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Markets & trends

Health and Beauty is the third most sold category in eCommerce

The Health and Beauty category ranks third in online sales in Brazil, with an estimated turnover of R$ 4.7 billion in 2014. According to the Brazilian Association of Electronic Commerce (ABComm), the segment represents 12% of domestic revenues generated from online sales, which are expected to reach R$ 39.5 billion this year.

President of ABComm Mauricio Salvador

President of ABComm Mauricio Salvador

The beauty industry follows the rise of the eCommerce segment in Brazil. According Mauricio Salvador, president of ABComm, the estimated sales value for 2014 (R$ 31.11 billion) is 27% higher than the one recorded in 2013. In the first half of the year, during which the market is less heated, it summed up to R$ 17.7 billion. The growth in 2013 was also significant: 29% over the previous year.

The good performance of the market attracts new investors, such as business partners Lucas Lima, Pedro Prellwitz, Flavia Mussalem and Leandro Grespan, who gave up their careers in law, economics and business administration to launch their own online business. In late 2012, they founded Men’s Market, a website that specializes in the eCommerce of beauty and personal care products for the men’s grooming market, working with over 60 domestic and international brands.

Men’s Market founding partner, Lima reveals that he perceived the potential of the market primarily due to hurdles in finding the personal care items he wanted on the Internet. “As there were not many options in the market, Pedro and I used to buy a lot of products overseas, until we realized that it made no sense at all," he says. "Someone had to set up a company that made beauty and personal care products accessible for all men in Brazil.

Men’s Market offers around 1,500 products and has over 10,000 active customers in its database who purchase, on average, 5,000 items per month. In 2013, the company’s first year of operations, its turnover was R$ 2 million. In 2014, Men’s Market received an investment of R$ 3 million from Dutch investor Kees Koolen, founder of the Booking.com website. Thus, the growth estimate for this year is even more ambitious, with estimated sales of R$ 7 million.

Men's Market founding partner Lucas Lima

Men’s Market founding partner Lucas Lima

We chose to work with eCommerce because the Internet supports very rapid growth. One of the goals of our business is to reach men throughout Brazil, allowing them to look after their appearance and style. To reach the same audience with physical stores would be much more expensive and virtually impossible,” says Lima.

Avon has also recently announced it is set to start an eCommerce operation in Brazil. To begin with, the company will market the products of its newly-launched makeup range Luxe, while other items will continue to be sold only through Avon’s catalog.

To establish an online channel in Brazil, its largest consumer market, is an old aspiration of Avon, but the company had been postponing its entrance into the segment for fear of creating competition among their consultants.

By investing in online sales, Avon follows the trend started by its biggest competitor in the country, Natura. After one and a half years of tests in the cities of Campinas and Sao Jose dos Campos, in the Sao Paulo countryside, the company expanded the Rede Natura (Natura Network) program statewide in July. The digital platform enables Natura’s consultants to offer their customers the convenience of online payments, while delivery is made directly by the company.

According to Alessandro Carlucci, former president of Natura, the company has identified an opportunity to progress in their business model. "We want to strengthen our consultants’ role by offering an additional option for consumers. We have realized that part of today’s relationships takes place through digital technologies and social networking, which leaves room to broaden the meaning of our vocation to operate at a network level," adds Carlucci.

Aline Quezada

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© 2014 - Brazil Beauty News - www.brazilbeautynews.com

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