Market research firm Circana tracks about 75% of the world’s GDP across four key markets: North America (the US and Canada); Europe; China; and Latin America (inclusive of Mexico, Argentina, Brazil, Chile and Peru). Based on that universe, looking at beauty, the US and Canada represent about 50-60% of volumes by dollar share, according to the company. “It’s huge,” said Larissa Jensen, senior VP and global beauty industry advisor at Circana, and the category is growing at around 4-5%.

Latin America, however, is seeing beauty growing closer to 26% in mass and 12% in prestige, Circana data shows. “It’s the hottest market right now,” Jensen told attendees during a panel session at Cosmoprof Worldwide Bologna in Italy.

A spotlight on Latin America

“I think there’s a lot of opportunity regardless of the market you’re in, but Latin America definitely stands out in terms of growth rates, but also the consumer (…) It’s a very engaged consumer,” she said.

Generally speaking, Jensen said Latin America consumers are “obsessed with beauty products” from a very young age. And the region has a “much younger population” compared to Europe and North America, which means there is “definitely a lot more of that sway” when it comes to beauty trends, she said.

Fragrances and fragranced personal care, for example, is trending in Latin America at the moment, as consumers take layering one step further; building out entire routines around scent profiles. Starting with “a full sensory experience” whilst showering, using heavily scented shampoos and body washes, consumers then move onto body mists and regular fragrances post-shower to create a “unique scent experience that is very individualized”, she said.

Jessica Phillips, VP of merchandising for strategic initiatives and owned brands at Ulta Beauty, said there are certainly plenty of “beauty enthusiasts” in Mexico, the LATAM market where Ulta Beauty kickstarted its international expansion last year, before entering Europe through its acquisition of Space NK.

In Mexico, for example, hair care at Ulta Beauty has “surpassed expectations”, Phillips said, fueled by premiumization of the category and lots of “really great innovation” which has taken it far beyond its mass market roots.

Beauty engagement, overall, is going well in Mexico, she said, and Ulta Beauty will continue expanding into the market over the next year, opening another eight or more stores.

Growth potential

According to Circana data, Latin America represents a very small volume of the global beauty market it tracks–less than 5%–despite it being such a large market geographically.

Growth in this region, therefore, should target the “very large” mass retail channel whilst also playing into the direct-to-consumer and direct-selling models which remain “very important” amongst consumers, Jensen said.

Phillips said that for Ulta Beauty, “new-to-market brands” and “brands you can’t find anywhere else” are the ones really connecting with beauty enthusiasts in Mexico.

Asked how Ulta secures these new brands, she said there are several aspects considered. “The core of it is, we want great goop. The product has to be exceptional,” she said. But it also has to have a really strong founder or brand story and a solid team behind it who can execute the brand vision well, she said.