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Strong growth in Mexico’s market for cosmetics, beauty, personal care products

June 1, 2018
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Why this is important to Wisconsin businesses: Mexico’s market is the second-largest in Latin America, after Brazil.

The cosmetics and beauty products industry is one sector that is mostly impervious to the ups and downs of markets. Overall sales are affected in the event of an economic downturn, but sales of cosmetics can be trusted to maintain a certain volume overall. This is because of consistent usage of products by women, and increasingly also by men, across the world.

Mexico is one of the largest economies of Latin America after Brazil. The Mexican cosmetics market is worth $9.75 billion, ranking 12th in the world, with the promise of additional growth. The industry is projected to grow at a compounded annual growth rate of 7.7 percent to over $14 billion by 2020. The market has shown healthy performance in 2017 compared to previous years. Predominant trends for cosmetics include lasting power and new color palettes; increasing market share for products for diverse skin tones and hair types; and an increased preference for vegan, organic and natural beauty products, enhanced through the use of other ingredients to mitigate harmful effects of pollution, sun, dust, and harmful ingredients that are typically part of cosmetic products.

According with to the Mexican Chamber of Cosmetic Products (CANIPEC), the value of the Mexican cosmetics market is estimated at more than $10.5 billion, ranking second in Latin America and 11th in the world. The companies affiliated with CANIPEC represent approximately 85 percent of the formal national market, generating approximately 40,000 direct and 150,000 indirect jobs, along with income opportunities for almost 2 million families through the direct sales system.

The premium beauty market has also had strong growth in recent years. In 2017, it registered an increase of 15 percent, and the category of skin care products grew by 6 percent due to the entrance of prestigious new brands into the Mexican market.

Notable categories include skin products, including bug repellents of direct application; products for hair and follicular systems (shampoo, conditioner, hairspray, gels, glitter and creams for combing, hair treatments and hair dye); hygiene products (gels, creams and shaving foam, razors and backups); make-up; nail products; and products for perfuming, modify or correcting body odors (deodorants/anti-perspirants, fragrances, perfumes, powders).

Unlike other sectors, despite the atypical economic conditions Mexico has undergone in recent years, the cosmetics industry logged stable performance, reporting growth rates averaging 11 percent but varying by category. The investments made during those years were used for widening the capacity of production, mainly for exporting, which means Mexico continues to be a very attractive country for investment in this industry. The average annual foreign direct investment has been $300 million for each of the last 9 years.

Direct selling is the largest distribution channel for beauty products, accounting for roughly 40 percent of the total value of the market, followed by supermarkets at 30 percent and wholesalers at 15 percent, with department stores only accounting for less than 4 percent of distribution. Professional spas and beauty clinics do not contribute significantly to the distribution of beauty products, as they are small in numbers and it is not their main business objective.

Aggressive advertising campaigns on TV and magazines are probably the most effective marketing techniques in Mexico. Mexican soap opera stars have become spokespeople for different brands, reaching out very effectively to consumers. U.S. companies must bear in mind that without significant investment in marketing, it is very difficult to succeed in the Mexican market.

CANIPEC comprises 67 companies—both national and international—in the sector, representing 80 percent of the Mexican market. These companies’ main sales channels are retail (self-service stores, pharmacies, etc.) with 39.1 percent; selective sales (departmental, with six large groups: Antera, Coty México, Estée Lauder, LVMH, Puig and Perfumerie Versailles) at 12.5 percent; suppliers at 10.9 percent; make-up artists at 17.2 percent; and distributors.

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