Natura seeks foreign markets by slowing in Brazil

The Natura Cosmeticos SA is counting on sales growth in its Latin American units to boost growth, stagnant revenues in its basic market in Brazil the converts in the company of cosmetics with the worst performance in the world.
Sales in countries like Argentina and Mexico generate more profits as recent investments give fruits, which grow and brand recognition that costs decrease, said Alessandro Carlucci. However, Brazilian consumers, burdened with debt after the economy contracted 0.5 percent in the third quarter, are reducing spending.
"Operations are profitable and we are looking at significant rates of growth both in revenue and in the profits" in Latin America outside of Brazil, Carlucci said in an interview in Rio de Janeiro on December 9.
"We are very entusiamados and there are good signs of recognition of the preference for the brand".
The hair-care products and deodorants are propelling the demand of the company headquartered in Itapecerica da Serra, Brazil, that promotes ecological and natural, as fully and help the beauty industries both in your local market and Latin America growing 9 percent each, in nominal terms, next year. So, it would be the same as in 2013, or up to 4 percent in real terms, said Carlucci.
Rivalry with Avon
Natura posted a sales growth in Brazil of 5.5 percent in the third quarter compared to 40 percent in the rest of Latin America because it faces competition from companies such as Avon Products Inc. Natura's sales grew the quarterly rates between 15 and 27 percent in 2009 and 2010, according to data compiled by Bloomberg. Natura sells its products directly through representatives in the people's homes.
The spending on consumption in Brazil, being stimulated by the Government through reductions in taxes on home appliances and cars to support the economy, fell 1 percent, on average, in the first three quarters of 2012 to 0.4 percent in the first three quarters of 2013, according to data compiled by Bloomberg. Natura's strategy to overcome your competitors is to make customers buy more often, said Carlucci. The company relies on innovative products – such as its product line Ekos, which contains raw materials of Brazilian biodiversity sustainably obtained – the variable pricing, a faster delivery and the multiple payment options to customers, such as the use of credit cards, embedded about three weeks ago.
Latin America
Sales in Latin America outside of Brazil, represented 15 percent of the $ 1.8 billion ($ 780 million) in revenue in the third quarter. Even countries such as Argentina, whose official inflation rate amounted to 11 percent in October, are a boon to Natura.
"The region is going very well," said Carlucci. He cited economies like Peru, which is estimated to grow 5.1 percent in 2013, and Colombia, with estimates of growth of 4 percent, according to data compiled by Bloomberg. It is estimated that Brazil's economy to grow 2.5 percent.
An increase in the number of international sales representatives and the productivity of Brazilian consultants are the two main growth engines of the company, wrote a team of analysts of Votorantim Corretora led by Luiz Basket in a Nov. 6 report.
Instead, the growth could be obtained with acquisitions, the company's goal for 2014, said Carlucci. In February, the Natura acquired a 65 percent stake in the Australian company Aesop by 68 million Australian dollars (US $ 62 million).
"Mergers and acquisitions don't stop there – we will make more acquisitions fit in our plans," said Carlucci. "More than the geography, we look for brands that are competent and have an identity in line with Natura".