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Inside Brazil: Brazil Set to Become Second Largest Beauty Market

By: Fernanda Bonifacio
Posted: April 7, 2009, from the April 2009 issue of GCI Magazine.

Contrary to pessimistic forecasts spurred by the current global economic crisis, the Brazilian beauty industry’s revenue grew 10.4% in 2008. According to the Brazilian Association of the Cosmetic, Toiletry & Fragrance Industry (ABIHPEC), the sector’s labor opportunities increased 3%, employing more than 3.5 million people—90% of whom are women.

João Carlos Basilio, president, ABIHPEC, expects that the results obtained in 2008 will turn Brazil into the second largest cosmetic consumer market in the world, pulling ahead of Japan and behind only the U.S. “The sales were favorably atypical in December and maintained good rhythm in January,” said Basilio. “The cosmetic, toiletry and fragrance market depends on consumers’ incomes and habits. If unemployment is contained primarily in specific sectors and in large companies, we can still expect an increase in sales.” As most beauty products are bought with cash, credit restrictions haven’t affected the industry; investments are forecasted to reach $300 million in 2009.

Natura Strengthens Position Throughout Latin America

Natura has been strengthening its position in markets throughout Latin America, notably in Mexico. The company first entered the Mexican market in 2004.

According to Rodolfo Gutilla, director of corporate affairs, Natura, the country has proven to be surprisingly receptive to the Brazilian company, with sales well above expectations. “The projects will not only be maintained, but also expanded—the opening of the second Casa Natura outlet in Mexico is one example,” he said. Despite having postponed its incursion into the U.S. market due to the economic downturn, Natura intends to strengthen its position toward North America by investing in a country “that shares cultural similarities with Brazil.” Venezuela and Colombia are also potential growth markets, according to the company.

Overall, Natura’s 2008 numbers show that Latin American revenues grew 38% during January–September 2008, compared to the same period in 2007, to reach $60 million. The company’s goal is to hold a 4.5% market share in Latin America by 2012.

Elizabeth Arden to Reenter the Brazilian Market