23 de May 2017
Bogota is the most important market for Colombia’s cosmetics industry
Bogota accounts for almost 50% of the cosmetics sales of several companies in the sector and thanks to its projected growth it has become the preferred market for foreign investors.
Colombia is now the fourth largest market in Latin America in the cosmetics industry and is estimated to grow by 11.6% over the next 3 years, becoming one of the main targets for major international brands.
Unlike Brazil, whose cosmetics market is nearly USD 30 billion and Mexico, whose market is around USD 8.4 billion, Colombia’s market stands at USD 3.1 billion but still has plenty of room for growth .
While a Brazilian or Mexican spends just under USD 150 on cosmetics, a Colombian, on the other hand, only spends about USD 70, an area that is projected to increase in step with the rise of the middle class, the increase in Colombians’ purchasing power and more significantly an appropriation of international trends in the sector where men begin to acquire an important role by buying specialized products and women, traditional players in this market, expand their demand for premium products made from natural ingredients.
Bogota is the main center of consumption and production of cosmetics in Colombia. "Bogota accounts for 61% of all companies in the sector and for many cosmetics companies it is the source of more than half of their sales throughout the country. Therefore, large international companies have established production centers such as L'Oréal or Belcorp, as well as distribution and operation centers in the city, such as Yanbal or Natura. Over the last 3 years new players such as Nerium, O'Boticario and Mary Kay have also been attracted to the market," says Juan Gabriel Pérez, CEO of Invest in Bogota.
Different sales platforms
Nerium International is one of the last companies that entered the cosmetics arena of Bogota. This American firm arrived in 2016 with an investment of USD 2 million, with the idea of attending the domestic market, and in the long term convert Colombia into its focal point for other markets in South America. In 2017 Nerium expects to record sales of approximately USD 15 million.
"Colombia is one of the markets with the highest consumption per capita in skin care products and most of the business is done in Bogota, because since it’s the capital it is an important place for us to position our company," notes Adriana Sarmiento, Director-General of Nerium International in Colombia.
To date, Bogota accounts for 50% of Nerium’s sales and its people emphasize that the market is robust and expert, especially in alternative business platforms and direct sales, a channel that in 2015, for example, accounted for 34.5% of all the sector’s whole.
Natura, a Brazilian company that has now been in Colombia for more than 10 years, stresses that its proposal was well received here thanks to the experience in direct sales, to the point that the country is one of the company’s principal international operations, representing 32% of Natura’s global activities. "We have managed to sustainably increase our market share thanks to our network of over 90,000 consultants throughout the country. These are the ones who offer the essence of Natura in every corner of Colombia: promoting pleasure, beauty and sustainability at the same time," explains Pedro Gonzales, General Manager of Natura Cosmetics Colombia.
60% of the cosmetics market in the country is concentrated in sales of fragrances, male grooming products, hair and skin care. L'Oréal has been present in Colombia for 22 years and is one of the largest companies to date in the country, with more than 1,000 employees in Bogota and 200 in other cities. It supplies most of the
categories of the sector through traditional distribution channels which range from supermarkets to specialized stores such as pharmacies, perfumeries and skin care shops.
"When the operation was set up we thought especially about the concentration of consumers. Bogota represents up to 50% of our sales in some categories but since retailers are spread out all over the country, cities like Cali, Medellin, Barranquilla and Bucaramanga are becoming more and more important " says Alejandro Eastman, General Manager of L'Oréal Colombia.
And the company still sees room for growth in the market as it continues to introduce new products to the make-up market, confident in consumers’ positive reception and the ability to conquer new niches.
* Photo taken from Portafolio.co