Although the retail landscapes are developing in quite different ways in each market, the key to successfully marketing personal care and cosmetics products will be determined by how effective companies are at tapping into these channels.
Speaking at the recent HBA conference program, held in New York City last month, Kline Group’s Carrie Mellage lifted the lid on each of these markets to show how the retail channels are evolving and to describe how companies are taking advantage of this.
The Brazil retail market has evolved enormously in recent years, and has the distinguishing feature of no serious department stores in any of its high streets or malls, as the big names fell by the wayside in the 70s and 80s.
“The fact that there are no big department stores in Brazil also contributes to the fact that the luxury cosmetics market remains small because this is traditionally the biggest retail channel for the category,” said Mellage.
However, where luxury has failed to make a significant impact, direct selling is, according to Mellage, "massive", a factor that is demonstrated by the presence of all the big names, particularly Avon.
Likewise, the hole left by a lack of department store outlets has also given way to a number of sophisticated pharmacy chains, such as O Boticario, which carries a complete range of own brand and major international branded cosmetic and personal care products.
The demise of the traditional open market in Russia has given way to plenty of new and far more sophisticated retail channels and outlets.
Direct selling has also proved to be a big winner, where Swedish company Oriflame has developed its business to become one of the major players, alongside other players such as Avon and domestic outfit Faberlic.
Indeed Mellage drew on the fact that, despite the economic downturn hitting Russia hard, the direct sales category has expanded on the back of a steep increase in sales staff recruitment, derived from the growing number of unemployed in the country.
As in the Brazil retail market, department stores are old fashioned and very much on the demise, a factor that is helping to give way to a growing number of trendy pharmacy and drug stores.
In the sub-continent small ‘mom and pop shops’, better known as kuranas, still form a very important part of the retail landscape, especially in more rural areas.
However, in urban areas Indians are quickly adopting western retail patterns, which is giving way to huge department stores that dominate modern, American-style shopping malls.
“This is where people go to buy upscale fragrances and skin care products,” Mellage explained.
However, with Indian consumers developing more and more of an appetite for mass market personal care products, the fast developing supermarket chains and mass market merchandisers should be well placed to take advantage of further growth.
In China the deregulation of the direct sales market has given way to a huge development in direct sales, where again, all the major international players have made serious inroads in the past few years.
Likewise, specialty stores and supermarket chains have also made huge inroads during the same period, which ties in with unprecedented, world-leading economic growth that has continued into double figures, even during the current economic climate.
“Carrefour is the largest supermarket chain in the country, which it has achieved by ‘going local’,” said Mellage.
However, Mellage also pointed out that Walmart has made significant gains in recent years, having bought a 35 percent stake in a major national retailer in 2007.
These retailers are cluing in on huge growth in skin care, particularly skin whitening, together with an already highly developed men’s grooming market.