February 25, 2024

SANTIAGO — María Obregón is 41 years old. She is married with three kids and lives in Arica in northern Chile. For 15 years she has been selling Avon beauty products, turning her work into a family business in which she has been joined by her husband and even the youngest of her children.

“We all work together,” she says, “and I’m doing very well, thank God.” She has excellent customers, she told América Economía speaking from home, and “excellent people around me. It’s very hard work. It may not seem so, but it is. I’m so happy to do it. I feel totally fulfilled, organized and so grateful for all the opportunities given to me.”

During her time with Avon — one of the world’s most iconic beauty brands, founded in New York in the 19th century — Obregón has won herself vacations and other prizes including a brand-new car. She devotes a large part of her day to expanding and cultivating her customer base, promoting products on social media and now, organizing deliveries.

“Avon for me means freedom,” she says with unconcealed delight. “It means independence. It means fulfilling myself as a woman, as a person.”

Beauty products vs. the economy

In the Chilean capital Santiago, a group of influencers recently gathered to discuss the results of a study commissioned by Avon on the prospects of the beauty business after the global pandemic. Avon’s director for Chile, Karina Suárez, opened the session held at a co-working office, saying that the company would keep selling its products from a catalogue, in both print and digital formats. Suárez described Avon’s business model as “encouraging female enterprise”. A beautician was at hand during the seminar, demonstrating products on a volunteer.

The study, conducted by the consulting firm Censuswide, covered a sample population of 7,000 women in seven countries including the United Kingdom, Italy and Turkey. Among its most prominent findings: perfume (63%), moisturizing cream and eye makeup (53%) were the products women used most “in difficult times,” and millennial and Generation Z women were the age groups most sensitive to economic downturns.

Broadly, women today are disinclined to spend too much on beauty treatments. Over 20% of respondents said they improvised with their looks and products to save money, and almost 15% believed it wasn’t right to spend money on beauty treatments “in this economy.”

The fight to stay fresh

Recent months have been difficult for Avon and its Brazilian owners, Natura & Co. The conglomerate, which sold its luxury brand Aesop to the French firm L’Oréal for over $2.5 billion, may soon take the same route with another brand, The Body Shop. Natura acquired The Body Shop in 2017 to exploit growing demand for ecological beauty products. But today its priority is to return to maximum profits and spending discipline, prompting a consolidation of assets and interests, reports Reuters.

Its strategy remains broadly based on personal selling by representatives, the majority of whom are women.

In the fourth quarter of 2022, the company made a net profit of approximately $2 billion. CEO Fabio Barbosa has said that In Latin America, the firm plans to merge the Natura and Avon brands into a single name, Onda 2.

Cristian Diez, a retail sector researcher with the University of Chile’s CERET center, told América Economía that Natura is dissatisfied with its “very low” profit margin and return rates and wants to focus again on its main business, direct sales, and with greater emphasis on Latin America, where it has shown the best results and biggest growth. Its strategy, he said, remains broadly based on personal selling by representatives, the majority of whom are women. This means “they are still [in the process of] adapting to younger consumers more used to buying online, and [for whom] advertising on social media is important.”

Avon’s challenge as a traditional brand, he said, was to be relevant to younger women, not merely as a brand they are familiar with but as their preferred choice as buyers. Natura has managed this better being a newer brand, he said, while The Body Shop failed to be profitable enough in Latin America partly because of the pricing of its natural products.

The future of the beauty sector

To be sure, the beauty sector overall is far from ailing in spite of the pandemic, wars and economic turbulence. Management consultants McKinsey estimated in a report in May that worldwide, the beauty sector, including perfume, was in line to generate $430 billion in sales revenues in 2023, which could jump to $580 billion by 2027. The market for premium products is expected to grow faster than the “mass beauty” segment.

We are supporting the economic independence of men and women who want to work selling cosmetics.

Avon’s global head, Angela Cretu, has reiterated the firm’s commitment to its sales reps. These are millions of women across the world on whom the firm invests $100 million a year by way of training and bonuses. Karina Suárez, the firm’s boss in Chile, wants personal sales to continue, strengthened by an added component of digitalization.

She says Avon was “the first social network” when it began in 1886. “I think direct selling has retained the patterns it always had, and these have spread to other channels. What Avon has, which you can’t replace, is a consultant’s ties and relationship with her customer”.

The firm will keep working with sellers without asking them for any upfront payment, says Suárez. “[We’re] not asking for anything at all, no starting capital or deposit. We hand them the tools, we train and give them the leaflets, samples and everything else they need to kickstart their business. At the end of the day, we’re not just a cosmetics business. We are supporting the economic independence of men and women who want to work selling cosmetics or household products.”

Camila Saldaño, a 25-year-old beautician and image consultant attending the seminar in Santiago, agreed. Working with Avon, she said, was “very important” to her and an “opportunity and platform to get people to know me. In that sense, Avon strengthens my career.”

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