Posted: August 8, 2014
Continuing to look at the trends and topics that were hot at the 2014 HBA Global Expo in New York, Euromonitor International shared a video, “HBA Global 2014 Recap: L’Occitane’s Success in Brazil,” which highlighted how its company strategy in the South American country—including a local line with locally sourced ingredients—helped pave the way for this new market for L’Occitane.
Virginia Lee, senior research analyst for Euromonitor, said via the video, “Beauty companies can expand successfully internationally if they know the countries that they’re going to be involved in. They need to know, what do the consumers in that country want, what are the retailing and economic conditions of that country.
“One of the successful examples of international expansion has been L’Occitane. L’Occitane is a France-based beauty specialist retailer of premium beauty care products. They entered Brazil in 1995 through as distributor and [have] operated as a subsidiary since 2009. They have been successful in Brazil by knowing what Brazilians want. Brazilian women love beauty, beauty products—especially fragrances and hair care. They realized that Brazilians like products that contain natural ingredients.
“So, L’Occitane—how have they been successful in Brazil? They’ve been opening many stores across the country and [are] investing in staff training. Opening a lot of stores make a lot of sense for L’Occitane because the beauty retailing landscape for premium beauty products is very underdeveloped in Brazil. So company like L’Occitane and MAC are opening their own free-standing boutiques.
“At the same time, Brazilians, while they enjoy beauty products and imported beauty products, they also don’t want to pay overly high prices. Brazil has very high import taxes, so L’Occitane realized that, in order to grow their sales even more in Brazil, that they needed to find a way to lower the price of their products while keeping the quality intact. They decided in 2013 to launch a line called L’Occitane au Brésil. Instead of the products being made in France that would carry high import taxes, they decided to make the products in Brazil. This allows them to price L’Occitane au Brésil at about 30% cheaper than the original, French-made line. Additionally, L’Occitane au Brésil, by using indigenous plants from Brazil, can appeal to Brazilians’ sense of pride by taking advantage of Brazil’s abundant plant life.
“So in 2013, L’Occitane au Brésil introduced a number of products. One features the jenipapo plant is their sun care products and is claimed to offer nourishing and hydrating properties. Another plant that they used is the Victoria regia flower—it turns from white in the daytime to pink at nighttime—and the products, including fragrances and soaps, have a floral, aquatic scent.
“To summarize, L’Occitane has been successful in Brazil by opening numerous stores, investing in staff training, and developing their own L’Occitane au Brésil line to offer good quality [and] attractive packaging at prices that are 30% lower than the original, French-made line,” concludes Lee.