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Beauty Inc issue 11/13/2009

Brazil is quickly heating up the world stage as the recent winner of the 2014 World Cup and 2016 Olympic Games. As all eyes in the sports world turn toward the beauty-obsessed nation, cosmetics companies are likely to follow. Already the leading global player in Latin America—thanks in part to a culture that puts a premium on looking good—Brazil’s cosmetics and toiletries market ranks third in the world, according to Euromonitor International, trailing only the U.S. and Japan, with sales of about $29 billion in 2008, up 10.4 percent from 2007. And if previous Olympic Games are any indication, it’s only a matter of time before dominant international brands such as Avon, Procter & Gamble, Unilever and Colgate-Palmolive, which collectively control 32 percent of Brazil’s beauty market, begin to cash in on all of the attention.

This story first appeared in the November 13, 2009 issue of WWD. Subscribe Today.

 

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“Sponsorship is going to be key,” says Euromonitor’s Brazil analyst, Marcel Motta. “We’re going to see Gillette and P&G trying to be at the center of this.” The 2008 Beijing Olympics witnessed a slew of Chinese-themed products and sponsorships, where industry sources estimated that beauty brands invested roughly $10 million in ad campaigns and up to $2.5 million in team sponsorship. L’Oréal, for instance, whose Lancôme label is the number-one prestige brand in Brazil, was the cosmetics sponsor of the Chinese badminton teams. Avon, the largest international beauty brand in Brazil with 8.6 percent of market share and 1.1 million sales reps, ran a campaign with three Chinese divers dubbed the “Dream Team of China” to tout its franchises. P&G execs say it’s still too soon to make marketing plans for Rio, but the company—already an official sponsor of the U.S. Olympic team for the Vancouver and London games—has signed on U.S. Olympic speed skater Allison Baver as the face of P&G Beauty brands such as Cover Girl, Olay and Pantene during the 2010 winter games.

 

Beyond sponsorship opportunities, some industry experts say the upcoming Olympics in Rio could open up Brazil’s beauty market, which, because of extremely high import taxes and complicated distribution channels, is dominated by mass market products and direct sellers. “Hopefully, with Brazil going into this international arena, we’re going to see more of the slashing of taxes in the next few years so that there will be more opportunities for premium brands to sell at a competitive price,” says Motta. “It might be a good chance for the federal government to really open up the economy.”

 

With or without the Olympics, beauty companies have been targeting Brazil, and will continue to do so. “There is so much opportunity to tap into in these countries,” says Doneger Group creative director Jamie Ross. “With Brazil in line with the Olympics, it will put that much more of a push on it.”

 

That, and the premium Brazilian women put on beauty. “They’re always going to indulge themselves,” says Motto. “That’s part of the culture.”

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