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Inside Brazil: Beauty Sales Grow 18% in First Half of 2009

By: Fernanda Bonifacio
Posted: October 5, 2009, from the October 2009 issue of GCI Magazine.

During the first half of 2009 (January–June), beauty sales in Brazil recorded an increase of 18%, according to the Brazilian Association of the Cosmetic, Toiletry & Fragrance Industry (ABIHPEC). Based on these results, the association revised its growth forecast for 2009. “The sector’s performance in the first half year was far above our expectations,” said João Carlos Basilio, president, ABIHPEC. “As sales are traditionally more significant in the second semester, we can anticipate an [actual annual growth] of 11% or more.”

Basilio listed a number of reasons why, despite the global economic downturn, the Brazilian beauty industry has maintained its rapid rate of development. “There is an important economic and financial factor to be considered: worker income has not been compromised. This has, by and large, preserved purchasing power, and the industry does not depend on credit but rather on income,” said Basilio. “There is also a cultural aspect in play, considering that hygiene is a habit that has become part of the routine of the population and strongly impacts the concept of preserving health. In addition, caring for one’s looks helps preserve a positive social image, and also weighs importantly in one’s work environment.”

He also highlighted that beauty companies, as a whole, have decided to maintain investments. Launches and R&D continued at the pace of previous years. “The industry has invested heavily in marketing and advertising, which contributed to reinforce its connection to consumers,” Basilio concluded.

In 2008, the Brazilian beauty industry recorded sales of $10.8 million and growth of 10.6% over 2007. Coincidentally, the average annual increase of the sector in the last three years was also 10.6%.

Natura Opts Out of Venezuela

Despite growth of 19% in the second quarter of 2009, Natura has opted to discontinue its activities in Venezuela. Though the company announced that investments in Mexico and Colombia will be maintained, its plans to begin operations in the U.S. were also postponed.