Legislative Changes in Ecuador Impact Beauty Imports

Efforts to change import legislation could benefit the Ecuadorian beauty industry in the second half of 2009. In 2008, the beauty industry in Ecuador accounted for sales of $400 million. “Growth outlooks for 2009 were very generous, but restrictive measures applied to imports, which went into effect January 2009, changed this scenario—impacting the Ecuadorian beauty industry during the first half of 2009,” María Fernanda León executive director of the Chamber of the Cosmetic Industry of Ecuador, told GCI magazine. However, multiple complaints from the beauty industry led to changes in the legislating, and the industry can now, as of the second half of the year, import products without limits. In light of these positive changes, León was very optimistic, noting that, “The beauty industry in Ecuador is expected to grow 20% by the end of 2010.” “Direct sellers remain strong, and local production is being boosted as a way to promote the national industry,” said León. “The Ecuadorian beauty industry still faces the huge challenge of producing local cosmetics at international standards.” In order to accomplish this goal, “The strategy is to get taxes for cosmetics raw materials to drop or reach 0%, allowing local production to become more competitive,” León said.

Positive Growth Expected for Chilean Beauty

The Chilean beauty industry is expected to grow 2–2.5% in 2009. “This is one of the sectors that will probably finish the year [on an upswing],” Álvaro Márquez Labarca, executive vice president of the Chamber of the Cosmetic Industry of Chile, told GCI magazine. “In general, this sector continues to grow on strong launches and heavy investment advertising.” However, Márquez Labarca stressed that, “The local cosmetic industry is importing more than exporting, and that is the reason why it stood strong during 2008, accounting for $370 million in imports against $56 million in exports.” Overall, retail sales in Chile were $1.7 billion in 2008. “Chile is the second behind Brazil in Latin America in per capita consumption ($89),” Márquez Labarca added.

Beauty Retailers See Sales Boost During Argentine Children’s Day

Aiming to overcome strong economic headwinds, Argentine beauty retailers created special promotions for Children’s Day, a celebration celebrated annually on the second Sunday of August when Argentine families shower children with attention and gifts. Firms such as Puig and L’Oréal, notably, made efforts to capitalize on the holiday by promoting products specifically designed for and marketed to children. Promotions were available across retail channels in attempt to reverse the downward sales trend, compounded by a health authority recommendations that Argentina’s citizens avoid unnecessary public agglomeration due to the H1N1 flu—which hit the country particularly hard and, subsequently, impacted demand for products deemed unessential.

J&J Brand Launches in Argentina

In June, Johnson & Johnson Consumer Companies’ RoC brand introduced CompleteLift Day to Argentina at a press event in Buenos Aires. The product is a face cream that combines THPE and an extract of the bugrane plant to produce a skin-lifting effect on the face. “Argentina is the first country in Latin America to which RoC brought this exclusive innovation from France,” said Victoria Wood, brand manager, Johnson & Johnson Argentina. At the product presentation, Graciela Cuomo, a dermatologist from the Hospital Italiano of Buenos Aires, offered a description of skin damage at different life stages and outlined the current treatments and products for skin care.

Rouge Continues Business Expansion

Rouge, a leading chain in Argentina’s competitive cosmetic and fragrance retail market, recently opened a store in the Dot Baires shopping mall, located in Buenos Aires. Rouge now has 25 retail locations in the country, including the three previous doors opened in 2009—one each in the two major cities in Buenos Aires province, Mar del Plata and La Plata—and another in the Neuquén province. Rouge also has upcoming openings in Buenos Aires, in the Chubut province and in Rosario City in the Santa Fe province.

In addition, in 2008, Rouge launched a spa/restaurant location in the Galerías Pacífico shopping center as part of a strategy to attract consumers with higher-spending powers and capture a larger portion of the luxury market. And in fact, the continued growth of the company may validate the gambit.

Genomma Purchases Men’s Line

Mexico-based Genomma Lab acquired the male personal care brand Jockey Club for $3.1 million. In the short term, the move is part of a strategy to increase the company’s market share of the hair care, talcum powder and fragrance categories. Longer term, the company plans further development of the brand, including repositioning. Jockey Club’s 2008 net sales totaled $2.4 million.

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.

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