Beauty market in Colombia moves US$3,000 million a year

Mary Luz Macías had a traffic accident 14 years ago that left her disabled. When she returned to her job as a salesperson, in a food store, she was fired from her. From that event he was left with a knee injury that prevented him from joining the conventional labor market.

According to DANE, the country began with an increase in the unemployment rate, settling at 12.8% in January this year, one point above the figure for the same month last year.

“I got demotivated by not getting a job. The easy one was to sell by catalog. First I helped an aunt, who left me the earnings. Later I collaborated with a sister-in-law, but I began to think and asked myself: why don't I do it myself?” says Macías, who has been a consultant for five years for Yanbal, Avon, Ésika and other brands.

The 51-year-old woman assures that she now lives off that. However, she says that offering only a magazine catalog will not cut it. “If I sell $1,000,000 I earn $250,000 and with that, who will live? I work judiciously with all my magazines, to earn about $3,000,000. Sales work well if you have an order with customers in the forms of payment”.

According to the Chamber of the Cosmetic and Cleaning Industry, of the National Association of Businessmen of Colombia (Andi), the size of this market in the country generated US$5,687 million in 2018. Specifically, in the beauty market and personal care in Latin America, Colombia ranked fourth last year with US$3,422 million.

Regarding distribution channels, direct or internet sales of cosmetic products have a share of 30.9 and 0.2%, respectively, which represents business for almost US$1,057 million. According to figures from Raddar, which conducts market research, “Facebook and WhatsApp are the social networks most used by consumers in this market. Instagram and YouTube are more representative of the younger generations”.

One of the companies in this market in direct sales is Yanbal, which in 2019 celebrates its 40th anniversary. Currently 140,000 women in the country are dedicated to selling their products by catalog.

“We have grown in business development. The company is the cradle of entrepreneurs. We have 4,000 independent businesswomen, who manage the network of consultants”, says the Peruvian Carlos Gallegos, general manager of the company in Colombia.

This company was created 51 years ago in Peru and later opened markets in other countries. Its products are divided into five categories: treatment, makeup, jewelry, personal care and fragrance (which is the best seller). “We have the capacity to manufacture and distribute our fragrances in Colombia,” adds Gallegos.

And it is precisely the fragrance market that dominates the sector called “other products related to care”. For the firm Raddar, a large part of the growth was due to the sale of perfumes for women. However, lotions for men in 2018 gained strength and contributed 33% of that increase.

Despite being one of the most remembered brands, it has also aroused criticism in the catalog sales market. Although only last year it generated profits in the country close to US$200 million, like many of the companies that promote direct sales, it does not pay social security to its consultants, because they are not directly linked to the company.

This is confirmed by the consultant Mary Luz Macías, who points out that, as an entrepreneur, you must make the corresponding contributions to the social security system. For her part, Gallegos, who has been in the company for 19 years and has been in charge of the management of Yanbal Colombia for one year, clarifies that, “since they are classified as independent businesswomen, they must ensure that they are socially protected. All their costs have to be consistent with the work they are doing.”

Apart from the fact that each one of them obtains profits close to 25% of each product, the company trains them in the tax, legal and commercial aspects. “Within all the conceptualization of their business, they find the allocation of the expenses that they consider most relevant. Undoubtedly, social security is an important point in the development of the entrepreneur”, concludes Gallegos.

Although it has become a challenge for consultants to pay their own social security, this sector is also a way out for many unemployed in the country. Mary Luz Macías believes that in said business she found an alternative to survive. Their challenge is to reach new markets such as millennials or generation Z, which represents more than 30% of the Colombian population.