Brazil cosmetics market remains a hot spot for investors

Now positioned as one of the fastest growing emerging markets in the world, the expansion of the cosmetics market in Brazil means that it is now the fifth largest cosmetics market in the world, behind established dominant players like the US and Japan.

But unlike those players at the top of the list, Brazil is the market where potential still lies for investors.

Cosmetics consumption on the up Rising cosmetics consumption, combined with increasing income levels, means that this demand looks set to be a fixture for the mid-term, according to the latest market report by India-based market research company RNCOS.

Entitled 'Cosmetics and Personal Care Market in Brazil', the report also highlights the fact that the low cost of manufacturing, combined with a developed infrastructure and government incentives means that Brazil is becoming increasingly attractive as a manufacturing base for exporters.

Consistently hitting double digit growth figures in the last few years, the estimated value of the Brazil's domestic cosmetics market was said have exceeded the $20bn mark in 2007.

Further to this, RNCOS says it believes that consumption of cosmetic and personal care products in Brazil will continue to grow at an estimated CAGR of 15.49 per cent during the period 2008 - 2011.

Skin care is hot Specific to this, the research company believes that one of the biggest hot spots will be the skin care category, where CAGR during the same period is likely to average 22 per cent, while colour cosmetics and hair care are expected to have CAGRs of 18 per cent and 19 per cent respectively.

Chasing this growth is a string of international investors.

With all the major global personal care players eager to carve out a bigger slice of the pie, analysts believe that investment in the sector will continue to exceed $100m a year until 2010 and beyond.

Tapping into this growth are players such as Avon, L'Oreal and Unilever, who have all seen sales growth multiply exponentially following a heavy period of investment in the market.

Analysts believe that these big players will be particularly well positioned to further profit from the market growth, mainly due to the fact that they have the resources to research, develop and market the type of innovative products that are necessary to succeed in fast-moving categories such as skin care and hair care.