Despite all the economic and political inconsistencies currently experienced worldwide, the cosmetics sector has been one of the major growth sectors of the world economy. The forecast on the market growth remains positive. The BRIC (Brazil, Russia, India, and China) is what intrigues it. “The luxury market is growing at 20-30 per cent in these countries and it is estimated that BRIC will contribute approximately 36 per cent of the global luxury market by 2015 and is predicted to have the largest base of luxury consumers” (Som, Ashok). Brazil and China are the ones expecting more growth when it comes to cosmetic industry.
China is the largest cosmetics market in the world, followed by Brazil in second place. Luxury goods has a gigantic scenery where there are many strengths, weaknesses, and challenges.
Brazil is a rich country on natural resources, such as stones, diamond, gold, and gems. “The luxury industry in Brazil is bolstered by the presence of ample natural resources, including precious stones like emeralds and tourmaline” (Som, Ashok). The fashion industry is dynamic and can produce its product within the country, but it has been focused on the national market, for the moment. However, in the future, we may see the development of Brazilian brands abroad.
“The first key challenge in these markets is education and knowledge about the luxury industry” (Som, Ashok). Education had shown difference in the luxury world. Costumers, among the investors, would like to compare, contrast and experience the product before they can purchase. It is important for the industry to understand the need on the strategy in general.
Brazil and China are the most promising cosmetics market. In recession, consumers and investors spend away from large investments. As a result, it decreases the sales of product that need financing, such as cars and real estate. It also increase the sales for low cost products, such as cosmetics. Since the population is investing less money on large investments, they generates greater desire to invest in small investments, such as personal care.
Consea do Brasil – São Paulo.