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Markets & trends

Cosmetics ’indie brands’ grow over 40% a year in Brazil, according to a study by Factor-Kline

Focused on digital marketing, these brands are young, independent and work in niche markets. However, they are struggling with regulatory issues and do not have a lot of bargaining power in the supply chain.

"Indie brands" represent only 1% of the revenue in the Brazilian cosmetics sector. However, with 40% growth a year, they have been catching the attention of the market. So much so that they have become the subject of a study published by consultancy company Factor-Kline.

Juliana Bondança Pereira, project manager at Factor-Kline

Juliana Bondança Pereira, project manager at Factor-Kline

In the study, companies classed as "indie brands" were independent brands working in niche markets with a focus on digital marketing. "The companies we looked into are included in these three categories. We consider brands to be independent when they are not managed by their founders and do not belong to any other cosmetics group. They have to cater to a specific market sector - such as vegan, organic or male - and they also need to be active in the digital environment, especially on social media", says Juliana Bondança Pereira, project manager at Factor-Kline in the sectors of Chemicals & Materials and Consumer Goods.

The study split the companies into two different areas. Under "Ethics and well-being" (60%) are the brands focused on hair and skin care which work under claims such as ’free-from’, ’cruelty-free’ and ’natural’. The majority of these brands were founded by women. Under "Specific Needs" are the brands focused on sports, men’s care and vegans. They are usually aimed at beard and hair care and the majority of them were founded by men.

The study shows that almost 90% of "indie brands" opened in the last five years. Even though they were born in the digital environment, 72% of them are also present in physical stores. "They entered the digital environment because that’s where they’d reach consumers who are always on the lookout for novelties and who are aware of what is going on. These consumers are willing to try new products, but they don’t go to the e-commerce platform first. They want to smell it, feel its texture, try it on their skin", says Pereira. "Many brands that initially had e-commerce platform as their only business strategy saw that consumers still go to physical stores".

Another interesting data point is that 90% of the money invested to open these companies came from the founders themselves, many of them guided by their own needs, which were not being met by the industry. "There was, for example, a woman with cancer that needed less allergenic products. In the male market, with the ’hipster boom’, men with long hair and beards had no treatment options in Brazil. The same happened with brands focused on sports. People who practiced sports felt the need for waterproof and sweat-resistant products", says Factor-Kline’s manager.

"These people realized there were many opportunities there and that is what gives a lot of credibility to these brands. It is the founder themselves saying ’hey guys, I use this product, it was made for me and I am now sharing it with you’", says Pereira.

According to Pereira, the movement began with these people and their unmet needs. However, the market is now demanding more. "Generation Z is now entering the consumer market and they have even more specific and demanding requirements from the brands. They want products that can be traced to their origins, that offer green options in their formulas and that are vegan. I believe that in a few years every cosmetics product will have to be vegan", says the manager. "’Indie brands’ meet these needs a lot more often, but big industries are trying to follow precisely because they noticed that this market keeps growing", she adds.

Independent brands are growing, but they also keep facing challenges, such as regulatory issues. "They are very small brands, but they have to meet the same standards as multinational brands," says Pereira. She also mentions how smaller brands lack bargaining power with the suppliers for ingredients and packaging, as well as having low working capital. "When the financial market start to pay attention to ’indie brands’ we will have growth a lot higher than 40%, as nothing else will halt the evolution of these brands", she says.

Renata Martins

© 2019 - Brazil Beauty News -

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