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Essence enters the Brazilian market hoping to become the largest cosmetics company in the world by volume

Ongoing portfolio changes, accessible prices and in-country manufacturing are some of the strategies the German company plans to deploy to become an industry leader in Brazil in the next five years.

After entering the US and Italian markets, German group Cosnova Beauty will now be expanding their operations to Brazil with their makeup brand Essence. The company has had Brazil on its radar for a few years and made its final decision last year, when its sales outside Germany grew by a record 18.6%, according to figures published by Nielsen.

Tatiana Sombra, marketing manager at Cosnova Brasil

Tatiana Sombra, marketing manager at Cosnova Brasil

We believe now is the time to do it. Brazil is one of the most important cosmetics markets in the world, so Essence will have many opportunities as it launches in the country,” said Tatiana D’Alessio Sombra, marketing manager at Cosnova Brasil. “We are very excited and confident that our new Brazil operation will help us achieve our goal of becoming the leading cosmetics company worldwide in terms of volume.” In Brazil specifically, the goal is to have Essence figure among the top five leading industry companies within five years.

The company has opted to ship all products directly from Germany to set up their brand new operations in Brazil. Essence outsources all manufacturing, since it does not have production plants of its own. In Brazil, it will start by selling around 300 of their nail, lip, eye and skin makeup products (out of a portfolio consisting of more than 800 products).

The diversity of the Essence product range, which is geared towards younger consumers, is one of the brand’s main strategies to stand out among the competition already in place in Brazil. “Our business model is based on innovation - 50% of our portfolio is renewed every year. We also launch limited editions every two months. Brazilian women traditionally like having this much variety, because they are always in search of new products,” said Sombra.

According to her, approximately two-thirds of all company employees work in innovation, analyzing and researching the main global fashion and beauty trends, as well as consumer behavior and desires, in order to develop new product lines. “It is an ongoing, rigorous process.” Sombra also said that Cosnova Beauty has already determined the items that will be launched or discontinued in its two upcoming six-month collections.

Essence’s other big draw is its price-point. In Europe, the company is known for its reasonable prices, which it assures will be maintained in Brazil, despite the recent rise in the US dollar exchange rate and the high import duties levied on foreign products. “Essence’s market positioning will be strategic and competitive, with accessible prices, starting from R$ 5.90 for nail polishes and going up to R$ 42.90 for liquid foundation,” said Sombra. “We are investing long-term in Brazil, and our plans will not be affected by fluctuations in the exchange rate. Our production scale offsets our import duties.

To distribute its products in Brazil, the company has formed partnerships with local companies. A logistics company will import and disembark all products, while a second company will be responsible for product storage. According to Sombra, product distribution in Brazil will follow the company’s international commercial planning guidelines, with items being sold at drugstores, department stores, cosmetics stores, fashion chains, and online shops, as well as through their very own e-commerce platform. Currently, Essence products are available at large cosmetics stores in São Paulo, such as Sumirê, RaiaDrograsil’s online shopping platforms and the website Beleza Web. In 2019, sales will be expanded to Rio de Janeiro, Minas Gerais and Espírito Santo, after which they will go nation-wide.

Sombra also said that in the near future Cosnova Beauty will start looking for local partners to develop and manufacture their products directly in Brazil. “We want to effectively identify and address the needs of Brazilian consumers,” she said.

Renata Martins

Portfolio

© 2018 - Brazil Beauty News - www.brazilbeautynews.com

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