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Financial Advancements in Latin America's Beauty Industry

By: Christina Kroll
Posted: August 18, 2014

Mexico: Mature Market?

Although Mexico is one of the key markets for the cosmetics industry in Latin America, it is predicted to see the weakest growth of the region in the next five years. A drop in demand and low prices in the sector are thought to be the causes.

It is expected that Mexico’s cosmetics industry will grow by 4.6% between 2013 and 2018, moving from a market value of u$s 10.8b in 2013 to u$s 13.5b in 2018.

In contrast, the sales of the cosmetics and healthcare business in the rest of Latin America, are expected to see an average annual growth of 7.2% for the same period, led by Brazil, (9.3%), Bolivia, (8.8%), Guatemala, (7.5%), and Peru and Venezuela (7.4%). By 2018, the market value in Latin America will reach u$s 111.8b. It is expected that sun care, hair removal, male grooming, baby care, and dental care products will see the highest demand in the region in the next five years.

According to Euromonitor, people in Latin America are also demanding products with multiple benefits, such as anti-aging foundations, nail polish with UV filter, and moisturizing bath products.

Peru’s Luxury Cosmetics Market to Hit US$150m

The Peruvian luxury cosmetics market has been growing at a rate of 20-25% in the last five years (2009-2013), according to estimates provided by the company Estée Lauder. Esteban Antonijevic, Country Manager of Estée Lauder in Peru, told the newspaper El Comercio, that the market was already achieving annual sales of US$150m.

He also explained that, in spite of the significant growth shown in the last years, the luxury cosmetics market in Peru is still far away from the performance of the same market in other Latin American countries such as Chile or Argentina –with US$200m and US$350 annual sales respectively.

According to the figures given by Antonijevic, the demand is led by fragrances, which have 60% of the market share, followed by makeup, an area that has been growing at a rate of 15%.

Antonijevic foresees that the luxury cosmetics market in Peru will continue growing by 20%, and that it will be bolstered by the country's economic stability and by the launch of new brands.

He announced that Estée Lauder was planning to launch the Coach line of fragrances in Peru this year and Bobby Brown in 2015. He also said that next year the company would launch a makeup brand for Michael Kors.

Latin-American Agreement on Regulatory Field

Chile, Colombia, Mexico and Peru –members of the Pacific Alliance- are trying to foster regulatory cooperation in the cosmetics sector. A statement referring to this commitment was made at the IX Pacific Alliance Summit that took place last June 19.

On the basis of this statement, it is expected that governmental authorities will begin to change the regulations currently in force in the four countries. According to the Board of the Council of Associations of Latin American Cosmetics Industry (CASIC), this change and its results will become a regional and global benchmark for future regulatory matters in the sector.