Euromonitor International data state that Brazil’s 2012 turnover in the toiletries, fragrances and cosmetics (HPPC) sector was 41.7 billion dollars, bringing Brazil into third place worldwide, behind the US and Japan. The Brazilian market represents 11% of the world market (with only 3% of the population) and forecasts have Brazil overtaking Japan by 2020 to become the world’s second-greatest HPPC market.
Assessing the HPPC segments one by one shows that Brazil is also a leader in several of these. It’s the largest world market in fragrances and deodorants; the second biggest market in men’s products, children’s products, bath products, depilatory products, sunscreen and hair products (this latter segment is expected to overtake the US by 2017); the third-largest world market in makeup and oral hygiene products and the fourth largest world market in skin products.
Second only to the US, Brazil is also on course to become the world leader in the hair products category. It is already an international point of reference in hair treatment, particularly in the Middle East and Europe, thanks to the appeal of keratin, argan oil and murumuru. Brazil is also a world leader in mass-market cosmetics, benefiting from its vast teen and youth market (Generation Y), which has made these segments very important ones for companies.
Cultural and climatic factors favor the consumption of HPPC products in Brazil. In Brazil men and women invest time and money in personal grooming. The warm and humid climate leads many Brazilians to wash their hair every day and use styling products especially developed for this market. Brazilians bathe two or three times a day.
Without a doubt, Brazil’s middle classes have been one of the biggest drivers of the HPPC market over the last few years. This group, which could previously only afford to purchase basic day-to-day items, has come to consume more personal grooming products. In sum, some factors behind the consecutive two-figure growth of the industry over the last 17 years have been:
- Increased life expectancy;
- The growth of Class C;
- The modernization of factories; and
- Gains in productivity.
The investments show innovation to be a true focal point of the sector. In 2012, HPPC industries invested R$ 13.6 billion in assets, Research & Development and Trademark Strengthening, an 18% higher total than 2011. Of this, R$ 3.3 billion were in assets, R$ 800 million in research and development and R$ 9.5 billion in trademark strengthening.
The Euromonitor Research Institute says 2012 was a disputed year for the market leaders of Brazil’s beauty market. This competition reflects the market share of the sector’s five biggest companies, in line with their ranking.
According to Abihpec (the Brazilian Association of the Toiletries, Fragrances and cosmetics Industry), Brazilians spend on average R$ 150.00 per month on beauty products, which they consider powerful allies in raising self-esteem.
Trends and Opportunities
For the new consumers emerging in economic terms, the focus of the new products is, quite rightly, popularizing luxury and making it available for buyers who are increasingly keen to acquire the latest things. Euromonitor also states that masstige (mass+prestige) cosmetics had better growth than luxury cosmetics up to 2016.
There is also a great opportunity for countries such as Brazil to expand their multipurpose cosmetics market. People increasingly wish to use a product with several benefits, one that’s easy to use and with a reduced application time.
Body care products continue to lead the segment (53% in 2012 and 58% in 2017), while facial care products need leading companies to tweak their category planning to make the prices more competitive and so beat the competition entering the market.
Anti-ageing products aimed at older women are an excellent opportunity to increase this category as they have formulations with higher added value than others. Another public consumer in the skin care category is Generation Y (Millennials, 20-33 years old, according to Mintel) who, again according to Mintel, take great care over their appearance and don’t mind paying more for a better quality and beneficial product that raises their self-esteem even more.
Source: ABIHPEC’s III Book of Trends 2014-2015