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Companies & industry

Contém 1g to open franchise stores overseas and resume online sales by 2016

In tough economic times, it is simply not good enough to keep doing the same thing over and over. With this thought in mind, makeup and fragrance franchise network Contém 1g decided not only to invest in new points of sale, but also two resume two projects that were unsuccessfully implemented in the past: the opening of franchise stores overseas and the launch of an e-commerce platform.

Contém 1g kiosk at Shopping Iguatemi, in Porto Alegre

Contém 1g kiosk at Shopping Iguatemi, in Porto Alegre

Fifteen years ago, the company – whose main channel was direct sales – opened stores in Mexico, Spain and Portugal. Whereas in Brazil fragrances were the top selling products, overseas the focus was on a limited, mass-market makeup range. Sales did not cover the cost of international operations and the stores were closed.

It was time to work on a repositioning strategy. Contém 1g replaced catalogue sales with physical stores, launched new products to target the premium market and expanded its offer of makeup products, which now account for 95% of the company’s revenues, ranking sixth in sales in Brazil. With a more mature approach to business, the company plans to regain overseas markets and open its first international franchise stores in the first half of 2016 to take advantage of the favorable exchange rate.

Contém 1g also wants to resume its e-commerce activity. In 2012, the company launched its online store, but the initiative did not please the franchisees and was unprofitable. The department that managed online sales internally was not cost-effective and expenses were higher than profits. This time, the company opted for a commission-based agreement with an outsourced partner that will be responsible for sales and shipping.

With 170 franchisees and 190 company-owned stores in Brazil – including shops and kiosks –, Contém 1g should open another 20 points of sale by the end of the year and increase its revenues by 10% compared to 2014, when it recorded sales of R$ 152 million.

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