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Avon’s Brazilian Growth May Warrant Second Facility
By: Fernanda Bonifacio
Posted: June 22, 2010, from the July 2010 issue of GCI Magazine.
Hand sorting on one of Avon’s current São Paulo production lines.
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With a market share of 20% in sales of professional products in Brazil, L’Oréal plans to garner a 35% share, equaling its U.S. performance. “We are leaders in the segment, but the Brazilian market is huge, full of opportunities, and we want more,” said Nicholas Hieronimus, president, professional products division, L’Oréal. According to Hieronimus, professional lines sales worldwide totaled €2.4 billion in 2009, which accounted for 14% of L’Oréal’s sales.
Hieronimus said that, in 2009, Brazil was the number one contributor to the company’s growth in absolute terms. In the company’s global ranking, Brazil figures among the seven top countries and it is expected to be in the top five by 2012 or 2013.
Seeking expansion in sales, the company is launching Série Nature, containing silicone-free formulas, natural fragrances, and recycled packaging. But the division should face heavy competition: Revlon Professional has just landed in the country, from a joint venture with International Brands Brazil. Hair care brands Biotera (Shiseido) and TIGI (acquired by Unilever) have also recently started operations and will begin to be distributed by August.
Brazil; Mexico Compete for Sephora’s Entrance in Latin America
Although the news hadn’t been confirmed by LVMH by press time, rumors that the French chain Sephora is considering entering the Latin American market in 2011 stirred the press and fans of the brand in Brazil. CEO Jacques Lévy confirmed the strong performance of the brand in emerging markets. In China alone, where Sephora began operations in 2005, 73 stores have been opened and another 20 are expected by the end of 2010.
Lévy admits that market studies have been conducted for some time, but didn’t confirm whether the gateway will be Brazil or Mexico. If the decision is favorable to the Brazilian market, the opening of a large-scale store will probably be accompanied by an online sales strategy.