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Markets & trends

More demanding, Brazilian consumers invest in imported cosmetics

The cosmetics industry has seen considerable growth in Brazil in recent years, and not only in figures. The industry, which since 1996 has recorded annual average growth of 10% and in 2013 alone had a turnover of R$ 38 billion according to Euromonitor, has also evolved in terms of quality. Investments in innovation, infrastructure and development have carried the national beauty industry to a level of excellence that is now comparable with that of the major international brands.

Breno Salek, Marketing and Sales Director at The Beauty Box

Breno Salek, Marketing and Sales Director at The Beauty Box

With higher income, Brazilians are continuing to purchase cosmetics, and are becoming increasingly more demanding and informed about new products in the market, opening space (and their purses) for imported goods. According to the Secretary of Foreign Trade, in 2013, Brazil imported more than US$ 687 million in beauty products.

Imported items are much sought-after by Brazilians, but we have seen that our consumer prefers to have a mixture of local and imported brands in her beauty basket,” says Breno Salek, Marketing and Sales Director at The Beauty Box, Boticário Group’s multi-brand retail chain.

Launched in November 2012, The Beauty Box sells international designer-label products, such as Dior, Carolina Herrera and Lâncome, alongside Brazilian brands like Phebo and Granado, as well as own-brand products by Eudora, Quem disse Berenice?, and the newly launched Produtinhos da Beauty. “We want to increase our diversity. We saw that there was no store in the country that could provide a unique buying experience, bringing together well-known international brands, debutants in the Brazilian market and renowned national brands, all in one place. We decided to invest in variety, convenience and an affordable price range to suit all pockets,” says Salek.

Now with 17 stores operating in Brazil, The Beauty Box wants to attract the public won by French cosmetic chain Sephora. The world’s largest beauty retailer landed in Brazil in July 2010, when it acquired Sack’s, the leading online beauty retailer in Latin America at that time. Two years later, Sephora opened its first store in the country, creating great excitement among consumers.

The Beauty Box store at Mooca Plaza Shopping

The Beauty Box store at Mooca Plaza Shopping

With more than 100 luxury brands, in addition to its own (Sephora Collection), the retail chain – now with 10 stores in Brazil – serves a public that is eager for new launches and exclusive products, and which appears not to mind paying the price for it.

A study carried out on Sephora’s online stores showed that the same perfume, Dolce & Gabbana Light Blue for Women (25ml), was on sale for US$ 50 (around R$ 112) on the American website, € 49.50 (around R$ 150) on the French website, and R$ 205 on the Brazilian website.

Why such a big difference in price? Firstly, due to Brazil’s high tax burden, which represents around 33% of GDP. Then there are the import duties, which are over 70% for cosmetics and perfumes, as well as infrastructure problems, which raise freight rates. In addition to all these hurdles is the so-called “Lucro Brazil” (Brazil Profit), as the profit margin in Brazil is much higher than that of Europe and the U.S.

It is not by chance that Brazilians spend so much when they travel abroad. In April, US$ 2.344 billion was spent abroad, setting a new record for the country. Since the Central Bank first started compiling data on spending abroad, in 1947, the highest value had been US$ 2.29 billion, in October 2013. As for the duty free zones, where items cost around 30% less, investments continue to rise. The Dufry chain, whose largest store worldwide was located in the São Paulo International Airport, launched a new store at the newly inaugurated Terminal 3 of the same airport, in May.

Renata Martins

Portfolio

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

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