Brazilian Cosmetics Companies Reinvent Themselves to Keep Financial Health During the Pandemic

Brazilian Cosmetics Companies Reinvent Themselves to Keep Financial Health During the Pandemic

By Silvia Lourenço
in-cosmetics Latin America exclusive article

In the first minute of 2020, champagne cups celebrated what seemed to be the beginning of a promising year for Dios-Chechetto family. Gathered with her family at their beach house in Rio Grande do Norte, Cris Dios – cosmetologist and businesswoman who is the head of businesses such as hair salon chain Laces and Hair, the eCommerce Slow Beauty, and Aveda Brasil –  was making plans with her husband Itamar Chechetto. “Our company had just opened two new branches, a Hair and Laces salon in Rio de Janeiro and the first Aveda Brasil in Sao Paulo, and our expectations were very high, we were hoping for expansion and growth. When the pandemics started and we had to shut the doors down it was hard to reorganise everything”, said the businesswoman during an Instagram Live, promoted by in-cosmetics Latin America at the beginning of April.

On the days that followed the initial impact of the arrival of the pandemic, Cris and her team, who also manufacture organic cosmetics for several brands at their own site in Curitiba, started to look for solutions to keep their company active. The first measure taken was to call a halt to all the products’ production altogether and kick-start the production of Alcohol gel, a project that was very challenging according to the cosmetologist, firstly due to the difficulty in acquiring the raw material, at which point already had its price way above the market’s average, and secondly for having to develop the product in record time – from its packaging and labelling to the organisation on how the products were to be placed in the market. In 10 days, the alcohol gel was available for sale in chains as Droga Raia and Pão de Açúcar.

One of Cris Dios’ major concerns is how to keep her 270 employees. As most of them are commissioned, the company has distributed alcohol gel so that they could get extra income during this period. Besides that, they have come up with individual codes for the employees to resell the products of the eCommerce Slow Beauty and get a commission from it. Cris and her team have intensified their digital work, creating online promotions like their participation in “Movimento Estima”- a movement which gives a health care worker the same beauty treatment that a client purchases through the website to be used after the pandemics. “Even facing so many challenges, we have to keep the team’s spirits up, we’re using the moment to hold online recycling training sessions, and we’ve been praying together during our weekly meetings, and talking a lot to help each other out”, says Cris Dios.

Patrícia Camargo, who is also born in the city of Sao Paulo and the co-founder of the Care Natural Beauty company – focused on vegan and organic cosmetics – has also shared with our team, through Instagram’s Lives, how they have reorganised themselves to face the crisis: “The first measure taken was to postpone to the second semester some of the new products launching, we have only kept in June the launching of a product that was ready to be released – having had their efficacy tests finished, only to be bottled”, says the businesswoman.

Care has given their production line in their factory to the making of alcohol gel and despite the crisis forecasted, they haven’t fired anyone. Not only have they kept all their team, but they have also absorbed the demands of an NGO named Orienta Vida, which works with 500 craftswomen by purchasing fabric masks to offer their clients and helping the artisans to keep their income.

The strategy of the company’s founders, Patricia and Luciana Navarro, was to shift all the budget, which was to be used with the opening of new branches, to their digital work. During the Instagram Live, Patricia said that what really helped the businesswomen to keep calm in order to develop new strategies was their participation in Sephora’s Accelerate Program last year. One of the greatest lessons they learned in the program was to plan carefully the company’s next moves. A month after promoting our Instagram Live, our team got in touch with Care to find out whether the strategies had worked: “We’re very happy, in March we had a slight decrease, but in April, in the middle of the pandemic, we were able to grow 30%, something beyond our imagination when it all started” celebrates Patricia.

From Florianópolis, straight from imposed social isolation, the businesswoman Patricia Lima, founder of Simple Organic brand, was the first to talk to in-cosmetics Latin America as soon as retail was shut. During the very first days, she faced a few challenges, such as negotiating deadline and payment with suppliers. “We have 20 stores in Brazil, mostly franchises, and we had to shut all of them down. The wholesale clients cancelled the orders and postponed their invoice payment. Small companies don’t have cash flow, you work today to pay your bills tomorrow, so as soon as you have your sales channel frozen, you end up having to renegotiate with suppliers”, says the businesswoman.

Despite the initial scare, Patricia was able to move quickly and went ahead with a project of sales expansion which would only be applied in the second semester: she opened applications so that the brand’s clients could apply to resell the products online, getting a 10% commission. On a single day, the brand received more than 700 applications and the products sold are leaving the stores, enabling them to clear the stocks that would have been frozen otherwise.

Regarding purchasing of the raw material in order to keep manufacturing their products, Patricia explained that Simple Organic built an extra safety stock over the last year to be able to meet this year’s expected growing demand. As the pandemics came to be, they stopped the production, and they only kept the release with a raw material that will be used in a very innovative product, the other products’ production was postponed to a time in the future when the situation improves.

The businesswoman Júlia Alcântara spoke to us straight from a farm in Idaho, USA, where she’s currently sheltering in place. She told the followers of in-cosmetics Latin America about how her cosmetics brand, Orna Fórmula, and all the other businesses of Orna Group – which include an accessories brand, a café in Curitiba and a branding school – are dealing with the pandemics.

Júlia, who used to be a digital influencer alongside her sisters Bárbara and Débora before becoming businesswomen, also shared relevant branding tips for social media with our audience, the brands’ relationship with beauty influencers, the importance of digital presence, amongst other subjects which were highly relevant to businesspeople from the industry.“I have no doubt that the brands which had already done a good digital job were at the forefront during this pandemics, but there’s always time for the companies to reorganise themselves and grow in this area”, suggests the businesswoman.

Our Instagram Lives take place every week on our Instagram page. Follow us at @incoslatam for more updates!

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