Avon expands into Colombian market

The move aims to put the company in a The two companies were acquired from Sarastro, a Bahamian company. As a result of the acquisition, Avon said it will indirectly acquire the unnamed Colombian company - a strategic move that will give the company greater reach in that South American market.

The transaction also includes a number of assets currently used to operate the business in Colombia, which will create greater synergies for its operations there.

Avon​ says that the transaction will be subject to the customary conditions that will be fulfilled in the course of the next few months, although it gave no firm date for the completion.

In recent years the cosmetics industry in Colombia has witnessed significant growth, although that is now expected to be curtailed as the market is showing increasing signs of maturing.

According to market research company Euromonitor, direct selling giants Ebel (BelStar SA) and Avon, launched aggressive media advertising campaigns in late 2003 and 2004 in an effort to maintain and improve their positions on the market.

The campaign reflects the increasing competitiveness in the market as traditionally, direct sellers only promote product attributes through word-of-mouth. Euromonitor says that Ebel and Avon broke with tradition by showing new products, highlighting product attributes, communicating their mission and directing interested consumers to their beauty consultants through media channels.

The major players on the Colombian market include Gillette, Colgate-Palmolive and BelStar, and they accounted for 41 per cent of the market in 2004, during which time they gained and maintained their positions using aggressive marketing campaigns.

Euromonitor also points out that contraband has been having a significant impact on the cosmetics industry in Colombia in recent years. Large amounts of illegally traded goods have been seeping through from Venezuela, with premium cosmetics and fragrances proving to be the most popular products.