BW Confidential - Issue #17 - March/April 2014 - (Page 80)

Travel retail Brazilian travelers: analysis The real deal While Brazil's economy had a bumpy ride last year and outbound travel is set to slow, travel-retail beauty purchases are still a priority for Brazilian travelers by Tina Milton B razil's economic slowdown presented a challenging climate in 2013, with the weakening Brazilian real stilting spending for travelers, as the money in their pockets was worth less. And while Brazilians are still traveling in record numbers, growth in passenger numbers is set to slow. Brazilian departures are expected to increase by 17% between 2012 and 2017, compared with the 68% growth recorded between 2007 and 2012, as a relatively weak currency and economy hinder growth. A total of 7.9 million Brazilians traveled abroad in 2012, a 9% increase from the previous year, according to Euromonitor International. (particularly in Argentina and Uruguay), as many Brazilians have cut back on international trips, opting for weekends of border shopping instead. Shopping China operates border shops on the frontiers between Brazil and Paraguay, Uruguay " Cogorno confirms: "It was a struggle for the Brazilian economy last year; although because of the devaluation of the real, Brazilians were still strong spenders, coming to the borders to make their purchases. But the real is stabilizing and Brazilian travelers are regaining confidence." s Shopping China predicts that Brazilian travelers will avoid traveling outside South America in preparation for the World Cup, buying what they need at the border Spend and sport The 2014 FIFA World Cup will give a boost to travel-retail at Brazilian airports and borders. The question is, how will it affect travel-retail spend across frequent Brazilian travel destinations outside Brazil. Predictions are mixed. The World Cup and the 2016 Olympic Games are not expected to have a negative impact on outbound tourism flows, according to the European Tourism Association. However, Cogorno predicts that Brazilian travelers will avoid traveling outside South America in preparation for the World Cup and buy what they need at the border. He anticipates an increase in sales during 2014, mainly before and after the World Cup begins on June 12. "We had 4.8 million Brazilian clients in 2013, 35% above 2012. For 2014, we expect to have at least 25% growth," he explains. For Panama-based retailer Motta Internacional, which operates airport and border stores, the World Cup is positive for business. "[Brazilian travelers'] spend is high, but stable. There should be an increase in travel to Brazil this year because of the World Cup, so I would expect duty-free operations in that country to do very well, but there should also be an increase in travel for the rest of Latin America, especially through Panamá, the hub of the Americas and Bogotá," comments Motta Internacional vp commercial Ignacio Lasa. Fragrance is among the top-selling categories for Motta and Brazilians are the highest-spending international group of buyers in its main airports. In a bid to speed up the modernization of 80 March-April 2014 - N°17 - BW Confidential The right price Brazilians tend to compare prices and will often purchase beauty products on their way home. This has fuelled the growth of arrivals shopping in Brazil and border shops in Uruguay, according to P&G Prestige global director for distributors and travel-retail Murat Akyildiz. Currency fluctuations have played into the hands of some travel retailers in Latin America Because of the devaluation of the real, Brazilians were still strong spenders, coming to the borders to make their purchases " Shopping China owner and ceo Felipe Cogorno and Bolivia, and 90% of its clients are Brazilian. The average buyer spend is $700 and 18% of sales are generated from beauty items. Shopping China owner and ceo Felipe

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