BY OLGA CECILIA CANSECO
In the past, Latin American men were not nearly as likely to buy specialized personal care products as men in Europe. But with advertising and evolving social expectations, that is changing fast. Nowadays, more than 80 percent of Latin American men buy their personal care products themselves, something that used to be done by their wives or girlfriends. As a result, personal care product multinationals are taking a closer look at the growing Latin American market to take advantage of these trends.
The countries where men are more likely to purchase male cosmetic products in the region are men in Brazil, Argentina and Venezuela. Venezuela was one of the first Latin American markets where Lancôme Homme was launched, and Brazil is the only country where Revlon has launched its male line “Bozzano”, which represents up to 70 percent of Revlon sales in the country.
In Mexico and Central America, body care for men does not have deep roots, but mass media exposure to trends in Europe and the USA is creating greater demand. In Mexico, just two years ago there was little information on available facial and body treatments, but today brands such as Carlo Corinto Skin Essentials not only market but even develop their products in the country. Mexico is a very attractive market, with over 30 million men among 20 and 75 years old, 40 percent of whom spend an average of $50 a month on personal care products.
In 2006, consumption of male cosmetics in Latin America reached $3 billion. Brazil is the 5th consumer worldwide and the first in Latin America, with over 47 percent of the regional consumption. Although Venezuela represents only 5 percent of the regional sales, it has the highest cosmetics and perfume consumption per capita. In Chile, cosmetics purchases increased 29 percent in 2005-2006, although it still accounts for only 4 percent of Latin American sales.
Consumption per capita is growing in the region, especially in Mexico, followed by Chile and Venezuela. In 2009, annual consumption in Mexico is expected to reach $2.6 billion, while in Chile and Venezuela it is expected to reach $2.2 billion and $750 million, respectively. With this sales potential, positioning the brand and cornering market share is a key strategy for personal care companies to ensure success in the medium term.
The purchasing power of Argentina was affected by the recent economic crisis, leading to a switch to more mass brands, but as their economy recovers, consumers are expected to resume greater purchases of semi-selective care products.
WHO ARE THE POTENTIAL CONSUMERS?
Even though male cosmetics represent less than 10 percent of the total consumption of personal care products in the region, the male market is growing fast, at an annual rate of 9%. With a potential market of nearly 95 million consumers, InfoAmericas projects that this market will reach annual sales of up to $6.7 billion in 2015.
Ninety percent of target male consumers—men between 20 and 75 years of age, with purchasing power—are located in Brazil, Mexico, Argentina, Colombia, Venezuela, Peru and Chile. Mexico has nearly 18 percent of target consumers, although there is a strong habit among Mexicans to buy unisex personal care products, which has limited the consumption of male brands. Multinationals have already started to invest in marketing campaigns to attract this consumer segment, for example BDF’s recently relaunch of Nivea for Men in Mexico (Nov’06). Other recent launchings in the semi-selective and selective markets include Vichy Homme (Sep’06), Nickel (Aug’06) and Chanel Homme (Feb’07).
DISTRIBUTION: TREND TO MASS CHANNELS
Latin American consumers tend to buy male cosmetic products in supermarkets where they can find more economical mass brands such Gillette Series, Neutrogena Men and Nivea for Men. The supply of selective brands is more diverse, with more than ten male lines such as Biotherm Homme, Lancôme Homme, Aramis Lab Series, Clarins for Men and Clinique Men, among others, which tend to be sold in higher-end, specialized stores or by catalogue sales.
Supermarket/Retail Chains: Distribution channels frequented by male consumers determine the entry barriers of this market. In Mexico, up to 90 percent of men prefer to buy their personal care products in supermarkets such as Grupo Wal-Mart (Wal-Mart, Superama, Bodega Aurrera), Comercial Mexicana, Chedraui and Gigante, among others.
In Chile and Brazil, supermarkets are also the main distribution channel of male cosmetics. Men visit retail chains such as Sonda, Futuraza, Pão de Açúcar y Casa Sta. Luzia not only for body lotions but for hair and facial treatments. In order to sell in retail chains, producers must enter the market with low prices, as the key factor is volume.
Supply of personal care products has evolved in these distribution channels. Two years ago supermarkets only sold mass products such as shampoo, deodorant and shaving products; nowadays they carry more specialized products such as the Razor Defense line of Neutrogena Men which includes shaving gel, facial exfoliating lotions and moisturizing lotions for sensitive skin.
Pharmacies: Pharmacies sell more than 70 percent of male cosmetics in Venezuela, 50% in Argentina, 16 percent in Colombia, 12 percent in Chile and only 4 percent in Mexico. In Brazil, pharmacy sales account for 15 percent of sales, although drugstores chains like Cadena Onofre increased sales by nearly 9 percent in 2006.
At the beginnings of the 1980s, pharmacies represented nearly 60% of total cosmetics sales in Chile, but the entrance of big retail chains and department stores reduced their share. In recent years in Chile, pharmacy chains such as Farmacias Ahumada have launched aggressive campaigns which have enabled them to recover their role in the sale of these products. Farmacias Ahumada has followed this same strategy in Brazil, where it also runs operations. The trend to increasing the density of drugstores throughout markets will give an added boost to the cosmetic industry, helping change consumer habits by offering a wider range of products in more sales points.
According to National Perfume and Cosmetic Industry Association (CANIPEC), plans are underway in the pharmacy sector to regain the position they formerly had in Mexico’s cosmetics market. Since 2006, Farmacias San Pablo has begun to change distribution inside its sales points, adopting the drugstore concept of selling numerous body care products, not only medicines. This chain now markets male lines from Gillette Series and Neutrogena Men to Avène for Men.
In Brazil, it is common to find drugstores such as Drogaria Onofre and Droga Raia inside shopping malls, where, besides medications, Brazilians can find a wide line of personal care products from Nivea for Men to dermo-cosmetic lines such as Avène. However, supermarkets and perfumeries have the largest share in the sale of these products in the Brazilian market.
Department Stores and Specialized Perfumeries: In Chile, department stores and perfumeries capture 25 percent of sales and are particularly strong in the selective product segment, where they have a nearly 50 percent share.
In Mexico, selective brands are mostly found in department stores such as Palacio de Hierro and Liverpool. Unlike Chile, Colombia and Brazil, in Mexico there are very few specialized perfume stores. In Colombia, men commonly to go to Perfumerias La Riviera to buy products such as after-shave lotions.
The selective brand market still represents less than 1% of male cosmetics sales in countries like Mexico. Even though sales volume is low, the market is attractive for international brands such as Biotherm Homme, Clinique Skin Supplies for Men, Clarins Men and Lancôme Homme, due to the high price levels for these products.
In Panama, brands impose exclusivity at the point of sale. Large firms basically work with three distributors, who can only sell in the channels previously accepted by the firms. Farmacias Arrocha, Félix B. Maduro, Collins, Gran Morrison and Dante are some of these approved sales points.
Direct Sales: Mexico is the 4th direct sales consumer worldwide. Catalogue sales represent nearly 40% of cosmetics revenues in the country, and companies including Avon and Jafra have already started to use this channel to reach Mexican men. Today, most of these brands offer only eau de cologne and after-shave lotions. However, since 2004, the selective brand Ebel Paris started offering the Absolu Homme line, including an enriched shaving mousse, after-shave lotion and energizing facial lotion.
In Brazil, direct sales account for more than 15 percent of the shaving lotion/after-shave sales, while in Peru this channel holds nearly 20 percent of the market. In Venezuela, direct sales already offer male cosmetics, including not only a wide selection of Avon fragrances and Ebel’s Absolu Homme line, but also companies such as Esika and Yanbal with more complete lines such as Artikus (deodorant, hair treatment and shaving products) and Titanium (shaving cream, hydrating gel, lotions, shampoo and deodorant). In countries like Chile, Argentina and Colombia, less than 2 percent of male cosmetics are sold through catalogue.
Other Channels: Spas are another growing sales channel, with an estimated annual growth of nearly 9%, according to CANIPEC and MEXSPA (Mexican Spa Association).
In Argentina, Biotherm—with more than half of the male cosmetics market—has implemented a new strategy, selling through corner sales points located in open spaces such as shopping malls and airports.
In Latin America, Internet is not yet an important sales channel, due mainly to the lack of confidence in on-line card payment.
Even though a great number of male cosmetic selective brands are already sold in Latin America, they represent less that 10 percent of the total consumption of cosmetic products. Producers should invest more in advertising campaigns to promote awareness of cosmetics especially formulated for men’s skin, and in this way, start changing purchasing habits away from unisex brands to male brands.
Today, mass distribution channels such as supermarkets chains are the first choice for target consumers, although men will increasingly buy products in specialized perfume and cosmetic stores. Multinational firms should also follow up the strategies of the pharmacies and drugstores, which are recovering the role of “perfumery” they used to have in past years. This is an excellent secondary channel to reach greater number of consumers.
Spas and gyms will become an important distribution channels for male cosmetics. Today, they represent less than 1 percent of sales volume, however, this segment is growing very fast, particularly in business cities such as Mexico City, Monterrey, Buenos Aires, Santiago de Chile and São Paulo, where business men spend a lot of time in hotels.
Although catalogue sales handle more than 35 percent of total cosmetics in the region, this channel is generally not the one that Latin American men prefer when buying a cosmetic. However, companies should not forget that 20 percent of men still buy through their spouse or girlfriend, and might use this channel indirectly.
This article is republished with permission from Tendencias, the magazine of the InfoAmericas.