The Importance Of Well‑Developed Channels For CosmeticsMon, 06/24/2019 - 12:45
Q: What are the main challenges IM Natural is encountering given the country’s economic and political landscape?
A: The cosmetics industry develops indispensable goods. Both men and women use these treatments to enhance their physical appearance and to consequently feel better in terms of self-care and self-esteem. The industry is in a latent state like other economic and industrial activities in the country due to the existing uncertainty resulting from the new administration’s public policies. The industry is experiencing an economic deceleration rather than a recession. Our sales have decreased and the entire cosmetics sector is contracting. This economic situation is a detriment to our providers because lower production represents diminished demand for supplies and raw materials. This situation eventually transforms into a cycle and we need greater trust in the government to handle public policy more efficiently.
While our most important market is self-service stores, they are also suffering from this economic deceleration and decreased demand. We need to restructure our sales strategy to find new ways of negotiating with our main clients. We must also focus on adjusting our company’s industrial engineering to manage our expenses.
Q: How has your company expanded its sales channels?
A: We are expanding our exports and our manufacturing process. Final consumer purchases have been affected and regardless of our business plan, we have been forced to accelerate the processes for finding new distribution channels apart from those impacted by the economic uncertainty. We manufacture and brand products for other clients aside from our own brand. Exports are also important for us because the Mexican banking system takes this kind of business activity into account when making certainty assessments. Our main foreign markets are the US, Guatemala, Colombia, Australia, Ecuador and Spain, to which we ship around 5 percent of our total production.
Q: What products do you manufacture for other brands?
A: We both manage and are direct distributors of some product licenses for other brands like Hello Kitty and Hot Wheels for children, and Chivas and America for soccer fans. We are working toward the acquisition of more licenses as they have become an interesting development for our company.
Our distribution channels are well-established and attractive for foreign companies because they are aware of our reach. This distribution is carried out through supermarkets like Walmart, Chedraui and pharmacies like Benavides. Our clients know that they will be able to reach their market through our products. Despite managing the makeup segment, we have also been managing other markets for drugstores and naturist retail for almost 30 years. Department stores like Liverpool and Palacio de Hierro are also have us on their radar, even though they are not our primary market.
Q: What role will online distribution channels play in your business in the short term?
A: These channels will grow in importance by helping us create product awareness and reaching our final consumer. While we benefit from word of mouth, one of our plans is to enhance our marketing efforts despite the tradition of cutting expenses in an economic crisis. We need people to know our product more than ever.
Q: What are your plans for targeting men?
A: We launched a line for men four months ago. The products that have been most successful in this market are moisturizing and shaving creams, and products for beards and mustaches. Our company is now undergoing a knowledge development phase so we will probably wait to see the public’s reaction before launching another product. Overall, our company’s most important product is eyelash mascara. Our brand is categorized as one of the most important mascara brands despite not being distributed in the market’s niche points alongside L’Oréal, Maybelline and MAC.