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Latin America: Beauty, The In Business
By: Briony Davies
Posted: November 7, 2006, from the November 2006 issue of GCI Magazine.
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Moreover, the strong performance of Brazil, which accounted for some 47% of value sales in Latin America in 2005, assisted the region’s expansion. Brazil’s cosmetics and toiletries sales registered an impressive positive performance in 2005, with sales up 15%. The performance is explained, in part, by stable prices that rose below the rate of inflation. An appreciated Real vis-à-vis the U.S. dollar has brought stability to the prices of premium-imported products, underpinning a price-led increase in demand. It also has kept the cost of imported raw materials in check.
Mexican cosmetics and toiletries sales grew a healthy 6.5% in 2005, quashing initial rumors of a lack of dynamism. While depilatories, sun care, hair care and oral hygiene presented high growth rates, other sectors such as bath and shower products and color cosmetics presented slow growth.
Product innovation dictates sales trends as Mexicans demand new products suited to their particular needs. For example, styling agents have gained popularity as both young men and women are exposed to international fashion through mass media. Also, the recent international concerns about skin cancer contributed to an increased awareness and consumption of sun care products, as well as leading to the importance of SPFs in facial skin care formulas.
The country has a large youth population with growing purchasing power. Additionally, the consumer base of 30 to 45-year-old people is increasing, spelling great potential for players in hair color and skin care products that nourish and provide antiaging and moisturizing benefits. Women are the main decision-makers in the purchase of cosmetics and toiletries for the family, thus dictating shopping patterns for skin and hair care regimens to other family members.
The Venezuelan market for cosmetics and toiletries is the most dynamic in the world. The Venezuelan government has launched social plans aimed at improving the quality of life for low-income consumers, and this has translated into significant improvements in the purchasing power of the largest segment of the population in 2005. Accounting for 81% of the population, low-income consumers took advantage of plans such as MERCAL (Mercado de Alimentos CA), allowing them to purchase subsidized food and basic personal care products. These savings, coupled with cash payments disbursed to participants of social programs, significantly increased the disposable income of these consumers and allowed them to make aspirational purchases in color cosmetics, hair care and skin care.