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By: Elton Morimitsu

According to Euromonitor International, Brazil is the 5th largest country in colour cosmetics in the world with retail value sales of USD2,4 billion in 2016.

Top 5 Countries: Colour Cosmetics | Retail Value Sales in 2016

Geography Unit 2016
USA USD million 15.892
Japan USD million 6.635
China USD million 4.261
United Kingdom USD million 2.859
Brazil USD million 2.439
Source: Euromonitor International
Note: Fixed 2016 ex rates; Current Prices

 

Grupo Boticário is the third largest company in colour cosmetics in Brazil and Vult is the sixth largest. With acquisition, Grupo Boticário will become the second largest with 15 per cent of market share.

 

Top 10 Companies: Colour Cosmetics in Brazil | Retail Value Sales in 2016

Company Name Data Type 2016
Avon Products Inc Retail Value RSP 1
Natura Cosméticos SA Retail Value RSP 2
Botica Comercial Farmacêutica Ltda Retail Value RSP 3
Coty Inc Retail Value RSP 4
L’Oréal Groupe Retail Value RSP 5
Vult Comércio de Cosméticos Ltda Retail Value RSP 6
Contém 1g SA Retail Value RSP 7
Mary Kay Inc Retail Value RSP 8
Mundial SA Retail Value RSP 9
Grupo Silvio Santos Retail Value RSP 10

 

The announced acquisition of Vult Cosmética by Boticário does not come as a surprise. Grupo Boticário has been investing in strengthening its position within the store-based retailing over the last years, with the introduction of Quem Disse Berenice and The Beauty Box formats. Vult has a good presence at beauty specialist retailers located in the Northeast of Brazil, a more challenging region for Boticário to sell more expensive colour cosmetics items under the Boticário brand.

When it comes to distribution channels, Vult is known for having developed a good strategy among independent drugstores. Boticário can leverage Vult´s knowledge on such channel to further increase sales of its existing products from Boticário and Eudora brands. Vult is also sold through apparel and footwear specialist retailers, such as Lojas Renner, a channel that has been increasing its footprint within the Beauty and Personal Care industry, thus creating opportunities for Boticário to step in it.The announced acquisition of Vult Cosmética by Boticário does not come as a surprise. Grupo Boticário has been investing in strengthening its position within the store-based retailing over the last years, with the introduction of Quem Disse Berenice and The Beauty Box formats. Vult has a good presence at beauty specialist retailers located in the Northeast of Brazil, a more challenging region for Boticário to sell more expensive colour cosmetics items under the Boticário brand.

As for the positioning among its existing brands, we believe there are complimentary synergies among all Boticário brands. Vult has an average price point that is more affordable than that price seen within the Grupo Boticário and it is also perceived as a brand that offers a good cost-benefit ratio which could increase mid/lower income consumers within Grupo Boticário. Grupo Boticário can also use this acquisition to better understand a different consumer type so to test and implement faster novelties.

The strategy adopted seems be quite similar to what L´Oréal did in 2014 when the French company acquired Niely: be present in segments and regions where the group was not that strong with more suitable brand.

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