Direct sale grows 17.2% in 2010 and reaches US$ 15.3 bi
Valor Econômico
The segment of direct sales completed, last year, one decade of consecutive growth at a two-digit rate in Brazil. The data that will be presented the market in the coming days will show that, in 2010, the sector sold R$ 26 billion (US$ 15.3 billion) in products, a volume 17.2% greater than that registered in 2009. The calculation was informed in advance to Valor by the Brazilian Association of Direct Sales Companies (ABEVD). Discounting the inflation measured by the IPCA (Extended Consumer Price Index), of 5.9% in the period, the real growth of the sector achieved 11.3%.
Such growth takes place based on an already high basis for comparison - the segment sold 18.4% more in 2009 than in the previous year. From 2001 to 2010, the annual average rate of growth was 14.8%. "There is no sign such fast-paced sales might lose vigor", says Paulo Quaglia, President of the ABEVD. "It was not easy; it did not fell from the sky. We've worked hard to achieve a structure that supported such growth", says José Vicente Marino, Business VP of Natura, largest national direct sales company, with growth of 21% in the gross income from January to September 2010.
The current phase of accelerated demand, resulting from the increase in the income of Brazilians and the greater number of product launches in the sector - with different brands and prices - can mess with the world ranking of the direct sales sector. Fifth largest company in the segment in the world, with US$ 2.4 billion in net sales in 2009, according to American magazine Direct Selling News, Natura was just US$ 100 million behind the global results of the Mary Kay group, fourth in the ranking. Avon, which also has strong operations in Brazil, is the world leader.
In 2009, Mary Kay, headquartered in the USA, shrank 3.8% and there are still no data on the performance of Mary Kay in 2010 to check its position in the ranking. Nevertheless, based on projections of analysts for the Brazilian company, Natura must have sold (net value) US$ 3 billion last year. Therefore, for Mary Kay not to miss the fourth position, it must have grown at least 20% in 2010. The results of Natura will be published in February.
The local performance drew the attention of international groups for the Brazilian market in 2010. The command of the Swedish Oriflame plans to increase its operations in Brazil and that expansion might go through the buying of local assets, according to information circulating on the market. The Peruvian Belcorp, owner of the L'Bel Paris trademark, was analyzing the market last year and it might already have a business plan to start the operations in the country.
Despite such good mood in relation to the Brazilian market, the country is still far from Japan, second place in the world ranking of the direct sale sector. While Japan should earn US$ 25 billion in 2010 in the segment, Brazil sold US$ 15.5 billion - the US leads with more than US$ 29 billion. Besides, experts point out that Brazil still has a small range of large companies in the sector of direct sales. Only Natura sold in the country, in 2009, more than US$ 100 million in the area. The USA had 44 companies in that situation and Japan, 14.