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The Beauty of Latin America

By: Cristina Kroll
Posted: November 25, 2013, from the December 2013 issue of GCI Magazine.

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CIC executive president Álvaro Márquez, told GCI the beauty market in Chile had closed 2012 with a retail value of $2.8 billion and that he expected it to top $3 billion this year. The industry accounts for 1.4% of Chile’s GDP, with annual per capital consumption of $160, the second highest in the region after Brazil.

The Chilean chamber also stressed that it had been working with the national government to accelerate its compliance with international regulations. Márquez highlighted Chile’s participation in the Pacific Alliance “in which the four cosmetic chambers involved in the alliance—those of Colombia, Chile, Mexico and Peru—have a complete consensus. As the official position of the cosmetics industry, we are calling for, among other things, the elimination of prior authorizations, a robust system of monitoring in the market based on post-authorization controls, the elimination of certificates of free sale and batch to batch certificates, a harmonized labeling scheme, standardization of ingredients, recognition of best practice, and a harmonized definition of cosmetics and of the permissible variations in soap contents.”

In Argentina, the big investment news came from Unilever, with Argentine president Cristina Fernández de Kirchner herself inaugurating the multinational’s new line of aerosol deodorants in the town of Tortuguitas, in the province of Buenos Aires. The company invested $1.4 billion in what is the largest aerosol deodorant factory in the world, offering a production capacity of 540 million aerosols a year.

This location makes sense for Unilever, as Argentina has the highest per capita consumption of aerosols in Latin America, according to data from the Chilean aerosol chamber. Reportedly, the average person uses 10 aerosols every year compared to 4.6, 3.3 and 2.7, respectively, in Chile, Uruguay and Mexico.

Additionally, Unilever’s launch of Vasenol, a new brand that will be sold only in pharmacies and perfume retailers, demonstrates the company’s continued confidence in the Argentine market. The company is clearly targeting the market for big things.

Colombia, Ecuador Focus on Regulation

It has been a difficult year for the beauty industry in Colombia due to the international financial crisis, but the sector began to a pick up in the second half of 2013.

“We expect increases in production of close to 10%, principally on the back of exports, which have grown 20%,” CASIC president Concha Prada told GCI. “The internal market saw growth of around 3.1% in the first half, but we hope to close the year with internal growth of about 6%.” The numbers are still good for the country, however. In 2012, the beauty market stood at $3.98 billion, accounting for 0.6% of Colombia’s GDP.

A new division for the administration of cosmetics and toiletries within Invima, the Colombian national institute for food and drug monitoring, was created in 2012. “Until last year, cosmetics in Colombia were monitored as a subdivision of medicines, and manufacturers often faced the same demands as they would for medicines. The staff at the new administration have been certified by SGS as ISO 22716 inspectors, which has harmonized the inspection visits,” Concha Prada said. And looking ahead to next year, Colombia is aiming for all private companies to provide social responsibility reports.

Also working on its regulatory efforts, the Ecuadorian Cosmetics, Fragrances and Personal Care Association informed GCI the beauty sector in Ecuador had seen sustained annual growth of about 10% for the last four years, and is expected to achieve 12% growth for 2013. Reportedly, the country’s beauty market is worth more than $100 million, coming in at 1.6% of Ecuador’s GDP.

While ongoing advances in regulation have been significant and helped drive this growth, “During the second half of 2012, the regulatory body in charge of registrations and notifications was closed due to claims of inefficiency and bureaucracy,” explained María Fernanda León, executive director of the Ecuadoran cosmetics association. “In its place, a new safety control agency, ARCSA, is now responsible for the regulatory process and for shifting controls from pre-commercialization to post-registration. This is an international tendency that the industry is aiming for with the objective of ensuring the safety and quality of products that reach the consumer.”

León also highlighted the fact that, in 2012, compulsory sanitary notifications were granted within 24 hours. In 2013, a “one-window” system was inaugurated, reducing the amount of paperwork involved in registering products and obtaining sanitary notifications, which can now be done online.

The system is to be extended to cover certificates of free sale within the Community of Andean Nations (CAN), which create a certificate for products entering the community from third-party nations.

The spokesperson for the Ecuadorean chamber also stressed that the country’s president Rafael Correa had met with those in the beauty and cosmetic sector and was in agreement with the industry’s line. “He was the direct leader of the changes that have been achieved,” León said.

Cristina Kroll is a business journalist specializing in the beauty sector and living in Buenos Aires, Argentina. She has written for the main Argentine magazines related to the beauty business, and was a correspondent for French magazine Beauty Business News.