Coty expands its reach into the fast-growing Brazil market

By Simon Pitman

- Last updated on GMT

Coty expands its reach into the fast-growing Brazil market

Related tags Perfume Cosmetics

Luxury fragrance and cosmetics player Coty has formed a joint-venture with a major cosmetics distributor in Brazil, in a bid to expand its footprint in the country.

The company, which has been developing its reach in the global industry significantly in recent years, says its contract with Frajo International, one of the biggest cosmetics distributors in the country, will help expand its presence in the mass and masstige categories.

“Brazil is one of the largest markets in the beauty industry,”​ said Mr. Michele Scannavini, CEO of Coty. “Frajo is the right partner, sharing our passion for beauty. Together, we look forward to introducing new Coty brands into this key market.”

Currently the company has limited go-to-market capabilities in the Brazil market, a point that has served to limit its ambitions for growth in the market.

Building on its Brazil distribution model

Until now its distribution reach has been limited to an existing commercial distribution agreement to market only certain brands through a door-to-door distribution model.

It also has a separate distribution model to distribute its prestige brands in the country, which remains the focus of its brand portfolio.

Earlier this year a market report highlighted the fact that more and more international cosmetic and fragrance companies are targeting the country in view of the huge growth rates in recent years that has seen the country emerge as one of the leading global markets.

Brazil: the red hot market

According to Hana Ben-Shabat, a partner at A.T. Kearney, a global management consulting firm; “The potential in Brazil is really significant, the population is very fashion-forwardand the consumption per capita is very close to what you're seeing in places like America and the UK.”

The market analyst attributes the current situation down to a flush new middle class investing vast amounts of money on designer shampoos, lotions and cosmetics, which is rapidly turning the country into a 'beauty industry powerhouse'.

In recent years all the big international players have raised their game in the market, including LVMH opening its first Sephora cosmetic and fragrance store in the country last year, which has since led to the opening of three further stores.

According to Euromonitor, beauty product sales in Brazil hit $43 billion in 2011, a growth of 142 percent in five years that puts it on a pace to overtake Japan as the world's second-largest beauty market within a few years.

The fastest growing segments of the market saw drastic increases in sales between 2006 and 2011; depilatories went up by 299 percent, cosmetics by 281 percent and sun care by 230 percent

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