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Brazil Poised for Ongoing Double-digit Growth

Posted: May 9, 2008
Continued expansion in the Brazilian economy has afforded cosmetics and toiletries marketers one of the most robust markets in the world in recent years, according to new data compiled by global consulting and research firm Kline & Company. With nearly 14% growth in cosmetics and toiletries sales in 2007, Brazil now ranks fourth in the global market and is poised for further double-digit growth in the next five years.

The burgeoning middle class and increased consumption levels, coupled with GDP growth of 5.4% in 2007 and a more potent Real, has boosted Brazil ahead of France and Germany in terms of cosmetics and toiletries sales for the first time since Kline started examining international cosmetics and toiletries markets. According to data collected for Kline's Global Cosmetics & Toiletries 2007 market report, sales topped out at BRL 22,822 million ($11.69 million) at the manufacturers' level.

Sergio Rebelo, managing director of Factor de Solucao, (Kline's affiliate based in Sao Paulo) says 2007 was the year of the "big, old-school" multinational company in Brazil, with top-tier firms growing faster than smaller players.

"The movement was led by companies such as Avon, which managed to increase sales by more than 26% after years of poor results in Brazil due to fierce competition with Natura," Rebelo said. "Avon's success came through a restructuring strategy that renewed the company's portfolio, increased media expenditures and strengthened its relationship with sales representatives."

Other global players such as L'Oréal, Beiersdorf and Unilever have also dialed up the competition with innovative products and heavy media investment. "On the other hand, 'the Brazilian Star,' Natura, lost some of its shine and was unable to maintain the huge growth rates it enjoyed over the last few years, with sales up only 9.5% in the domestic market," Rebelo said.