Brazilian Beauty Market Overcame Economic Downturn

Brazil has the most competitive beauty market among other regional areas, yet recent business activities have proved that it has left behind the sluggish economy.

Brazil ranked world’s top 10 by the World Trade Organisation (WTO), yet its international trade is relatively conservative. Brazil has a population of 1.9 billion, a key factor in its quick restoration in economy. Its consumption power has led international cosmetic brands such as Avon and L’Oreal to position it as one of their most important markets.

Not only has Brazil’s rapid economy development in the past five years helped millions of Brazilians to have jobs, it also created a whole new consumer class. Although the economy downturn in last year put this steady growth to a stop, today, many of these ‘neo-consumer group’ are no longer in the shadow of sluggish financial state, instead few are affected by the current global financial milieu.

Total sales for 2008 US$290 billion

According to research organization Euromonitor International, Brazilians find it hard to resist the temptation of beauty and skincare products. In last year alone, the total spending on cosmetics and personal toiletries was a whopping of US$290 billion, this translates to an annual growth of 27.5%. A sales personnel who’ve been in service in the beauty industry said Brazilian women would never step out from their home without makeup on!

This astonishing figure in consumer spending, has escalated Brazil to be world’s third largest beauty market, after the United States and Japan. A point worth noting is, Brazilians’ average income fall way below their counterparts, nonetheless, financial reports have shown that the growth in the first half of 2009 is 18% higher than the same period as of last year. It is expected that Brazil’s financial performance in 2010 will supersede Japan and become the world’s second largest beauty market.

As the confident level and credit demand of Brazilians have restored to the state prior to the recent economic downturn, the Brazilian government has expressed hope in a 1% growth rate in the coming months. Its growth pattern is, however, different from other major economies that are struggling to abandon the downtown.

Brazil has 220 millions frontline sales personnel; these are the people who are selling the products to their relatives and neighbours, from city to rural areas. One fifth of the ‘Avon girls’ are in Brazil, with a population of 110 million.

Avon is in fierce competition with Brazilian brands such as Natura and DBoticario. Natura is Brazil’s largest cosmetics manufacturers, its annual income doubled in the past 4 years. Its annual growth rate in the past one year was almost 100%.

Back