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FLANDERS INVESTMENT & TRADE MARKET SURVEY
COSMETICS AND
PERSONAL HYGIENE MARKET
IN PERU
“Cosmetics and personal
hygiene market in Peru”
19/03/2018
Pieter Embo: Economic and commercial adviser embassy of Belgium
Esthefani Lopez: Assistant to the Investment & Trade Commissioner
Representación Económica de Flandes
c/o Embajada de Bélgica
Avenida Angamos Oeste, 380 Miraflores
18 Lima
Peru
T: +51 1 237 44 94
http://flandersinvestmentandtrade.com
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pagina 2 van 10 Peru - Cosmetics and Personal hygiene market 19.03.2018
INHOUD
1. Overview ............................................................................................................................................................................... 3 2. Product Category ............................................................................................................................................................. 4 3. Channels of Consumption ........................................................................................................................................... 5 4. Premium vs. Mass products ....................................................................................................................................... 6 5. Trade statistics ................................................................................................................................................................... 7 6. Market Trends ..................................................................................................................................................................... 8 7. Fair trades and events .................................................................................................................................................. 8 8. Related Institutions ......................................................................................................................................................... 9 9. Sources of information.................................................................................................................................................. 9
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19.03.2018 Peru - Cosmetics and Personal hygiene market pagina 3 van 10
1. OVERVIEW
In 2017, the cosmetics and personal hygiene market reached up to 7 1671 million Sol, which represents a growth of 4% compared to the previous year. As to the categories that compound this industry, makeup was the one that highlighted, growing by 12%. The categories Fragrances and Personal hygiene grew by 8% and 6%, respectively. According to the Peruvian Committee of Cosmetics and Hygiene (COPECOH) of the Chamber of Commerce of Lima (CCL), this industry will grow in a range of 6% and 8% by 2018. Even though Lima is the main region in terms of cosmetics and personal hygiene products consumption, compared to the other 23 regions, it represents 49% of the total of consumption. Of the other 51%, the regions such as Arequipa, La Libertad and Cusco are the most attractive markets, representing 6.5%, 4.8% and 4.5%, respectively. According to COPECOH, the cosmetics sector is 33% larger than the pharmaceutical. While the pharmaceutical industry moves no less than US$ 1,500 million, the cosmetics moves US$ 2,000 million. The following charts shows the SWOT analysis of the cosmetic industry.
1 Please note that the exchange rate is 1 EUR = 3.9 PEN (1/1/2018)
WEAKNESSES
▪ Regulation as a part of the pharmaceutical Industry ▪ Lack of promotional of beauty-related activities ▪ Lack of training in economic and commercial agents,
as well as the consumer ▪ Dependence on external supply ▪ Market concentrated in 8 brands, which concentrate
75% of the Market ▪ Difficulty of access to disruptive-digital systems
STRENGTHS
▪ Capacity for resilience ▪ Reinforces the well-being, health and self-esteem of
the Population ▪ Brand competitiveness (National and International
ones) ▪ Unit of the Sector throughout the chain
THREATS
▪ Confrontation between the powers of the State
▪ Decrease and depression of GDP and consumption
▪ Natural disasters, stoppage of private investment and the fall of exports and productivity
▪ Contradictions at the Andean Community (CAN) level
▪ Technical obstacles discourage initiatives
OPPORTUNITIES
▪ Consumption per-capita in the average of the region to purchasing power parity
▪ Trade facilitation thanks to the Pacific Alliance ▪ Low Penetration in some categories ▪ Lack of development of organic and natural
ingredients from the region ▪ Development of new concepts linked to
nanotechnology, new product formats and marketing systems
Source of information: COPECOH
SWOT analysis
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pagina 4 van 10 Peru - Cosmetics and Personal hygiene market 19.03.2018
2. PRODUCT CATEGORY
As to categories within the cosmetics and hygiene market, most of Latin American countries have 3 major categories that comprise 75% of the market. Personal hygiene is the leading category within these countries, followed by fragrance and capillary. The peculiarity of Peru is that the leading category within the market is not personal hygiene but fragrance. The fragrance category in the Peruvian market represents a quarter of the total market. As shown above, 50% of the products consumed were capillaries and fragrances; 22% personal hygiene; and 14% makeup products.
Participation by categories in Latin America (1S – 2017)
41%
37%
24%
22%
39%
45%
40%
37%
42%
45%
23%
16%
19%
25%
15%
17%
16%
13%
20%
17%
14%
18%
11%
25%
20%
13%
22%
18%
18%
17%
9%
14%
19%
6%
15%
13%
14%
18%
9%
11%
13%
14%
26%
14%
10%
10%
7%
13%
7%
8%
1%
1%
1%
8%
2%
1%
1%
1%
3%
2%
Bolivia
Ecuador
Venezuela
Peru (H1)
Chili
Colombia
Argentina
Mexico
Brasil
Latin…
Personal Hygiene Fragrance Capillary Facial Treatment Makeup Body Treatment
Source of information: Euromonitor International, COPECOH
Participation by categories in Peru (1S – 2017)
Personal Hygiene22%
Fragrance25%
Capillary25%
Facial Treatment6%
Makeup14%
Body Treatment8%
Source of information: Euromonitor International, COPECOH
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19.03.2018 Peru - Cosmetics and Personal hygiene market pagina 5 van 10
3. CHANNELS OF CONSUMPTION
Regarding the preferred channels of consumption for cosmetics and hygiene products, there are three major groups: retail, direct selling and e-commerce. Even though direct selling has been the most preferred channel for many years, since 2014 the retail channel has outperformed the traditional channel (bodegas, market stands, pharmacies and salons and spas). This was due to the greater number of points of sale within urban areas. To the first half of 2017, 48% of cosmetics and hygiene products were sold through direct sale campaigns while 51% through the retail market.
Consumption of cosmetics and hygiene products by channel
Source of information: COPECOH
40%44% 45% 45%
47%
50%51% 50%
51,0%
60%56% 55% 55%
53%
49% 48% 49%
48,0%
1% 1% 1% 1,0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 (H1)
Retail Direct selling E-commerce
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pagina 6 van 10 Peru - Cosmetics and Personal hygiene market 19.03.2018
4. PREMIUM VS. MASS PRODUCTS
Based on the research “Premium products, growth potential in Latin America” by Nielsen2, the consumption of premium products is experiencing a strong growth in the region and continues to have significant potential. However, factors such as consumers' perception of a financial improvement could also have an impact on the purchase of certain products. The aforementioned research also states that there are different categories in which Latin Americans consider buying premium brands. However, the most relevant are the ones related to personal care and appearance, as well as food products. Within the cosmetics and hygiene industry, premium products have a 6% share in Latin America, but in Peru this products represent 5%, which means there is growth potential in this field and more in products for men where the average in Latin America is around 10% and in Peru only 8%.
2 Nielsen, Premium products, growth potential in Latin America, from: http://www.nielsen.com/latam/es/insights/news/2017/productos-premium-potencial-de-crecimiento-en-america-latina.html
Premium and mass products market in Latin America
94%
87% 89% 90% 90%93% 93% 95% 96%
6%
13% 11% 10% 10%7% 7% 5% 4%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
LatinAmerica
Venezuela Chili Mexico Colombia Argentina Ecuador Peru Brasil
Mass Premium
Source of information: Euromonitor International
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19.03.2018 Peru - Cosmetics and Personal hygiene market pagina 7 van 10
5. TRADE STATISTICS
In 2017, Peru imported around 520 million CIF USD of cosmetic and personal hygiene products (harmonized tariff codes – HS 3301, 3302, 3303, 3304, 3305, 3306, 3307 and 3401). The largest suppliers are Colombia, Mexico and Brazil which, according to import statistics of 2017, together supply around 60% of all imports to Peru. As to the main importers, the 5 largest are Procter & Gamble, Unilever, Colgate-Palmolive Peru, Avon and Cetco. The following chart shows the participation of each of the aforementioned companies.
Importers (based on CIF value 2017)
PROCTER & GAMBLE PERU S.R.L. 11%
UNILEVER ANDINA PERU S.A. 6%
COLGATE-PALMOLIVE PERU S A 6%
PRODUCTOS AVON S A 5%
CETCO S.A. 5%
NATURA COSMETICOS S.A. 5%
UNIQUE S.A. 4%
OTHERS57%
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pagina 8 van 10 Peru - Cosmetics and Personal hygiene market 19.03.2018
6. MARKET TRENDS
According to COPECOH, the forecast for the cosmetics and hygiene market revolves around two scenarios: the conservative and the optimistic. In the conservative scenario the sector is expected to grow by 6% in 2018; however, for the optimistic scenario the growth would be 8%. As to the forecast for 2022, the growth range would be between 9% and 14%. Regarding the cosmetics industry, the main trends are: a greater interest in products containing natural ingredients, the use of smaller packages (e.g. shampoos and creams), immediacy, the rise of personalized products such as fragrances and the use of nanotechnology.
7. FAIR TRADES AND EVENTS
7.1 FIBELLA 2017
It is the largest event in the cosmetics and personal hygiene sector in Peru. This fair gathers the most
important companies in the industry and is considered one of the largest in Latin America. Fibella is the
meeting point of all people interested in knowing the advances and global trends of the beauty and
cosmetics sector.
Website: http://www.fibella.com.pe/en/
10% 12% 14% 18% 6% 1% 1% 6% 4%
8%
10%
12%
12%
14%
36734038
45235157
60856424 6464 6500
68657167
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
6% 7% 8% 8% 9%
Cosmetics and hygiene market: trends & forecast to 2022 (S/ Mlls.)
Source of information: COPECOH
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19.03.2018 Peru - Cosmetics and Personal hygiene market pagina 9 van 10
8. RELATED INSTITUTIONS
- Committee of Cosmetics and Hygiene of Lima Chamber of Commerce (CCL)
http://www.copecoh.com - General Directorate of Medicines, Supplies and Drugs (DIGEMID)
- http://www.digemid.minsa.gob.pe/ - National Institute for the Defense of Free Competition and the Protection of Intellectual Property
(INDECOPI)
https://www.indecopi.gob.pe/
9. SOURCES OF INFORMATION
- Chamber of Commerce of Lima (CCL)
https://www.camaralima.org.pe/principal/noticias/noticia/sector-cosmeticos-e-higiene-proyecta-un-crecimiento-entre-4-y-7-para-el-2018/897
- NEWSPAPER DIARIO GESTIÓN
https://gestion.pe/economia/ccl-peruanos-gastan-cosmeticos-salud-personal-143561 https://gestion.pe/economia/gastan-mujeres-peruanas-cosmeticos-ano-148937 https://gestion.pe/economia/empresas/sector-cosmetico-e-higiene-proyecta-aumento-10-2017-100727
- RETAIL
https://www.peru-retail.com/peru-industria-cosmeticos-higiene-creceria-entre-el-6-y-8-2018
- NIELSEN
http://www.nielsen.com/latam/es/insights/news/2017/productos-premium-potencial-de-crecimiento-en-america-latina.html
- APEIM
http://www.apeim.com.pe/wp-content/themes/apeim/docs/nse/APEIM-NSE-2017.pdf
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pagina 10 van 10 Peru - Cosmetics and Personal hygiene market 19.03.2018
Pieter Embo: Economic and commercial adviser embassy of Belgium
Esthefani Lopez: Assistant to the Investment & Trade Commissioner
Representación Económica de Flandes
c/o Embajada de Bélgica
Avenida Angamos Oeste, 380 Miraflores
18 Lima
Peru
T: +51 1 237 44 94
http://flandersinvestmentandtrade.com
Disclaimer
The information in this publication is provided for background information that should enable you to get a picture of the subject treated in this
document. It is collected with the greatest care based on all data and documentation available at the moment of publication. Thus this publication
was never intended to be the perfect and correct answer to your specific situation. Consequently it can never be considered a legal, financial or
other specialized advice. Flanders Investment & Trade (FIT) accepts no liability for any errors, omissions or incompleteness, and no warranty is given
or responsibility accepted as to the standing of any individual, firm, company or other organization mentioned.
