Beauty in Brazil, one of the most rapidly developing sectors in the world

27.09.2012 By: Based on an article of Le Monde

Brazil’s population is around 200 million inhabitants, of which more than half are women. It's this half that has been extremely promissing for the make-up sector the last several years.  

According to a study published by the Euromonitor institute in June 2012, the make-up industry generated US$ 43 billion in sales in 2011 (19% more than the previous year). With 10% of the world market, Brazil is now only surpassed by the United States and Japan.

The Brazilian Association of the Industry of Personal Hygiene, Perfumery and Cosmetics (ABIHPEC) attributes this growth to several factors. The most important one is the increased presence of women in the labor market. Economist Marcelo Neri of the Getulio Vargas Foundation endorses this: "Women work more, earn more money and have less children, which allows them to increase their personal income. In fact between 2001 and 2009 women's earnings has risen with 38%, against 16% for men". Other factors are the increase of productivity gained through new technologies and the increasing offer of new products.

Market characterized by structural change
This increase in the beauty sector is directly linked to the improvement in purchasing power of Brazilian people and Latin Americans in general the last decade. In this period about 50 million inhabitants went from poverty to middle class (read more). Economist Marcelo Neri describes this new group of consumers as:"This group belongs to the bottom of the social pyramid and can now begin to consume the products they could not afford before". In fact, for this group of consumers food accounts for a smaller percentage of their household expenditures. Thus, part of their budget can now be dedicated to products of second necessitiy.

Distribution channels are also undergoing changes which foster the implementation of new brands. Door-knocking still occupies an important activity in Brazil. Nevertheless, over-the-counter pharmaceuticals and specialized stores are flourishing in shopping centers. Many American and French brands are already established and some of them are giving Brazil the role of vanguard to establish trends.

Specificities not to be underestimated
Foreign Brands and producers have to adapt their cosmetic formulations to the climate and the type of skin of Brazilian women before distributing their products.
The other major barrier to exporters or investors is the fiscal system in Brazil, known as one of the most complex in the world.

Is your company active in the beauty, cosmetics or perfume business and would you like to exchange ideas regarding your strategy, TRANSFER offers you a free export diagnosis and a quotation for the search of local partners. We also provide permanent assistance in tax and administrative management matters. Contact us for more information.