Brazil may be the world’s leading exporter of halal poultry, meats and livestock but its halal cosmetics industry pales in comparison. While the Middle East is a small yet fast growing market for Brazilian beauty products, Asia so far remains unexplored. As the demand for halal cosmetics increases, what opportunities are there for Brazilian brands and manufacturers to gain market share in the global halal cosmetics industry?
The Brazilian cosmetics, toiletry and fragrance (CT&F) sector has more than doubled over the past decade, reaping in turnovers of $13 billion in 2015 from $6.4 billion in 2005. Some 85 percent of production is consumed domestically, while exports to 142 countries in 2015 reached $716.3 million.
The 10 biggest destinations for Brazil’s CT&F were all situated in Latin America and represent 81 percent of the sector’s total exports. Argentina was the biggest importer of Brazilian beauty products (18 percent), followed by Venezuela (15 percent) and Chile (10 percent).
Exports worth some $19 million were shipped to Organisation of Islamic Cooperation (OIC) countries, nearly all of which were situated in the Middle East and North Africa (MENA). The United Arab Emirates and Saudi Arabia were Brazil’s leading export destinations in 2015, at $6.9 million and $4.2 million respectively, followed by Turkey, Bahrain, Egypt, Morocco, Tunisia, Libya, Lebanon and Qatar.
Sales to MENA currently only represent 2.6 percent, yet the region is Brazil’s fastest growing export market. Exports to the region increased by 19 percent in 2015, according to figures from Beautycare Brazil, a partnership between the Brazilian Personal Care and Cosmetics Association (ABIHPEC) and the Brazilian Trade and Investment Promotion Agency.
“Brazilian beauty products in general and especially hair products are well known for their quality,” Carla Camporini, ABIHPEC’s Communication and Marketing Manager, told SalaamGateway.
ABIHPEC represents only 350 of the country’s 2,300 companies in the CT&F sector, but its member companies rake in 94 percent of total revenues. Brazil has a reputation around the world for being a beautiful country with attractive, fun-loving people and the CT&F sector certainly profits from that positive image.
In addition, Brazil has a hugely diverse population with an enormous variety of skin and hair types. The current population of some 200 million stem from all over the world: from Japan to Angola, and Syria to Germany.
“Finally, we have high quality production control,” said Camporini. “And, especially in the changing world of today with more and more people preferring natural over chemical products, we can profit immensely from our biodiversity. We believe that Brazilian beauty products can be a hit anywhere in the world.”
Hair care products currently account for most of Brazilian sales abroad, but makeup and fragrances are rapidly increasing their market share.
“As far as we know, halal certification for cosmetics and beauty products is not compulsory to be able to export to the Middle East,” she said. “It is more of a marketing strategy issue. Companies operating in this market want to show respect for the local religion and culture and differentiate their product line.”
Prolab Cosmetics was the first Brazilian firm to be halal-certified by the Federation of Muslim Associations of Brazil (FAMBRAS), in 2014. Founded in 2000, the company offers a wide range of some 160 hair products for professional hair dressers, stylists and colorists. Around 25 are halal-compliant yet every year new products are added to its portfolio.
Around 20 percent of Prolab’s production is exported to countries in Latin America, Europe and the MENA, mainly to Qatar, the UAE, and North Africa.
“It is not mandatory to be halal-compliant to be able to export beauty products to the Middle East,” Vinicius Torres, Prolab’s Project Manager told SalaamGateway. “But we saw a market opportunity when we realized people really appreciate the fact you make an extra effort and show concern for their culture.”
The certification process took around a year and a half to ensure all ingredients as well as the production process is halal.
“It took a lot of time and effort to obtain the right paperwork from our suppliers for some of the ingredients used,” said Torres. “For example we needed to change the soap we used to clean our machines, as it contained animal fat. In the end, it is the whole corporate mindset that requires change.”
ROOM FOR GROWTH
Several other Brazilian hair and cosmetics firms export to the MENA, including S’Oller Brazil, which has a network of 40 outlets around the world. Sweet Hair and NuNaat also export to the Middle East. So far, however, Prolab seems the only cosmetics firm that is halal-certified.
There is certainly room for growth. Muslims in 2015 spent an estimated $56 billion on cosmetics products, up 4 percent from 2014, according to the State of the Global Islamic Economy 2016/17 report.
The report projects global Muslim expenditure on cosmetics to amount up to $81 billion by 2021, with Southeast Asia a key growth market. The region is emerging as a leading player in halal cosmetics, accounting for 61.2 percent of the total halal cosmetics market in Asia. Not surprisingly, Malaysia and Indonesia are the most advanced halal cosmetics markets in the region.
So far Prolab does not export to Southeast Asia, which largely remains a virgin market for Brazilian hair and beauty products. In 2015, $100,000 worth of Brazilian products were shipped to Malaysia, while nothing at all reached Indonesia or Singapore.
But having gained a foothold in the MENA region, the future of the Brazilian CT&F sector may well lie farther out to Asia. However, if it wants to enter burgeoning markets such as Malaysia and Indonesia, halal certification will be a valued added advantage.