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Giants in Cosmetics

In: Business and Management

Submitted By RingowStarr
Words 1173
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To L'Oréal, Brazil's Women Need New Style of Shopping
By CHRISTINA PASSARIELLO
(See Correction & Amplification below .)
RIO DE JANEIRO—Brazilian women are among the biggest spenders on beauty products anywhere. But the world's largest cosmetics company, L'Oréal SA, has faltered in Brazil.
The reason: Brazilian women from the banks of the Amazon to Sao Paulo's slums and the affluent beach communities of Rio de Janeiro have traditionally bought their skin creams and mascaras from door-to-door sales representatives, not the shops where L'Oréal sells its brands.

Cosmetics giant L'Oreal is trying to change the way Brazilian women buy makeup. WSJ's Christina Passariello reports from Rio De Janeiro.
The French company won't use the direct-sales approach, but the company has adopted a strategy that takes a page from it: introducing personal beauty advisers at department stores. L'Oréal also plans to offer a new line of lightening creams at pharmacies.
"Our big bet here is to create a makeup business in retail from scratch," said Jean-Paul Agon, L'Oréal chief executive, as he picked up a tube of Maybelline mascara, one of his company's many brands, in a Lojas Americanas department store in a middle-class Rio neighborhood. "The more the market develops, the less relevant direct sales will be."
For L'Oréal, winning over Brazilian women is crucial if it is to meet its goal of adding one billion consumers—a doubling of its current clientele—over the next decade. L'Oréal currently makes about a third of its €17.5 billion ($23.36 billion) in yearly sales from emerging markets, and it wants to increase that to half by 2020.
But despite its well-known brands—from Maybelline and Garnier to Lancôme–L'Oréal's growth in Brazil has been unsteady at best. Its Brazil sales rose 15% to €521 million in 2009, but they had only inched up the previous year. In contrast, sales...

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