Natura
Cosméticos S.A. is one of the leaders in marketing fragrances and cosmetics in
the fifth largest cosmetics market in the world – Brazil. The company has
strong 450,000 salesmen called “consultants” who pioneered direct selling in
Brazil. Natura Cosméticos S.A. only trails Avon Products Inc.’s subsidiary in
Brazil, the Avon Cosméticos Ltda.
Natura is said
to have a distinct corporate value and has the reputation of a high corporate
ethical standard. The company executives make sure that they are updated with
recent developments in biochemical, chemical and pharmaceutical researches.
Natura’s story
started with an economist named Antonio Luiz da Cunha Seabra who was with
Sperry Rand Corporation when he established Natura in 1969. He started the
business with just $9,000 and a handful of Jean-Pierre Berjeaut’s cosmetic
formulations. The first store was in Sao Paulo. It started like a luxury
boutique with four workers who promoted Berjeaut’s natural lotions and creams.
The store did
not do well so Natura changed from a retail store to a direct
selling business in 1974. The salesmen did a door-to-door marketing of the
products and earned by commission. The sales force grew to 2,000 and the annual
average sales rose to $5 million.
Natura’s growth
in direct selling was the result of the company’s ability to anticipate the
market trends. Before the retailers realize their need, Natura has already
responded earlier. By the time the needs arise, Natura is already there with
the solutions.
Direct selling
has also enabled Natura to sell all their product lines as compared with
focused sales only on best selling products with retailing. With direct
selling, selling efforts are concentrated on all potentially earning products.
In 1990,
Natura’s sales were reported at $180 million. But the economic
recession in 1992 forced Natura to lay off 270 workers. During the
recession, Seabra and another partner named Guilherme Peirao Leal purchased the
stakes held by Yara Pricolli, another partner, for $25 million. Seabra and Leal
recruited experienced executives from their large competitors and laid the
basis for Natura’s further growth.
In 1994,
Natura’s sales reached $350 million. The company held 14% of the Brazilian
cosmetics and personal hygiene market. In 1996, sales reached $580 million.
Salesmen were up by now to 160,000, with each consultant sold selling an
average of $5,760.
In 2000,
Natura’s portfolio reached 300 items. The recent years also featured Natura’s
commitment to R&D making the company as Brazil’s biggest investor in
scientific research and testing.