paper bill.

“I saw the ads. Now we’ll see if it’s worth it,” Ferreira Leite said.

Although RicardoEletro is the flashiest example of new enterprise here, tucked among the juice counters and landline-phone stations for calls to other states are the pricey mattress store Ortobom, Bradesco and BMG banks, a supermarket with 25 checkout counters, and two travel agencies – all opened within the last five years, and several in 2011 alone.

Margarida Duarte, manager of a travel agency that monitors airfare promotions so it can call routine clients waiting to buy tickets, said the price of a plane ticket can be only slightly higher than that of the three-day buses to the northeastern cities where her clients go to visit their families.

“I believe the buses are going to close their doors soon,” Duarte said. “Someone who has traveled once by plane doesn’t want to go by bus again.”

Although Rio das Pedras has little formal policing and stores pay monthly protection fees to the heavy-handed paramilitaries, favelas with the new Units of Pacifying Police program installed over the past three years have seen a rapid growth in formal commerce, especially as informal networks that provided pirated utilities and services cease functioning.

Since the police invaded and occupied the massive favela of Rocinha in November, the community opened a new cable-TV store, a RicardoEletro, a Banco do Brasil and two private foreign-language courses. Before the so-called “pacification,” the only option to learn English was with tutoring offered at an Internet cafe.

The bright white walls and flatscreen TVs of the language school Skill host full early-morning and evening classes of working-age adults. English is the most popular language course, though the school also offers Spanish, Mandarin, German and Japanese.

Leticia Salustino, a 22-year-old waitress in a sushi-and-pizza restaurant in tourist Copacabana, arrived early on a Saturday morning for her first private English lesson. Two hours of class a week and books costs a monthly 190 reais ($105). “Where I work, there are a lot of gringos,” Salustino said when asked why she enrolled. “People who work there live here.”

Next door to Salustino’s language school is the two-story RicardoEletro, where Elvis da Silva has come to scope out the store’s top smart phones. The copy-machine operator, who works across town, said he is tired of his cheaper Nextel phone, which doesn’t allow him to access Facebook and online chats to talk to his girlfriend during his long trips to work. Since making a local call can easily cost several dollars when made to someone using another service provider, the phones advertise having spots for two SIM cards in order to use at least two operators in one device.

“Nowadays everyone listens to music in traffic on their commute,” da Silva said while choosing a 400-reais ($218) Nokia C3-00.

While teams of sharpshooters and military vehicles rolled up the hills of Rocinha to reclaim it from drug traffickers, they were accompanied by another, weaponless army – more than 200 salesmen from the cable-TV company SKY. Sergio Ribeiro, commercial director of SKY TV, said the company sold more in the eight days after the pacification of Rocinha than it did in its entire previous history in the favela. “With a better distribution of income, people have better access to TV channels,” he added.