Eduardo Paes (L) is the mayor of Rio de Janeiro, the city where 1,4 million people live in favelas.... [+]
There are more people living in favelas in Brazil,11.4 million individuals, than people living in Portugal, home to 10.6 million. In Rio de Janeiro alone 1,4 million people are living in favelas. If the favelas in Rio were a city, it would be the 9th most populated in Brazil.
Rio de Janeiro is famous for its natural beauty. The New York Times has recently listed Rio as the main touristic destination of 2013, the “wonderful city” also heads Forbes list of the “World´s happiest cities." However, Brazil´s second largest city is also notoriously surrounded by slums or shantytowns called “Favelas,” which basically consist of settlements within the city, usually located on hills or risk areas, and are home to a poor and marginalized population. Favelas were characterized by unstable housing, little or no public security, lacking of basic social services, and a predominance of informal commerce and illegal transactions, dominated by armed criminal gangs. To have a clear picture of a favela, watch one of Brazil’s best movies ever, City of God.
Brazil´s government has successfully launched Pacifying Police Units (UPP in Portuguese) to transform favelas that were perceived as no man's land, where drug dealers rule, into just poor but safe neighborhoods. The successful installation of UPPs has transformed favelas, which have been renamed communities, a term considered more politically correct by Brazilians. One of the key people behind the successful installation of Police Pacification Units (UPPs) has been Rio de Janeiro’s mayor Eduardo Paes, who was reelected last year winning 96 out of the 97 regions. In this informative TED talk, mayor Eduardo Paes shares big ideas about his main mission: to ensure Rio’s renaissance and to leave a long lasting positive legacy as the city hosts the final match of the World Cup of Soccer in 2014 and the Summer Olympics in 2016.
The favelas where UPPs have been successfully installed have started to be seen as new untapped markets. Favelas inhabitants no longer need to get out of the communities to buy goods and services as companies have started to open branches inside of the pacified communities to reach those consumers at the bottom of the social pyramid. The strategies employed to reach potential clients in these up to now neglected regions go from setting up shops to marketing products/services directly to supporting events.
Setting up shops in the pacified communities
According to a survey conducted by Instituto Datapopular, Rio’s communities generate revenues of about R$ 13 billion per year. Major companies want a slice of that huge market and have been opening shops in areas formerly dominated by criminal factions. Today, local minimarkets share the communities’ streets with large companies. For instance, Ricardo Eletro, a large retailer, has invested over R$ 1 million in only one location in Rocinha, South America’s largest favela. Ricardo Eletro is not the only retailer investing heavily in favelas. Casas Bahia has recently opened a shop with an area of 1,400 square meters in Rocinha. "For 60 years, Casas Bahia has been with these people who now have a better opportunity to spend. (...) With the opening of the shop in Rocinha, we come even closer to them and where they live," explained Michael Klein, Chairman of the Board of Directors of Viavarejo – the holding company that owns Casas Bahia and Pontofrio.
Banks have also started to open branches in the favelas, something that would be unimaginable a few years ago. Banco Santander has opened a branch in Vila Cruzeiro, a community located in the slums complex of Penha, with a population of approximately 50 thousand people. Besides financial services, the company has entered into a partnership with the NGO AfroReggae and will offer the residents of Vila Cruzeiro not only online language and professionalization courses but also international scholarships over the next five years. Santander bank will also grant scholarships to the Babson College online entrepreneurship course.
Relationship-building Events
Companies have also been sponsoring sporting events held within the communities. In partnership with the Indoor Soccer Federation of Rio de Janeiro, TenSports marketing, a sports marketing company, organizes the Pacified Rio de Janeiro Cup (“Taça Rio Pacificado”). The 7 on 7 indoor soccer tournament takes place in pacified communities and relies on the participation of the 4 major soccer teams in Rio de Janeiro: Flamengo, Fluminense, Vasco da Gama, and Botafogo, and 4 other teams: América, Olaria, Madureira, and Bangú.
The “Pacified Rio Cup” aims to be more than just another one-time event. The project calls upon the private sector to take part in the social transformation by providing construction or renovation of the local soccer fields, which will stay in the community long after the cup is over. Moreover, in partnership with the residents’ associations, the project will recruit residents to collaborate with the renovations, thus generating temporary work opportunities for locals.
Just like Eduardo Paes wants to capitalize with the Olympics games to leave a legacy and revolutionize Rio de Janeiro, I believe the Pacified Rio Cup has the potential to leave long lasting improvements in the communities. For instance, Bayern Munich, one of the best soccer clubs in the world, received a large sum of money for naming its state-of-art stadium Allianz Arena. The large financial services provider Allianz purchased the rights to name the stadium for 30 years. Following Allianz example, thanks to “Pacified Rio Cup” I imagine companies paying large sums and building amazing soccer fields in the favelas in exchange for publicity.
“It is a win-win situation for both the companies and the people living in the communities. People in the favelas will not only enjoy great soccer matches with the presence of their idols but also have great soccer matches. Long after the Pacified Rio Cup is over, it will leave legacies for the communities such as the renovation of the playing fields and the opening of soccer schools in the favelas. Private companies will be the main responsible for this revolution. ” told me Mr. Hutchmacher the executive director of Tensports Marketing.
It is like a new city has been born within Rio de Janeiro as a result of the pacification initiatives and companies are figuring out how to best attract the opportunities there. In the TED talk, Eduardo Paes sums up this piece, “Favelas [slums] are not always a problem. Favelas can sometimes really be a solution.”
