BRIC economies point to way through the downturn

By Simon Pitman

- Last updated on GMT

Related tags Personal care Bric

Global personal care players would do well to increase their focus on the BRIC (Brazil, Russia, India and China) economies as a means of exiting the economic downturn quicker.

In a recent presentation given by Kline Group senior research analyst Carrie Mellage at the recent HBA expo in New York, it was highlighted how the BRIC markets have proved to be a reliable source of double digit growth, despite the global economic situation.

Brazil has been leading the way in recent years, posting annual growth for its personal care market in excess of 20 percent for the past two years, according to industry association ABIHPEC.

China has also been posting growth well into double figures, as has the Indian market, whereas the Russian market has developed a significantly-sized luxury cosmetics category, although its economy has been harder hit by the downturn as a whole.

Direct sales players

In particular all of these markets are interesting for the global direct sales players, with big players such as Avon, Amway, Mary Kay and Oriflame all set to increase their share of markets they have been investing in heavily in recent years.

“Although direct sales are slightly less important in India right now, in all the other markets they have been developed into a significant proportion of the market share, which continues to grow rapidly,”​ said Mellage.

Whereas these markets are still very much classified as emerging economies, Mellage was also quick to stress that the consumers in these countries should never be under-estimated.

Do not under-estimate BRIC consumers

“Consumers in BRIC countries are very savvy, they know what they want, read labels and note claims, so trying to market sub-standard products or using unrealistic claims just will not work,”​ Mellage said.

Another important area for further growth development in the BRIC countries is likely be the market for organic and naturals personal care and cosmetics products.

Like their counterparts in the developed markets, consumers are increasingly embracing the move towards more natural-based products for both environmental reasons as well as, on a more personal level, health issues relating to well-being.

Look out for naturals

“Naturals is likely to be a major driver for all BRIC markets in the future, as consumers continue to make the switch from personal care formulations that carry harsher ingredients,”​ Mellage said.

Another characteristic of all the BRIC markets is demographics. Although the economies are all growing at rapid rates, they all still remain highly agrarian economies with high rural populations.

This means that personal care players, and in particular the larger global players, have tended to concentrate their efforts on the more affluent and better educated urban populations, tapping their higher disposable incomes.

In all the BRIC countries there remains a huge divide between rural and urban populations, which means that for some time to come rural areas are likely to remain tier II targets for expansion plans.

Related topics Market Trends

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