BRIC markets and beyond to be key to future beauty industry growth: Euromonitor

Between 2009 and 2014, Russia and India are predicted to experience absolute growth of $2.2m and $3m respectively, and according to analyst Carrie Lennard, Brazil and China are set to be the ‘star performers’ with respective growth of $8.1m and $10.3m.

Direct selling ideal way to reach rural consumers​

Direct selling is a particularly strong distribution channel in the BRIC markets, due to the fact rural populations still comprise the majority of consumers.

“While the number of chained stores are beginning to grow in the big cities, the distribution infrastructure is often still very poor and developing in these markets, meaning that it would be otherwise be very difficult to reach rural consumers,” ​Lennard told CosmeticsDesign-Europe.com.

“Furthermore, there is still a very strong emphasis on community living in the BRIC’s and direct selling is therefore the ideal way to reach these rural consumers,” ​she added.

International companies targeting BRIC markets​

Beauty retailer Sephora has recently entered the Brazilian market through the acquisition of Sack’s, and Mary Kay is targeting rural India with a five-year plan to invest around $20m in the country.

In Brazil and India, sales are mainly comprised of those from mass brands, with little evidence of the trading down to cheaper brands seen in Western markets, said Lennard. However, in Russia, where premium products represented 11% of the beauty and personal care market in 2009 compared to 1% in Brazil, there has been evidence of consumers trading down to mass brands.

Beyond the BRIC markets​

Looking beyond the BRIC markets, Lennard said that frontier markets are now moving into the spotlight.

“Markets such as Thailand, Mexico and Indonesia will be key contributors to beauty industry growth,” ​she said. “All have rapidly expanding middle classes and high levels of urbanisation, making them prime targets for beauty companies in the future.”​

Lennard highlighted that L’Oreal has opened subsidiaries in Vietnam, Egypt, Pakistan and Kazakhstan, and the company has said that new smaller markets are expected to be the focus of further developments in the future.

Likewise, The Body Shop opened its first outlet in Vietnam in 2010, a country where disposable incomes are rapidly increasing and there is a willingness to spend on beauty products, she added.

The fast growing market of Indonesia is a key focus for Japanese beauty company Mandom, and its sales in the country are currently experiencing double-digit growth. In the future, Mandom is set to expand its export business in Africa and the Middle East.