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SKIN CARE IN PERU - ANALYSIS

Country Report | Jun 2018

HEADLINES Market Sizes


Current value sales of skin care increase by 2% to reach PEN1.0 billion during 2017 Sales of Skin Care
Facial care represents 58% of total category value, increasing by 3% during 2017 Retail Value RSP - PEN million - Current - 2003-2022

Skin care average unit price rises by 3% in 2017 1.016 Forecast


Unique and Beiersdorf lead skin care sales with value shares of 19% and 18%, 1.400
respectively in 2017
1.200
Over the forecast period, value sales of skin care are set to rise at a CAGR of 3% at
constant 2017 prices, reaching PEN1.2 billion in 2022 1.000

PROSPECTS 800

Skin care volume sales continue to decrease 600

Volume sales of skin care declined in 2016 and 2017 and current value sales increased 400
due to small unit price increments. The poorer volume sales were caused by economic
deceleration. Consumers who are already accustomed to using skin care products
200
continue to do so, but some of them have migrated to cheaper brands whilst others
have slightly reduced the frequency of use. However, the main effect of the economic
situation is that it discourages new consumers from trying products in this category, in 0
2003 2017 2022
which there is still a large space to penetrate because in most Peruvian households
there is no habit of using creams on the face or the body.
To create the habit, multinational companies and direct sellers invest in Sales Performance of Skin Care
communication, but it is essential that potential consumers perceive the need and at % Y-O-Y Retail Value RSP Growth 2003-2022
the same time have the money to purchase the products. In this sense, the credit
granted by promoters of direct sales will help the expansion that will be seen in the
coming years, as it is a category with potential.
2.1% Forecast
20%

Growing preference for multifunctional products


Regarding multifunctional benefits, consumers have received BB and CC creams as well 15%
as facial moisturisers with SPF protection very well. This trend continues, making it
convenient for consumers to obtain two or more benefits with only one product and
needing less time for skin care. This trend has also positively affected anti-acne
products, which sometimes are combined with colour cosmetics such as compact 10%
powder.
However, for particular circumstances, such as going to the beach, going to an event or
even sleeping, specific products are the most popular. Women prefer to use sun 5%
protection when going to the beach, as opposed to BB or CC creams, because such
specific products offer better protection. The same can be said of make-up, with facial
care taking better care of the skin whilst one is sleeping.
0%
2003 2017 2022
Multichannel distribution is a key for success
Retail is increasing its penetration, as more brands and products are available through
department stores, grocery stores and pharmacy chains. Even new beauty specialists
Sales of Skin Care by Category
are entering the Peruvian marketplace, such as Aruma, which will probably attract
Retail Value RSP - PEN million - Current - 2017 Growth Performance
consumers who currently are buying their skin care products through direct sellers or
through supermarkets, hypermarkets or pharmacies. However, by 2017 around half of
Body Care
sales were made through consultants. 348,8

The presence of more retailers will help to increase the total category size but it will Facial Care
587,2
also result in a decline in direct sellers’ shares, which will be fought with sets and
promotions as well as strengthening the network of distributors, through continuous Hand Care
49,9
training programmes. In addition, there will be an increase in direct communication
with consumers, through the use of digital media and the development of tutorials to Skin Care Sets/Kits
30,4
explain the correct use and benefits of the different products that make up skin care,
such as anti-acne products. -5% 0% 15%

SKIN CARE 1.016,2 CURRENT % CAGR % CAGR


YEAR % 2012-2017 2017-2022
COMPETITIVE LANDSCAPE GROWTH

Direct seller brands are associated with high quality


Direct seller brands are classified as mass products, despite the fact that low- and

© Euromonitor Interna onal 2019 Page 1 of 2


middle-income consumers see them as premium, with higher quality than those Competitive Landscape
offered through retailers such as supermarkets, hypermarkets or even some
pharmacies. Over the years, the products sold through the catalogues have become
aspirational and although they have a high unit price, compared to some retail brands, Company Shares of Skin Care
they are accessible to all consumers through the credit granted by the consultants or % Share (NBO) - Retail Value RSP - 2017
promoters.
Unique SA 19.1%
For consumers, the quality of these products is comparable to that of those that are Beiersdorf SAC 18.4%
marketed in department stores, to which they have had access due to geographic
expansion and also by credit card distribution to increase the loyalty of customers. Unilever Andina Perú SA 10.4%
Natura&Co 10.0%
Despite innovations, competitors are not creating new milestones Cetco SA 8.0%
Over the forecast period, more innovations are expected since in the first weeks of L'Oréal Perú SA 6.0%
2017 the law changed, making it easier for manufacturers and importers to obtain
Productos Avon SA 3.7%
sanitary registration in the country, reducing the waiting time to four months from the
previous 12 months that it took. The innovations will be seen both in imported Johnson & Johnson del Pe... 3.4%
products and in those developed locally by the leading companies, Cetco and Unique. Oriflame Perú SA 2.1%
However, there are no innovations in terms of textures or formats, since manufacturing Omnilife SA de CV, Grupo 1.6%
companies focus on offering the formats that customers already know and therefore Perfumerías Unidas SA 1.1%
innovations only consist of adding new attributes. Still, new pack sizes are expected to
appear, perhaps smaller ones in order to target consumers with lower purchasing Yobel Supply Chain Manag... 0.8%
power, but using the same textures and materials that are contained in existing Cela Cosméticos SA 0.6%
products. No changes are expected in the niche products that currently target certain
age groups, with the launch of creams suitable for different types of race also not Medifarma SA 0.5%
visualised. Laboratorio Portugal SRL 0.2%
Mary Kay Perú SRL 0.1%
Manufacturers will increase communication to end consumers
Others 14.1%
Skin care will experience natural growth because more consumers are becoming aware
of the importance of taking proper care of their skin, for beauty and also for health
reasons. The percentage of new consumers who will try skin care products each year
will be directly associated with manufacturers’ communication efforts, using different
channels that include TV, promoters at points of sale and direct media. Brand Shares of Skin Care
% Share (LBN) - Retail Value RSP - 2017
Penetration of products that include sun protection will keep increasing as well as all
anti-ageing creams and serums, since consumers already know of their existence and Unique 19.1%
recognise their benefits, even if they are not currently using them.
Natura 10.0%
Nivea Visage Crema Hidra... 5.3%
Esika 4.9%
Nivea Body Lotion 3.5%
Pond's Crema H 3.2%
Pond's 2.9%
La Roche-Posay 2.9%
Pond's Rejuveness 2.6%
Nivea Visage Crema Regen... 2.5%
Neutrogena Deep Clean 2.4%
L'Bel 2.3%
Oriflame 2.1%
Seytú 1.6%
L'Oréal Dermo-Expertise 1.4%
Nivea Body Reafirmante 1.2%
Eucerin 1.2%
Nivea Visage Tónico 1.1%
Clarins 1.1%
Others 28.7%

Increasing share Decreasing share No change

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