What is so attractive about the Brazilian beauty market?
PC: Brazil has a very beauty-forward, young and affluent population, which provides ample opportunities for the beauty industry in the Brazilian market. Brazil is the world’s largest fragrance market and is expected to become the number two beauty market in the world in the next few years, only behind the U.S.
What is attractive about the fragrance market in Brazil in particular?
PC: Not only is Brazil the largest fragrance market globally, it also has a broad base of fragrance consumption. On an average-volume basis, Brazilians use three times as much perfume as Americans do. All of these factors contribute to the fact that Brazil is a key driver in our growth strategy.
What trends are currently pushing beauty and fragrance products in Brazil?
PC: Along with the increasing affluence of its population, we have seen a push toward premium product consumption in Brazil. This is amplified by the burgeoning youth population—with 100 million people between the ages of 16 and 35, Brazil boasts a fast-moving and trend-forward market.
The combination of young consumers and a culture that emphasizes fragrance creates a real hunger for innovative development and marketing methods. On top of youth, the massive access for women to formal employment in recent years has been a key driver toward the increased consumption of beauty products, as this trend has allowed Brazilian women to gain more autonomy to manage the household budget.
What are the most effective ways to reach Brazilian beauty consumers?
PC: Our strategy is to reach the consumer where they shop. Today, 90% of fragrance purchases are not made in the classic multi-brand retail outlets (including the e-commerce platforms of retailers) but rather in mono-brand franchised stores (Boticario, as one example) or door-to-door. Our strategic alliance with Avon, which holds the largest beauty distribution network in Brazil through its 1.5 million independent sales reps, is a major breakthrough since it will provide access to a selection of the world’s most popular fragrance brands for the first time to the vast majority of Brazilian households—at affordable prices.
We also see digital as a key channel through which to connect with the Brazilian market. Young consumers are keen on digital engagement with brands, and are also more likely to use mobile devices and engage with multiple screens at once.
Creative campaigns that leverage digital will drive engagement with Brazilian beauty consumers in the future. For example, Coty recently launched the #ckmeforme campaign, which uses Snapchat and Tumblr to connect the millennial generation with the CK One fragrance. We launched this campaign globally with celebrities from various countries, and have already seen huge success in interaction with millennials.
Do trends from Brazil affect Coty’s product development and marketing in other parts of the world? If so, how?
PC: Leveraging the latest trends shaping consumer markets is vital to any brand, even a world-renowned and global brand like Coty. We dig deep to look for social patterns to see what’s in the air right now, gauging the trajectory of those trends and helping ensure that we aren’t just thinking ahead but also finding unexpected opportunities to transform our business.
The popularity of several of our brands in Brazil has led Coty’s global teams to adapt their development agenda and take into account some of the specifics of Brazilian consumer needs (i.e., olfactive, formulations, colors, positioning). Some recent global initiatives that have been directly inspired by Brazil include our OPI Brazil color collection and Adidas Get Ready body care collection, celebrating the 2014 FIFA World Cup. Also, many of our global initiatives have to go through some degree of “tropicalization” before they can be launched successfully in Brazil, so our global teams are becoming increasingly educated about the Brazilian consumers, trends and competitive landscape.
Are there ways the Brazilian market is trending ahead of the global beauty market?
PC: Overall, we see a greater focus on sensorial aspects of products (i.e. rich fruity fragrances, colorful packaging, rich creamy textures for body and hair care) for Brazilian consumers. Other notable trends include:
- The power of natural ingredients sourced from Brazilian bio-diversity, which are also becoming popular abroad (i.e., acai, guarana, etc.);
- Openness of women/men to esthetic surgery or dermatological procedures;
- Hair straightening (“Brazilian sleek”).
In body care and hair care, Brazilian consumers are trending ahead of the global beauty market in the immense value they place on these types of products. In hair care, particularly, Brazilian women are ahead of the curve in their emphasis on conditioning. We believe the rest of the world will eventually discover what Brazil has already found in terms of developing multi-product body and hair care regimes.
In the fragrance market, we see the prominence of men—who consume, by volume, 48.7% of fragrances in Brazil—as a harbinger of the global market, with great potential for the male consumer in fragrance.
Are there challenges in the Brazilian fragrance market, and if so, how do you address them?
PC: Our newly formed partnership with Avon was struck to tackle some of these challenges—such as distributing products in such a large market. This agreement increases Coty’s footprint while bolstering Avon’s fragrance offering in Brazil. Brazil is a key driver in our growth strategy, and Avon’s extensive experience in Brazil makes the company an ideal partner.
Additionally, our May 2013 joint venture with Frajo International, a leading Brazilian cosmetics distributor, aims to distribute and market mass/masstige brands in the retail channel. Further, our partnership with Avon Products aims to increase both companies’ global fragrance market share, consumer loyalty and brand appeal in Brazil—our brands should be included in Avon product catalogs in time for the 2014 holiday season. Additionally, our joint venture with Frajo expanded our go-to-market capabilities in the region.