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Brazil’s Beauty Sales Grow 14.75% in 2009
By: Fernanda Bonifacio
Posted: April 6, 2010, from the April 2010 issue of GCI Magazine.
O Boticário new distribution center near São Paulo, which will double the company’s distribution capacity, was prompted by the company’s 20% growth rate in 2009.
The beauty market recorded an increase of 14.75% in 2009 compared to the previous year. According to data from the Brazilian Association of the Cosmetic, Toiletry & Fragrance Industry (ABIHPEC), the average growth for the Brazilian market had been 10.5% throughout the last 14 years.
The industry was valued at R$24.97 billion, with a production volume of 1.643 million tons (4.5% more than 2008). The three segments of the market, as defined by ABIHPEC) showed similar performances in value terms, with an increase of 14.41% for toiletries, 15.72% for perfumes and 14.95% for cosmetics.
“We expect to maintain double-digit growth for the next five years,” said João Carlos Basilio, president, ABIHPEC. As an example of the positive result, he highlighted the toothpaste category, which grew 17.53% in value and 8.73% in volume. “Although it’s a product with high market penetration rate, toothpaste keeps increasing continuously, showing that there is potential for other categories as well.”
As for distribution channels, the sales breakdown is: 33.96% via retail, 30.76% wholesale, 29.89% direct sales and 5.26% franchise. The trade balance was positive at $131 million. The dollar devaluation, however, has undermined beauty exports, which closed 2009 with a drop of 15.5% in volume, totaling $587 million. Imports also fell 9%, reaching $456 million at the end of 2009. However, in January 2010, there was an increase of 17.8% in exports, compared to the same month of 2009. “If we keep this pace of growth until the end of the year, we may overcome our [export] forecast of $700 million” said Basilio.
Procter & Gamble Creates Strategies to Grow in Brazil
Since its purchase of Gillette in 2005, Procter & Gamble has gained momentum in Brazil, with a growing product portfolio. Nevertheless, Brazilians’ annual spend on P&G’s products is not even half of Mexicans’ and a tenth of Americans’.