June 09 2015 Behavior

Brazilian Lifestyles and consumption point out to moderate growth of 10.25 per cent up to 2019

In the newly released report by Mintel, Brazilian Lifestyles report, covering every sectors of the country consume sectors, the market research agency estimates that, despite Brazil experiences an economic crisis, some areas present better performance than others. According to it the sectors which will stand out in the next four years, in terms of opportunities, include Beauty and Personal Care and Household Care..

The agency evaluates that the beauty and personal care market should continue to grow at a more moderate pace compared to previous years,  expected from 2015-19 is 10.2%, to R$ 107.3 billion in 2019, if compared to an annual growth of 13% from 2010-14. This more moderate growth is mainly caused by high inflation, increased tax rates on cosmetics and the deceleration of credit and income - factors that are related to the federal government and not the competence of industry in the country. Thus,  when compared to other sectors, the BPC category is the one which shows the highest predicted growth between 2014 and 2019: 63%.

In Brazil, recent years have been many changes in the beauty and personal care market, reflecting in its development. According to Mintel Report, from 2011-12, the market grew 16%, and from 2012-13, 13%. Already in 2014, the market grew 10.8% compared to 2013, to R $ 66 billion. Some categories suffered more with the economic slowdown and high inflation, which resulted in a significant decline in consumers’ purchasing power. For example, the body care retail market grew 16% from 2012-13 and it is estimated that it has grown 14% from 2013-14, to R$ 4.096 billion.

For 2015, the agency predicts growth of 12% compared to 2014, according to the report Mintel’s Bodycare, Brazil – January 2015. However, other categories that are considered to be essential by Brazilians, such as deodorants, shampoo, and conditioner, continued to grow at a significant pace during the last few years. According to Mintel’s Deodorants, Brazil – July 2014 report, for example, estimated growth was of 18.1% in 2014, to just over R$ 6 billion.
"Amidst the economic downturn Brazil is currently going through, it is possible to point out some market opportunities, such as in the BPC, Household Care and At-Home Food categories.These sectors will still have good growth projections up to 2019 even though on a smaller scale than before and that the consumer is opting for simpler and basic products, "said Renata Moura, senior analyst Consumer Research, Mintel.

The new fiscal adjustment measures were announced in January this year and the cosmetics sector was hit. One of the measure concerns the PIS and Cofins from 9.25% to 11.75%, resulting in high prices for the imported products. With the decreased purchasing power of consumers, there was an impact on some categories of beauty and personal care and a decrease in the number of releases. All this helped the market grow at a more moderate pace in recent years. However, foreign companies came to market, moving it and making it even more competitive.

" Growth for the coming years will be moderate, and it is likely that consumers will have to prioritize essential products. Online shopping for beauty and personal care products, which is already low, will continue to be lower than other purchasing channels, such as retail and direct/catalogue sales."Juliana Martins, Mintel Research Analyst.

According to Mintel GNPD, the launch of new products for beauty and personal care suffered ups and downs in recent years, which may have reflected in the industry's sales. In 2012, launches grew 95% compared to 2011. Already in 2013 there was a 28% decline less in the previous year. In 2014, the number of launches achieved a slight recovery, showing a 14% growth compared to 2013.


On the other hand, the market has been heated by the arrival of foreign companies in the country, making it even more competitive. Sephora arrived in 2010 and now has 14 stores nationwide. For 2015, the intention is to open another eleven stores. A Peruvian company direct sales Belcorp arrived in October 2011, with US $ 200 million investment plans in 2015. More recently, the country received (October 2014) the definitive arrival of the British The Body Shop. Its products are already sold in stores of the gaucho brand Emporium Body Store and the plans are to open 500 franchises over the next five years. In November 2014, it was the turn of Australian cosmetics brand Aesop (a brand of Natura )  arrive in São Paulo.

According to Beauty Retail report - Brazil, in November 2014,only 3% of users of beauty products reported buying BPC products on the internet during the last 12 months.  Among them 25% of consumers of BPC products reported that it is very important that shops offer ways of trying the products before buying them, with 44% of responding buyers reported they like to smell a product before buying it. In other words, fragrance is a top influencer when choosing a BPC product. These products are of strong sensory appeal, ie when consumers buy them, they like to feel the smell and texture. In relation to make-up, about six in 10 (59%) users tend to try the products before buying them.

According to the trend Sense of the Intense identified by Mintel, intense physical and sensory experiences bring a deeper meaning to life, to brands and products. The human need to go through intense experiences lasts for a lifetime, being a way to relieve the stress of everyday life.


[caption id="" align="aligncenter" width="350"] Source: Mintel - Forecast of sales in the BPC market based on current prices, by value, Brazil, 2009-19[/caption]

The agency points out in its reports that young adults between 16 and 24 are the most likely to purchase online: 13% 13% report having bought beauty products on the internet during the previous year. And 59% of these young women spent more in the category in 2013, compared to 42% of the national average. Since men buy several products more frequently on the internet than women. The only exception is in the BPC category. For example, 8% of women aged 45-54 bought this type of product online during the last 12 months, compared to 3% of men in the same age group.


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