Currently one of the better performing economies in Latin America, Peru is seeing an increased focus from cosmetics players. This is in part due to rising purchasing power and ongoing retail expansion from department-store players, which is slowly drawing consumers away from the dominant door-to-door channel.
While growth in 2014 was slightly slower than in previous years, according to market observers, Peru has been less impacted by economic fluctuations than its neighbors like Brazil, Argentina, Venezuela and Chile.
According to data from prestige beauty tracking firm Segmenta, Peru’s prestige beauty market grew 12.6% in value terms year-on-year and 13.7% in unit terms in 2014. Growth is predicted to continue at similar rates in 2015.
“[Peru] is the best-performing market in the region,” commented Daniel Morimoto, a retail manager at Segmenta Latam. He nevertheless observed that, “the market was impacted [in 2014] by the economic situation, because these countries that lead with commodities are quite affected by the slowdown of the European, American and Chinese economies.”
Most Peruvian consumers are just beginning to access luxury cosmetics, particularly in categories outside fragrance, thanks to rising disposable incomes, the expansion of distribution and the associated access to credit now offered by department stores. BPI general manager for the Americas, Gérard Pichon-Varin, commented, “More people are now able to access luxury goods. However, like most of the people who access this new world of luxury, it is more through what they see and what they read: the key names of the luxury business. Right now they go to the big names.”
According to Segmenta, in fragrance, which still represents the lion’s share of the prestige market at 56% (and saw growth of 13.5% in 2014), Puig brands Carolina Herrera and Paco Rabanne, (especially in men’s), are particularly popular.
Nevertheless, consumer habits are changing. “The local population now goes to perfumeries and department stores and is finding out about brands in general,” said Pichon-Varin. “The demand is there, and it is up to us to put [consumers] in contact with our brands.”
Morimoto added, “Peruvian consumers are maturing in terms of global consumption, getting to know the brands and starting to want more quality from products.” There is also a market for high-end brands, such as Estée Lauder Companies’ owned La Mer, which is performing well among wealthy consumers, he said.
To read BW Confidential’s full report on the beauty market in Peru click here.