This document discusses the trend of premiumization in the beauty and personal care industry in Latin America. It provides the following key points: 1. The beauty and personal care industry is growing faster in Latin America than globally, though Brazil is underperforming other Latin American countries. 2. Consumers are driving premiumization through a desire to trade up from basic goods and a willingness to pay more for premium formulations. 3. Key drivers fueling premiumization include the expanding middle class in Latin America, an aging population seeking to enhance their lives, and time-starved lifestyles leading consumers to pay for simplified products and services.

1. Premiumisation of Beauty and
Personal Care in Latin America
in-Cosmetics Latin America 2018
Elton Morimitsu, Senior Analyst

2. © Euromonitor International
2
Euromonitor International
network and coverage
ABOUT EUROMONITOR INTERNATIONAL

3. © Euromonitor International
3
OVERVIEW
01.
Industry Snapshot
02.
What is driving
the trend?
03.
The evolving Latin
American
consumer
04.
Understanding
Premiumization
in Latin America
05.
Future
Developments

4. Industry Snapshot
1.

5. © Euromonitor International
5
Global increase with Latin America
performing above average
INDUSTRY SNAPSHOT
-
5
10
15
20
00
100
200
300
400
500
Beauty and
Personal Care
Colour
Cosmetics
Fragrances Hair Care Skin Care
Growth%
USDBillion
Beauty and personal care: Global and Latin America
Retail Value Sales in 2017 Global Retail Value Sales in 2017 Latin America
2016-2017 Growth % Global 2016-2017 Growth % Latin America
Note: Data in USD, current prices

6. © Euromonitor International
6
Brazil underperforming other Latin American
countries
INDUSTRY SNAPSHOT
Note: Data in USD, current prices
0
5
10
15
20
25
0
10
20
30
40
Brazil Mexico Argentina Chile Colombia
Growth%
USDBillion
Beauty and personal care in Latin America
Retail Value Sales 2017 Growth% 2016-2017
49% of
LatAm
sales

7. What is driving the trend?
02.

8. © Euromonitor International
8
Premiumisation is one of our eight focus megatrends
WHAT IS DRIVING THE TREND?

9. © Euromonitor International
9
Consumers are driving a new appreciation
for thrift
WHAT IS DRIVING THE TREND?
Source: Euromonitor International’s Lifestyle Survey 2017
Note: Respodents who agree or strongly agree with the statements
79
65
57
52
47
39
I like to try new
products and
services
I like to be distinct
from others
I only buy from
companies and
brands that I trust
completely
I prefer branded
goods to non-
branded alternatives
I prefer to spend my
money on
experiences, rather
than things
It is important to me
that other people
think I am doing well
%ofrespondents
Latin America: Status and Consumerism

10. © Euromonitor International
10
Premiumisation reaches more consumers
through a cohesive strategy
WHAT IS DRIVING THE TREND?
Differentiation Customer relationshipsInnovation

11. © Euromonitor International
11
Growth in most regions comes from
premium beauty products
WHAT IS DRIVING THE TREND?
0
1
2
3
4
5
6
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Asia Pacific North
America
Western
Europe
Latin
America
Middle East
and Africa
Eastern
Europe
Australasia
Growth%
SalesinUSDmn
Beauty and Personal Care: Premium vs Mass
Mass Premium Premium % CAGR 2017-2022 Mass % CAGR 2017-2022
Note: Data in USD, fixed exchange rate, constant 2017 prices

12. © Euromonitor International
12
50% of Latin Americans are willing to pay
more for premium beauty
WHAT IS DRIVING THE TREND?
Source: Euromonitor International’s Beauty Survey 2017
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Colour Cosmetics
Hair Care Products
Skin Care Products
% of respondents
Latin America: Premium formulation vs lower price
Strongly prefer lower price Somewhat prefer lower price
Neutral Somewhat prefer premium ingredients or formulation
Strongly prefer premium ingredients or formulation

13. © Euromonitor International
13
Key drivers are shaping premiumisation
WHAT IS DRIVING THE TREND?

14. Consumers are looking
to trade up from basic
goods
14
© Euromonitor International
0
50
100
150
200
250
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Millionhouseholds
Number of households in Latin
America
Other Households
Middle Class Households
 By 2030, there will be an added
19 million middle class
households in Latin America
 Middle class households will
represent 26% of all households
in Latin America Note: Latin America includes: Argentina, Bolivia, Brazil, Chile, Colombia, Costa
Rica, Dominic Republic, Equador, El Salvador, Guatemala, Honduras, Mexico,
Panama, Paraguay, Peru, Uruguay, Venezuela
Note 2: The middle class is defined as the number of households with between
75.0% and 125% of median income.

15. Ageing consumers
spending to enhance
lives
15
© Euromonitor International
 By 2030, there will be an added
25 million seniors in Latin
America
 Population 65+ will represent
12% of total population in Latin
America
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Population by age segmentation
in Latin America
Population 65+ Population under 65

16. Consumers increasingly
willing to pay for help
 Consumers have time-starved
lifestyles
 Willingness to pay for products
and services that promise
simplicity
16
© Euromonitor International
0
10
20
30
40
50
60
70
80
90
I am willing to
spend money
to save time
I find I am
looking for
ways to
simplify my life
I like to try
new products
and services
%ofrespondents
Latin America: Status and
Consumerism
Source: Euromonitor International’s Lifestyle Survey 2017
Note: Respondents who agree or strongly agree with the statement

17. To download the full version,
access: http://bit.ly/2RrmOsw
Info-brazil@Euromonitor.com