Cosmetic competition

Mexico’s love affair with beauty spurs entrepreneurial dynamism.

Latin America has one of the fastest growing cosmetics markets in the world. The total value of the market across the region reached USD 70 billion last year. Natura & Co – a Brazilian cosmetics giant – which acquired UK-based Avon cosmetics in January 2020 reported that revenue from the Latin American market had more than doubled to some USD 13.5 billion just a year later. João Paulo Ferreira, Natura & Co Latam president recently announced ambitious expansion plans across the region and remarked that at least 15% of the market remains “unexplored”. What kind of competition can the company expect in target markets such as Mexico? 

A phenomenon that was put into sharp focus during the pandemic is that of the so-called “Nenis”, women, often housewives, who are dedicated to selling beauty products online or by catalogue on whom many larger companies rely on to sell products. Doing so can be highly lucrative for those involved. 

A director at Mary Kay – a cosmetics company which focuses on multilevel marketing – in Mexico explained, “In Mexico, there are just over 5 million micro-entrepreneurs who generate more than 3 billion pesos in income per year. A fundamental sector is our associated cosmetologists. It was interesting to see that there was also a boom in online makeup-self-makeup classes, which caused there to be a continuous interest in acquiring cosmetics. It was also an escape route from pandemic-induced boredom.” 

“In Mexico, there are just over 5 million micro-entrepreneurs who generate more than 3 billion pesos in income per year. A fundamental sector is our associated cosmetologists.”

A director at Mary Kay, Mexico

Certainly, there has been an expansion of cosmetic brands for catalogue sales, which has meant that over the years Avon and Mary Kay are no longer the only brands, “… but we are still leaders in sales,” remarks the director. 

More recently, Oriflame is another outfit that has gained a significant market share. RubyRose and Terramar have also grown. “The phenomenon that we must keep an eye on is that of natural/vegan cosmetics, there are already important lines of natural products with national and international projection,” adds the director. But the trend remains that the majority of Mexican women continue to buy a good part of their cosmetics in supermarkets and by catalogues. 

A Director at Terramar in Mexico explained, “Yes, progress has been made to have better sales technologies, but the reality is that the recommendation of the vendors and direct sales, is still the best form of sale in the country. Sales by app is still somewhat more attractive in the younger market.” 

“…the reality is that the recommendation of the vendors and direct sales, is still the best form of sale in the country. Sales by app is still somewhat more attractive in the younger market.” 

A Director at Terramar, Mexico

The sales apps of both Avon and Mari Kay are already up and running, where features like ‘mirror’ attract a lot of attention, however, it is still a limited sales channel. The physical catalogue is still the preferred option although with the pandemic the digital has become more relevant; there is an area of opportunity to train those associated with the management of information technologies, but to the extent that smartphones continue to permeate among micro-entrepreneurs, this trend should be reversed in time. For Mexico’s tech startup scene which has seen particular strengths in retail sales and customers interaction – there are plenty of opportunities for disruption on the horizon.   

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