A new middle class has emerged in Latin America, less affluent than the traditional middle class but hugely aspirational. Economic growth might have cooled, but Latin Americans are more engaged with beauty and personal care than ever before, and they are savvy about brands. Tapping into the region’s burgeoning sophistication and meeting consumers’ high expectations in terms of a brand’s quality, functionality and price point will define the industry’s key battlegrounds over 2013-2018.
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Notwithstanding the region’s economic problems, a new sophisticated, brand-savvy and aesthetically aware generation, has evolved that is very demanding in terms of beauty product innovation, functionality and value for money.
Latin Americans are flocking to a myriad of new shopping malls, attracted by their security and the “retail-entertainment” environment. These malls are key engines of growth for beauty specialist retailers and department stores.
Latin Americans are among the biggest users of social media platforms globally, especially Facebook. This is triggering new battlegrounds for beauty and personal care as leading brands look to get closer to consumers.
The population aged 55 and over is bulging and creating new segmentation challenges for the beauty industry. Anti-agers in particular, are an opportunity in the making.
Latin American men are doing more of their own beauty and personal care shopping, which is a shift from five years ago. Income disparity means they have more disposable income and they are therefore are bigger spenders than women. They are heavily influenced by advertising and marketing campaigns.
Direct selling still comprises a key distribution channel despite wider access to modern physical stores. The one-to-one personal touch matters a great deal in this region, and is a model for specialist beauty retailers building new positions.
As spending power gets squeezed in key markets, there will be growing demand for brands that have a premium image but an accessible price point.
A handful of local brands are beginning to challenge the global players in these markets.