BW Confidential - Issue #17 - March/April 2014 - (Page 68)

Market watch: Latin America Colombia: prestige retailing Distribution transformation Retail in Colombia is undergoing much change, all good for the market's future by Alex Wynne I n line with its current growth, Colombia is one of the Latin American markets seeing the most change when it comes to prestige retail. Colombia is traditionally dominated by perfumeries, with Panama-based Grupo Wisa's La Riviera chain controlling around two thirds of selective beauty distribution, and family-owned Fedco acting as the second player on the market. "It is a market where the distribution is very good quality," says BPI general manager for the Americas Gérard Pichon-Varin." And with only around 100 prestige doors in the country, there is still plenty of room for growth. Department store growth Department stores, notably from Chile, are taking advantage of the underdeveloped retail scene in secondary cities as well. Indeed, faced with the saturation of their domestic market, Chilean players have been looking elsewhere for growth, and Colombia offers them an almost untapped market. Falabella, which has been present in Colombia since 2005, now has 15 Colombia beauty sales by retail channel 2012 Channel % share Grocery retailers 50.9 Direct selling* 32.7 Beauty specialist retailers 6.0 Chemists/pharmacies 3.3 Parapharmacies/drugstores 2.3 Department stores 2.1 Other health & beauty retailers 2.4 Source: Euromonitor International; data for 2013 not yet available * up from 10.8% in 1998 68 s Fedco has remodeled some of its stores and is allotting more space to make-up stores, while Ripley entered the country last year and has plans for 10 stores in the longer term. Smaller rival La Polar is also present, with five doors, and is expanding. "Department stores will become more important, and that can only be a good thing," says Pichon-Varin. Coty Prestige regional director Americas travel retail and export Tanguy de Buchet agrees: "It has a very positive impact on the market to move a bigger part it into a more formal format," he says. Nevertheless, department stores have a battle on their hands when it comes to changing the habits of consumers who, when they buy prestige beauty, are used to going to perfumeries. "[Because] Colombia has traditionally been a perfumery market when it comes to prestige beauty, I think consumers are still getting used to the fact that department stores are also an option," ELC svp for Latin America Daniel Rachmanis believes. He adds that department stores "are growing very nicely, and we are working very closely with them to create an exciting, creative high- touch environment, so that consumers also see that channel as a valid option for beauty." Rachmanis continues: "I think it's going to take some time, but I'm confident that it will happen because these are excellent retailers with great experience in creating the right environment for beauty. With the help of all their brand partners, like us, they can create that option for the Colombian consumer, little by little." Another advantage of department stores is that they allow more space for brands to express their identity. "There is both more space and selectivity in terms of brands," says de Buchet. "La Riviera being the retail arm of the distributor, most of the brands are represented, and brand expression is flattened, whereas department stores are taking a different direction." Mall developments Mall development also means that space is opening up for standalone stores, and brands are slowly following this avenue to growth March-April 2014 - N°17 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #17 - March/April 2014

Cover
Comment
Contents
Update
Brand & retail news recap
Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Guerlain ceo Laurent Boillot
Insight: Make-up
Category overview
Budget brands
The latest trends
Retail
Innovative strategies
Retail
Vending machines
Store concepts
Digital Social media content
Market watch: Latin America
Regional overview
Mexico: country analysis
Mexico: prestige retailing
Colombia: country analysis
Colombia: prestige retailing
Argentina: country analysis
Argentina: prestige retailing
Radar A profile of six up-and-coming beauty brands
Emerging markets Company profile: Mahogany
Travel retail: Brazilian travelers
Analysis
Industry viewpoint
Packaging: Decoration techniques
Trends analysis
Innovations
Last word Diagonal Reports analyst Jacqueline Clarke

BW Confidential - Issue #17 - March/April 2014