Mexico - G. Cosmetics Mexico - Cosmetics
Cosmetics
Cosmetics represent a best prospect industry sector for Mexico. This section includes a market overview and trade data.
Overview
Mexico is ranked in the top 10 markets in the world for cosmetics and personal care products, and it continues to be the second-largest market for beauty products in Latin America. Due to a strengthening economy and availability of a variety of both domestic and imported brands, consumption of cosmetics in Mexico has grown steadily over the past 15 years (Euromonitor 2017). Nevertheless, current market conditions such as uncertainty of the policies of the new Mexican administration, a strong U.S. dollar, and the renegotiation of the North American Free Trade Agreement have resulted in more moderate growth forecasts for the industry at least until 2020. Instead of an eight percent annual growth rate, experts now believe the beauty sector in Mexico could possibly grow up to four percent annually over the next two years (El Financiero 2018), which still represents opportunities for U.S. exporters in the sector.Mexico continues to attract large multinational companies that have established both manufacturing and distribution facilities in-country and use Mexico as their distribution center for Latin America. This is the case for multinationals that supply the mass market such as Procter & Gamble, Unilever, L’Oréal, and Beiersdorf. Mexico’s National Chamber of the Cosmetics Industry (Cámara Nacional de la Industria de Productos Cosméticos or CANPIEC) maintains good data on trends in the cosmetics industry. According to its 2019 data, the number of Mexican personal care brands has tripled since 2013, with several appealing to a younger audience looking for locally-sourced, environmentally-conscious products.
Since Mexico has free trade agreements with 50 nations, the Mexican consumer has been exposed not only to U.S. brands, but also to European, South American, and Asian brands. Mexico is a mature market with opportunities for select products that can differentiate themselves from products currently being manufactured locally, though it is important to take into consideration the fact that Mexico continues to be a price-driven market. Exporters can expect to face heavy competition and must be prepared to invest in marketing, through both traditional and nontraditional channels, to gain brand recognition.
Having a wide selection of beauty products at affordable prices has contributed to changing the taste, preference, and purchasing decisions of the Mexican consumer. The increased participation of women in the workforce, the popularity of beauty video blogs, and a change in perception from male consumers who are now comfortable investing in grooming products continue to motivate Mexico’s production of cosmetics and personal care products. Industry specialists note that the average consumer has gone from using only one hair care product in their daily routine to no less than three.
According to CANIPEC, the Mexican consumer spends on average close to USD 90 annually in cosmetics and personal care products. Of that, only 10 percent is spent on premium products. Locally-manufactured products mean lower prices than imported goods, and this is a critical element to consider if a U.S. exporter is planning on entering the Mexican market. It is a highly competitive market, but also one in constant evolution, and consumers are eager to follow world trends for beauty products (CANIPEC 2017).
Cosmetics and Personal Care Products Market in Mexico
(Figures in billions of USD)
| 2016 | 2017 | 2018 | 2019 (estimated) | |
| Total Local Production | 6.7 | 6.9 | 7.1 | 7.1 |
| Total Exports | 2.5 | 2.55 | 2.67 | 2.67 |
| Total Imports | 2.77 | 2.76 | 2.87 | 2.87 |
| Imports from the U.S. | .90 | .89 | .90 | .90 |
| Total Market Size* | 6.97 | 7.11 | 7.3 | 7.3 |
| Exchange Rates | 18.68 | 18.91 | 19.22 | 19.15 |
Sources: Mexican Secretariat of Economy (SE), Mexican Internet Trade Data System (SIAVI), and CANIPEC
Leading Sub-Sectors
Skin care
Historically a focus for women, the skin care segment maintains a solid position in the beauty industry. As with hair care, men’s interest in looking well-groomed and youthful has contributed to increased sales in this sub-sector. Additionally, CANIPEC has made efforts to educate the consumer on the benefits of using skin care products from a younger age to prevent, rather than correct, skin damage. Solar exposure awareness has been one of the areas that CANIPEC has particularly promoted in recent years. This has contributed to the growth of products with a dual functionality such as cosmetics and skin care preparations that also include solar protection. This sub-sector represents 20 percent of the market for personal care products.Hair care
The demand for hair care products has increased due to Mexican men’s increasing adoption of grooming products and the popularity of beards. It represents 20 percent of the presonal care market. In recent years, there has been a boom in barber shops and specialty stores catering specifically to men and their hair care needs. Additionally, hair extensions have become quite popular among the common consumer who now has access to both affordable low quality synthetic options and high-end natural hair extensions.Fragrances
Perfumes and body splashes continue to be a strong segment, especially with the presence of online retailers like Amazon Mexico, Vorana, Linio, Mercado Libre, and specialty stores such as Sephora, which have opened in Mexico and are quickly expanding across the country. Unfortunately, it is also one of the segments that is most affected by counterfeiting as well as being very mature. As a result, the introduction of new fragances requires hefty marketing budgets that many smaller independent manufacturers cannot afford. Fragrances represent 14 percent of the market share.
Makeup and nails
Color cosmetics including nails account for 15 percent of the market. They are sold mainly through retail channels and direct sales, but online retailers are quickly gaining popularity, especially since younger Mexican consumers follow the trends they see on the internet, where they primarily learn about popular U.S. brands. Many companies successfully enter the market by forming alliances with internet personalities (influencers) in the country to promote their brand among the younger population.The market for nails and related products continues to grow with local manufacturers leading the way, such as Organic Nails and several independent nail polish brands. There is also demand for popular U.S. nail polish brands that consumers discover through online video tutorials and blogs. Related accessories such as nail stamping plates and tools are also sought after by the Mexican consumer.
Opportunities
Mexico’s FDA equivalent, the Federal Commission for the Prevention of Sanitary Risks (Comisión Federal para la Protección contra Riesgos Sanitarios or COFEPRIS), updated regulatory standards that apply to cosmetics, perfumes, and personal care products in 2015. The objective was to harmonize Mexican requirements for cosmetics and personal care products with international standards to facilitate trade. With this update, several products that used to require sanitary registration to be imported into Mexico no longer do. This has resulted in cost savings as well as expedited import times since obtaining sanitary registrations can take at least six months when using an experienced broker. When only cosmetic claims are made, regulations for the import of cosmetics and personal care products are not complex and generally only require complying with labeling standards outlined in NOM-141-SSA1/SCFI-2012. Standard NOM 141 specifies the information that must be provided to let the consumer understand the function of the product and how it should be used, which must be in Spanish. The ingredients list can appear in the International Nomenclature Cosmetic Ingredient (INCI) format. Before exporting to Mexico, it is important to work with a Mexican importer of record to review the specific requirements that the product might have and ensure that the products are compliant with all applicable Mexican standards.Emerging niche sectors represent the best opportunities for growth without having to compete fiercely with multinational companies that dominate the mainstream market and spend considerable sums in marketing. Since the Mexican beauty sector is not a global trendsetter, niches that are more developed in the United States are in their early stages in Mexico, providing an opportunity for suppliers to pioneer in this arena.
Sunscreens and cosmetics with added sun block are both expected to increase in demand in the coming years. CANIPEC is boosting consumer awareness through educational campaigns about the risks of sun exposure. The Mexican consumer is becoming more savvy on this issue and is starting to look for products that include SPF. Since this segment currently only represents one percent of market share, there is much room for growth.
Beauty products for men, especially for hair grooming, have gained popularity in the last five years. In Mexico, this segment is expected to grow at rates of over 10 percent in the following five years due to the positive image that media trends have helped create among younger generations (Euromonitor 2017). Mexican brands have taken advantage of this trend and male grooming products made in Mexico are booming.
Finally, just as in the United States, organic and natural products have strong potential due to the international trends towards environmentally-friendly products. The biggest impetus for buying natural or organic personal care products is the perceived health benefit. The potential buyer is trying to make healthier choices and a positive contribution to the environment as well as preventing health issues that are perceived to be caused by chemicals used in mainstream personal care products. U.S. brands interested in selling to the Mexican consumer must be aware that there are several natural and organic Mexican brands that are gaining momentum, and more are created every month. These brands do not aim to compete with well-established commercial brands and do not invest heavily in marketing since they rely on social media and video bloggers to gain consumer awareness and brand recognition. These Mexican natural ingredient brands invest in well-designed packaging and can compete with international brands of the same category. The challenge for the U.S. exporter is to compete with locally-made products benefitting from considerably lower freight costs.
It is important to note that in the natural product sub-sector there is great uncertainty and expectation regarding the import of personal care products containing cannabidiol (CBD) oil. Marijuana– and hemp–derived products containing specified amounts of the chemical compound THC remain illegal under U.S. federal law, including the transport of those products over state and international borders. However, a 2018 directive from the U.S. Drug Enforcement Administration may signal an evolving approach towards regulation of these products. Meanwhile, the Mexican Government published regulations in October 2018 allowing for their import without cumbersome processes. Under the López Obrador Government starting in December 2018, there has been a retraction on this front, and in March 2019, the Mexican Secretariat of Health (Secretaría de Salud) announced that the guidelines were revoked until further notice to be reviewed by the new government authorities. There has been no announcement on the publication date of the new guidelines. As of May 2019, permits for the import of personal care products containing CBD oil are not being granted. Involvement in exportation and importation of CBD may subject you to criminal penalties until both the United States and Mexico have finalized their regulatory regimes. Please contact us for the latest developments.
Web Resources
| Cosmetology Chemist Association (SQM) | www.sqcm.org.mx |
| Federal Commission for the Prevention of Sanitary Risks (COFEPRIS) | www.gob.mx/cofepris |
| Mexican National Chamber of the Cosmetics Industry (CANIPEC) | www.canipec.org.mx |
| Mexican Internet Trade Data System (SIAVI) | www.economia-snci.gob.mx |
| Mexican Standarization and Certification Laboratory (NYCE) | www.nycelaboratorios.com.mx |
Events
- Expo Spa, Latin American Spa Association, May 24–25, 2019, Mexico City
- EBIO, Expo Belleza Internacional de Occidente, June 2–3, 2019, Guadalajara, Jalisco
- EBS, Expo Beauty Show, October 27–29, 2019, Mexico City
- The Mexican Healthy Products Summit, January 25–27, 2020, Puerto Vallarta, Jalisco
- Expo Belleza Monterrey, May 2020, Monterrey, Nuevo León
Contacts
For more information on the cosmetics sector in Mexico, please contact:
Yazmin Rojas
Commercial Specialist
U.S. Commercial Service—Monterrey
Tel.: +52 (81) 8047-3290
Yazmin.Rojas@trade.gov