The cosmetic industry in the Mexican economy

The cosmetic industry in Mexico has great importance in the country’s economy. Not only does it have the third largest production in the world, it also produces $9 billion USD in revenue, representing 4.2% of the national GDP. It is without a doubt one of Mexico’s major industries. And it is now seeking to enter the e-market to improve its online sales.

The Mexican cosmetic industry had to face great challenges with the arrival of covid-19. It seemed as if it was on the verge of going down when companies like L’Oreal, or Mac Cosmetics, had to shut down their physical stores.

A little roughed-up by the pandemic, but now back on its feet.

Nonetheless, these companies are starting to get on board with the trend as more people are doing their shopping online. Sephora Mexico, which has 26 physical stores in the country, said that closing shops was a big blow. But, they are adapting their webstore to bring more customers. 

“Sephora Mexico is getting on board with the global changes that are starting by the end of this year with a platform change that will bring more opportunities. These could be delivering the product to the client during the course of the day the item was purchased, or buying online and picking up at the store. Just like other companies are already doing.” stated Natala Zarate, Sephora Mexico CEO.

Zarate also stated that online sales do not compensate for losses so far, but this is because they weren’t prepared for the pandemic. As wasn’t the rest of the world. Nonetheless, with the right actions taken by the logistics department, there is a great opportunity in the market.

“Our online store earned almost three times more than the previous year. This requires a great planning team and we will take advantage of this opportunity.” added Zarate.

However, the pandemic has sparked the cosmetic industry’s appeal for people. According to the Mexican Online Sales Association (AMVO), interest in beauty and self care products rose 11% in the past months. Plus, skincare and eyeshadows products had a sales increase of 4.2% and 1.8% respectively.

According to the Society of Chemical Cosmetologists of Mexico (SQCM), each year the Mexican cosmetic industry grows 9% and up to 11%. The average Mexican spends $3,600 MX yearly on these products, but this number is bound to increase due to people being more interested in them.

Furthermore, Mexico exports cosmetic products to over 100 countries, one of the most important being the United States. Seeing how foreign trade is one of Mexico’s main economic axes it is clear how important the cosmetic industry is for this country.

What are the top 5 cosmetic companies in Mexico?

The cosmetic industry

The Mexican cosmetic industry has some heavy lifters. But when it comes to designing new beauty products, investment has to be done in lab research. These are the top companies that invest millions of dollars in innovation and development of new cosmetic products.

  • L’Oreal. This company invested around $509.2 million MX in 2017, which represented a 9% market share.
  • Avon. They had a 6.6% market share with an investment of $53 million MX in 2017.
  • Mary Kay. This company has the largest share in the Mexican market with 18.4% as of 2017.
  • Estée Lauder. With an investment of $181 million MX, this company had a 6.8% market share in 2017.
  • Revlon. They were not part of the top 5 market share holders in 2017, but their innovations in distribution have let them be part of the top 5 cosmetic companies in Mexico.

Mexico doesn’t only produce and export cosmetic products. The country is also among the biggests importers in certain categories.

What are the main imports of the cosmetic industry?

The cosmetic industry

According to Statista, Mexican imports of cosmetic and personal care products consisted of $1.3 billion USD in 2019. From 2015 to 2019, Mexico imported a total of $6.41 billion USD in cosmetic merchandise.

Mexico is among the top importers of hair products in Latin America, with over half of such imports being from the United States of America. Hair care is also among the most valuable product categories in the Mexican cosmetic industry, with an annual value of $35 billion MX.

Nevertheless, Mexico’s participation in hair care products was not focused only on importing. The country was the fifth largest exporter of these products worldwide, and the only Latin American country in the top ten, with more than $570 million USD worth of exports.

Seeing the importance of the Mexican cosmetic industry and how it is getting back on its feet, it is now a great time to enter this market. Thus, here at VYNMSA we would like to assist you in settling in this country. 

We are one of the leading industrial real estate developers in Mexico. Plus, we have over 30 years of experience and have delivered over 500 projects to fully satisfied customers. We are also fully equipped to assist you in developing your BTS projects. All while offering lease and sale solutions that always have a win-win approach. 

We also are Broker Friendly and have around 20 inventory buildings ready for immediate occupancy. This is a total space of 2 million SqFt across Northeast and Central Mexico.

Contact us and bring your company to Mexico with VYNMSA to be part of the resurgange of the cosmetic industry.

Source: Forbes, Expansión, Statista

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