Brazil : international beauty players leads market growth.

International players are leading market growth in Brazil which now ranks fourth in the global market for cosmetics and toiletries, according to a Kline report. Sales increased 14 per cent in 2007 putting the country ahead of market leaders France and Germany for the first time.

Kline also predicts further double digit growth for the country's cosmetics and toiletries market over the next five years.

The year's sales totalled $11.69m driven by a burgeoning middle class, increased consumption of consumer goods and significant GDP growth.

International players led growth

"The movement was led by companies such as Avon, which managed to increase sales by more than 26 per cent after years of poor results in Brazil due to fierce competition," he said.

However, commenting on the performance of one of Brazil's leading companies Rebelo said: " 'The Brazilian Star' Natura lost some of its shine and was unable to maintain the huge growth rates it enjoyed over the last few years with sales up only 9.5 per cent in the domestic market."

The success of Avon is likely to be one of the reasons why Natura suffered over the year as both companies operate in the direct sales channel, Danilo De Paula from Factor de Salucao told CosmeticsDesign.com.

In addition, the report highlighted similarly strong results from L'Oreal, Beiersdorf and Unilever. These international companies operate in the mass market retail channel which has undergone significant recent growth due to an increasing middle class, explained De Paula.

Hair care wins for Brazilian companies

The outlook was not all doom and gloom for domestic players however and De Paula highlighted a number of Brazilian hair care companies that had grown rapidly throughout the year.

This, he felt, was due to their expertise on the specific characteristics of Brazilian hair types, an arena which the international players have yet to fully capitalise on.

Nevertheless looking to the future De Paula said that international companies with higher R&D budgets were likely to lead future growth, especially as innovation is key to success in the market segments tipped for success - skin care and color cosmetics.