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Companies & industry

O Boticario invests in international expansion and plans to enter Colombia

With around 600 points of sale in 10 countries, including company-owned stores, department stores and multi-brand stores, the Boticario Group is preparing to expand its international operations by entering Colombia by the end of the year.

The third largest cosmetics market in Latin America, with an average annual growth of 10%, Colombia recorded a turnover of $ 4 billion last year, according to the National Business Association of Colombia (ANDI). The dynamism of the industry is supported by annual investments ranging between R$ 80 million and R$ 100 million since 2009, which led the market to triple its sales in the last 12 years.

O Boticario's retail store

O Boticario’s retail store

O Boticario’s arrival to the country, with its range of cosmetics, fragrances and makeup, should further intensify competition among industry leaders Unilever, Belstar SA and P&G. Multinational companies Kimberly-Clark, Avon, Beiesdorf (Nivea), Belcorp and Yanbal are also established in Colombia. Brazilian Natura, which arrived in the country in 2006, announced its goal to achieve a 5% share in the cosmetics market and head the direct sales channel by 2017.

According to Andres Giraldo Torres, o Boticario’s director in Colombia, the group’s goal is to achieve an annual turnover of US$ 80 million to US$ 90 million from 2016, with the opening of 100 points of sale. The strategy is to consolidate the commercial brand’s presence in the country’s major cities to ensure national coverage in the first two years of operations. “We will open five stores in Bogota later this year,” Torres stated in an interview for newspaper Valor Econômico.

Although the Boticario Group has four brands – O Boticario, Eudora, Quem Disse Berenice and The Beauty Box – the Colombian operation will only be launched with products from the O Boticario brand. “We do not rule out the possibility of using other business models available to the group worldwide in the long term, such as direct sales and network marketing. For now, our focus remains on fragrances and makeup,” says Torres.

Besides Brazil, where O Boticario has a network of 3,690 stores and sales of $ 7.6 billion in 2013, Colombia will be the first market in the region in which the company will have a consolidated operation with privately-owned stores. Currently, O Boticario’s operations in Latin America also include Venezuela, Peru and Paraguay. The expansion plan for the region had Venezuela as a priority, but due to the country’s economic instability, O Boticario decided to restructured its business strategy and began focusing on Colombia.

For Chamber of Commerce Brazil-Colombia executive director, Francisco Solano, the Brazilian cosmetics brands will continue on the rise in the country. “Colombia is a priority market for Brazil. O Boticario is an iconic brand and the company’s investments are a show of confidence in our economy and consumption capacity,” says Solano.

In Brazil, 2014 sales should rise less than expected. According to O Boticario’s president, Artur Grynbaum, elections and the economic uncertainty reduced the company’s expected growth of from 18% to 16%. For 2015, retail is expected to increase at an even lower rate. Among the reasons for the slowdown are an increase in inflation and possible price adjustments. During a seminar held at the Latin America 17th Retail Forum, Grynbaum highlighted the resilience of the cosmetic industry, which grows above GDP even in unfavorable times.

Fernanda Bonifacio

Portfolio

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

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