BW Confidential - Issue #17 - March/April 2014 - (Page 70)

Market watch: Latin America Argentina country analysis Ups and downs Recent political changes are taking their toll on Argentina's beauty market by Alex Wynne I f you look at it on paper, growth in Argentina's prestige cosmetics market looks healthy, even in volume terms. Market-research company Segmenta reported that for 2013, prestige retail sales were up by 39.67% in value and by 10.83% in units. (Segmenta covers 51% of the prestige market in Argentina.) However, the reality for cosmetics firms- manufacturers, distributors and retailers alike-is another story. Argentina's economy has long been troubled, but since 2012, the government of president Cristina Fernandez de Kirchner has been tightening restrictions on imports-first, by enforcing a system whereby for every dollar of product imported, the same amount must be exported, and then by introducing a pre-registration and approval system for all imports. At the same time, consumers in the country-accustomed to the devaluation of the peso and to saving in dollars-saw strict currency controls enforced to prevent capital leaving the country. Most recently, the tax on credit card purchases in dollars was increased from 20 to 35%, to discourage the population from spending in foreign currency when traveling abroad or buying in the dutyfree channel. Still consuming "Argentines are big consumers," says Beauté Prestige International general manager for the Americas Gérard Pichon-Varin. "A large part of this is because their peso devalues so quickly that as soon as they have any money, they spend it." He continues: "If they put a thousand pesos into an account, three months later, it would be worth 10% less-so what's the point in saving?" "The market has been growing at a rapid pace. Even if you take 40% growth with 25% inflation in value, you have 15% growth, which most markets would be extremely happy with," Coty Prestige regional director, Americas travel retail and export Tanguy de Buchet comments. Argentines are also very aware of beauty products, especially when it comes to fragrance, and are less susceptible to branding than those in other markets in the region, according to observers. "Argentina is a very interesting and important market; you Top five prestige brands in Argentina 2013 Rank Make-up Women's fragrance Men's fragrance 1 Lancôme Lancôme Carolina Herrera Paco Rabanne 2 Biotherm MAC Givenchy Carolina Herrera 3 Christian Dior Christian Dior Christian Dior Ralph Lauren 4 Clinique Clinique Kenzo Giorgio Armani 5 credit: istock Skincare Estée Lauder Givenchy Lancôme Givenchy Source: Segmenta 70 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