MarketLine Blog

Avon’s expansion in emerging markets

Avon’s door to door sales strategy is key to its success and one which sets it apart from its rivals such as L’Oreal, Estee Lauder and Elizabeth Arden which sell products through department stores and specialty shops.  Door to door sales are particularly popular in Brazil, In fact leading Brazilian manufacturer of beauty and personal care products Natura decided to follow the success of Avon’s Brazilian operations and employed a door to door sales model. Research findings from MarketLine in 2012 found that Avon holds a larger market share than domestic player Natura in Brazil.

Door to door sales is a longstanding custom in Brazil that has ushered millions of Brazilian women into the middle class.  According to The Wall Street Journal, Some 2.5 million women, out of a total female work force of 42 million, earn a living from direct sales in Brazil.

Consumers in Brazil expect high level of services including advice on beauty treatments and product recommendation by salespeople; whether that is through door to door sales or in store. Avon has been able to use this to its advantage and has continued to establish its position in Brazil over rival brands.

Furthermore, there is huge potential in China as it is one of the fastest-growing beauty markets in the world offering opportunities for growth. The beauty-driven consumer demographic coupled with the increasing consumer preference for the western brands, is boosting the demand for skin care products in this region. Moreover, the increasing disposable incomes of households and the growing middle class population is likely to contribute significantly towards the growth in the beauty industry.

However, the success Avon experienced in Brazil has not been replicated in China; in FY2013 revenues from China declined by 22%.

To read more about why Avon China has been in decline over the last few years and strategy to drive the company’s revenues; read our case study – Avon Products Inc: Poor performance necessitates change

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