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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.

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With 115 outlets in Brazil, department store Renner bets on a similar strategy, and entered into an e-commerce strategy in 2010, retailing watches and perfumes online. According to president José Galló, the network is already one of the largest sellers of perfumes in Brazil, with more than 20 imported brands, some of which are sold exclusively through the site.

Drugstore chains have also turned to the beauty segment in an effort to increase overall sales, featuring more skin care products and fine fragrances. The performance of Onofre, with five megastores and 34 smaller retail outlets, stands out in this shift, and the retailer also offers beauty services for customers. Approximately 20% of its total sales are now “non-medicinal.”

According to the Brazilian Network of Pharmacies and Drugstores (ABRAFARMA), the fragrance segment has stimulated industry sales as a whole. From January to September 2009, sales of non-medicinal products accounted for 23.9% of total sales in these channels.

O Boticário Opens New Distribution Center

Famous for its nearly 3,000 franchises in Brazil, O Boticário exceeded 2009 revenue forecasts, and reached a growth of 20%. Anticipation of better than expected results led to the opening of its new distribution center near São Paulo, which will double the company’s distribution capacity. With investments of $46 million and 130 square meters of space, the facility is ready to quickly and efficiently answer the demand from O Boticário across the country.

The opening of new franchises in 2009 exceeded previous expectances by 50%, totaling 150 new points of sale. In 2010, the goal is an increase of 17% in revenues and the opening of 110 stores in cities where the brand already operates—as well as in new cities.