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Direct growth
Marcos Gouvêa de Souza - CEO, GS&MD - Gouvêa de Souza
The global direct, or door-to-door, market, is estimated in US$ 117.6 billion and Brazil is the world’s fourth-largest market,
only behind the United States, Japan and China. The difference is that, while sales in Brazil rose 18.4% in 2010, in an ongoing
evolution, the global market rose slightly in the last three years, going from US$ 114 billion in 2007 to today’s US$ 117.6 billion,
growing exclusively in emerging markets, specially Brazil, China, India, Russia and South Korea.
In a scenario of expansion of the multichannel alternatives to serve empowered consumers, the non-store channels are
the ones with stronger growth. In Brazil, internet sales rose 40% in 2010 year-on-year and direct sales went up 18.4%.
if there were reliable estimates for TV or mobile sales, surely we would confirm these segments rose faster than overall
retail sales (7.9%, according to official statistics agency IBGE).
This behavior is related to the changes in the business scenario, more and more competitive and with a broader range
of choice alternatives, and also to changes in the consumer behavior, with more focus on convenience and demanding
more information and easiness in the shopping process.
In Brazil, the direct sales segment, driven by the structural changes that have been shaping the emerging economies,
is also favoured by the deep structural changes in the local market, where lower-income population has become richer
and in the process has changed the reality of the domestic market.
The direct sales segment in Brazil reached an all-time high revenue of R$ 26 billion (US$ 15.29 billion) last year in an
absolutely consistent growth process. There are around 2.74 million salespeople working in the sector in Brazil, less than
in countries with smaller sales, pointing out average sales per person in Brazil have been way above the global average.
Opportunities have been identified and several companies have been trying to grab a share of this market. In the last
two years, many consumer goods companies have discovered and measured this market and have been creating new
businesses or distribution strategies to cope with the new possibilities. Boticário group, with its recently-launched (and
very ambitious) Eudora multichannel project, is one of them, positioning the brand to serve emerging consumers in the
personal care and cosmetics segments, with a sexier appeal. The same has happened with Vitaderm, also in the beauty
care market, who added another channel with its direct sales force.
The traditional players, as Avon (1.1 million resellers) and Natura (over 1 million salespeople), have been facing the
competition of new brands and concepts who have not only been disputing the same traditional consumer, but also the
same salespeople or representatives, who form their sales mix based on their consumers’ values and demands. These
brand representatives create their own product mix based on the needs of their consumer base, blending brands, products,
catalogs and services according to the consumer’s profile.
In spite 88% of the segment’s sales in Brazil have been focused on the personal care market (what explains the expansion
of companies as Boticário, Vitaderm, Avon and Natura), new products and brands have been brought to this market, as
Polishop has been doing with a strong range of imported goods. Or as Unilever has been doing in a project of direct sales
of water purifying systems. Equally as Nestlé, Batavo, Yakult or even JBS, the latter selling meat at home and advancing
in the food segment, apparently the last segment to be conquered by the direct sales model.
Undoubtedly, the segment’s potential in Brazil will make the number and importance of the players of the sector grow. In
the next years, the direct sales will continue to rise above the retail average, at the same time there will be more products
and brands being offered to this consumer, who has been more and more loyal to this channel.
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