How’s the personal care market doing where you are?

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Submitted by Chris Humberstone on Tue, 07/30/2013 - 01:46

I am privileged to have frequent contact with friends and clients across the globe. One of the most frequent questions I am asked (usually after “How is Luisa?”) is “What have you heard about the market in Brazil? (or France or the US or Mexico etc.).
In this context, they are not talking about the stock market, but the business of personal care and cosmetic ingredients.
So, how is the market doing? Well, the anecdotal answer right now is that generally companies are having a good year in the US, with sales 5 to 10% above targets, sales in Latin America are also above target but confidence is falling (Mexico is doing better than Brazil), and sales in Europe are perhaps up to 20% below last year with confidence low and a focus on markets outside of Europe. Of course, there will always be companies doing better or worse than this, for their own reasons.
Some companies are concerned as there has been a lot of talk about a slow down in emerging markets.
The economies are slowing from amazing growth. The BRIC’s, for example at grew at 6% in 2012 compared to almost 12% in 2007. It’s no wonder people are concerned. The BRIC economies are contributing less to global growth. In 2008 they accounted for two-thirds of world GDP growth. In 2012 a bit less than half.
However, in 2007 the emerging markets had about 45% of the world GDP and 50% in 2012.
In 1993 about half the world lived at below 5% of American GDP per person, in 2012 the equivalent figure was 18% of American GDP per person.
(These numbers from The Economist July 27 2013.)
So my conclusion is that even if the emerging market economies are not growing as fast as before, they have brought millions of people out of poverty and into the lower and middle classes. There are more jobs, there is more stability and families are in an increasingly better economic situation.
The more people in the middle classes, the more consumers of personal care products there are.
While refrigerators get a one-off boost as people move out of poverty, as you only need one, personal care products are consumed on a regular basis.
So how do I think the market will be in Brazil? Pretty good.

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