Most Popular in:

BRIC

Email This Item! Print This Item!

Beauty Sales Post Greatest Growth in Volume Terms in Five Years

By: Fernanda Bonifacio
Posted: March 2, 2012, from the March 2012 issue of GCI Magazine.

page 3 of 4

The crux of the effort is the introduction of two brands new to the Brazilian market: TRESemmé (the second best-selling brand in the U.S.) and Keratinology by Seda (Sunsilk brand in Brazil). According to Marcela Mariana, marketing director for hair care at Unilever Brasil, the company intends to gain 5–8% of market share over the next two years through the launches.

Brazil has the world’s third largest hair care market, with annual sales valued at R$6.5 billion. Hair care products represent 38% of Brazilian women’s average expenditure. According to data from Kantar Worldpanel, lower middle class expenditures on hair care products doubled in the past six years. In 2011, around 7.2 million households spent more than R$150 per year on hair care.

Franchised Bricks-and-Mortars Post Higher Growth Rate Than Direct Sales

Beauty sales by direct selling companies grew only 4.3% in January–August 2011 over the like period in 2010. However, franchised brick-and-mortars posted a striking performance, with sales increasing 31.7% over the same period, according to ABIHPEC.

In 2011, Avon and Natura had missteps trying to modernize their operational logistics. Drops in sales and supply problems in Brazil had a strong negative effect on Avon’s yearly results, leading the company’s growth in Latin America to slow to below double digits for the first time in more than ten quarters.

“Some companies have been through many structural changes, which has led to a more modest growth than we anticipated,” said Rodolfo Guttilla, vice president, Brazilian Association of Direct Selling Companies (ABVED). Despite the tepid performance in 2011, Guttilla still considers the direct selling channel as a winner. Brazil is the world’s fourth largest country in direct sales, having ended 2011 with more than three million consultants.

Perfumery Chains Join to Seek Price Reductions

Want to See More Articles Like This?

Subscribe to the e-newsletter for free and receive news, articles and headlines just like this, delivered directly to your inbox.