Latin America – Golden opportunity

Brazil, the third largest cosmetics market worldwide, is leading a personal care golden age in Latin America. But Argentina, Mexico, Chile and Ecuador also offer opportunities for brands.

Latin America is an emerging region with big aspirations including C&T heavyweight Brazil which is aiming to take over the top spot in the beauty market worldwide. Cristina Kroll reports

It could be said that the cosmetics market in Latin America is going through a golden age. The third largest cosmetics market in the world, Brazil, sits at the centre of the region generating huge demand and commercial exchange. According to Euromonitor International, Brazil not only occupies third place worldwide but it is also the first market in perfumery and deodorants and it ranks second for hair care, oral care and sun protection products.

João Da Silva, president of the Brazilian Association of Personal Hygiene, Perfumery and Cosmetics Industry (ABIHPEC), said results were very positive in the first third of 2012 with 11.9% nominal growth and 7.1% real growth. He projects the year will end with around 9% real growth given that Brazilian trade figures in the second semester of the year are traditionally higher than in the first.

The Brazilian personal care industry has grown exponentially in the last decade. In 1996 the country invoiced $2.4m annually, while in 2011 it achieved a total of $14.2m in sales. Overall, growth in the personal care sector was much more vigorous than in other areas of the economy with 10% average annual growth compared to a GDP of 3.1% and annual growth of 2.5% for the industry in general, according to Carla Camporini Leoneli, communication and marketing manager of ABIHPEC.

Over the last five years cosmetic industry prices increased at a lower rate than either inflation or the consumer price index in Brazil – 14.3% compared to the general price index of 35.6%. In addition, accumulated growth for exports of personal care and hygiene products between 2002 and 2011 was 293.5%, while imports increased 340.9% during the same period. According to ABIHPEC data, there are 1,659 companies operating in the personal care products market in Brazil, 20 of which are big corporations with liquid sales of $49.1m, representing 73% of total sales.

However at the same time ABIHPEC warns that the sector may be facing serious problems in relation to registration times and processes, which are in the hands of Brazil’s regulatory agency, the National Health Surveillance Agency (ANVISA). The Brazilian cosmetics association comments that in the regulatory area they are tied to the dynamics of Mercosur (the South American common market) which is currently going through enormous difficulties, particularly with regard to commercial relations with Argentina. Despite this complex scene Brazil is aiming to become the largest market in the world over the next five years.

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