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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 4 of 4
Luxury perfumeries in Brazil have been reviewing their business model. Research shows that, in 2010, fragrances were present in 54% of Brazilian households, while in 2011, the index increased to 60% with a gain of 2.5 million households.
Even with continued growth, strong competition puts pressure on price margins of local shops, which jostle for space with large chains and e-commerce retailers such as Sack’s. The impact is also felt by the increase of Brazilians traveling abroad, as perfumes are common items on tourists’ shopping lists.
Willing to increase their market share, 16 perfumery chains joined forces and created the Brazilian Association of Selective Perfumery Multibrands (ABPS). The group, which includes companies from various Brazilian states, has elected a representative to negotiate lower prices with the suppliers based on higher volume purchases. “We achieved an average discount of 22%,” said Jessica Souza, owner of four stores from the Universo chain. Prices are tabulated for all participating companies and the new model aims to make local stores more competitive in the market.
Fernanda Bonifacio is a Brazilian journalist who focuses on the beauty industry, and has been published in the U.S. and Europe. During 2002–2008, she represented ABIHPEC and its member companies globally.
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