Luxury Cosmetics Brand Reduces Prices in Brazil by Up to 50 Percent
RIO DE JANEIRO, BRAZIL – Jeunesse, a North American company of rejuvenation products, has a new strategy for its Brazilian operation: to slash prices by half. Based on the direct selling model, the company operates two lines: cosmetics for skincare and nutrition.
The drop in prices reaches nine of the 14 brands sold in Brazil. “We want to democratize luxury”, says Lásaro do Carmo Júnior, the company’s CEO in Brazil. Jeunesse has also increased the number of new launches in the Brazilian market: since the start of the year, 12 new products have reached the country.
With 200 employees, Jeunesse’s Brazilian operation generated R$600 million (US$120 million) in 2019 and, for this year, it expects to grow by 20 percent. Founded in 2009 in Florida, United States, and present in 148 countries, Jeunesse reached global sales of US$1.1 billion in 2019. In 2018, the figure had been US$1.46 billion.
Company products are not cheap because, according to the executive, there is great technology and added value. But, in order for the best known brand to remain in the country and increase sales, prices needed to be reduced.
An example is Jeunesse flagship, the Luminesce line of anti-aging products which promises to improve the appearance of fine lines and wrinkles. Luminesce Cellular Rejuvenation Serum, a product costing R$704,45 is now available for R$359, while Luminesce Daily Moisturizing Complex had its price reduced from R$470,85 to R$260.
The complete kit with six products of the Luminesce line can be bought for almost US$2,100 at the Dafiti website. A can of the energetic Nevo, on the Americanas website, sells for nearly R$20 and a soap bar of Jeunesse Spa, for R$30. The company operates only through its official website and with direct sales, through 400.000 distributors in Brazil – 50.000 actives per month.
According to the CEO, sales on marketplace websites are done by distributors and not directly by the company, and official product sales, as well as the price reduction policy, is only applicable to Jeunesse official channels.
The price cut yielded results: the Luminesce line, for instance, has already increased 150 percent in sales. To reduce prices, the company has shrunk its margins, negotiated with suppliers, and seeks to allow a more national production. Around 40 percent of the products are imported. In relation to those that are produced in Brazil, 90 percent of the raw material used is imported.
Another driver for the increase in revenues is the growth of the sales force. With the pandemic, more professionals experienced a reduction or loss of income and sought direct sales as a means of supplementing the family budget. The number of Jeunesse distributors has grown by 32 percent since the start of the year.
Carmo has been with the company for a year and a half, coming from companies such as Jequiti, where he spent six years and raised the revenue of Silvio Santos group’s division from R$20 to R$600 million. Now, the goal is to bring Jeunesse into the Brazilians home.
Source: Exame
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