The Challenge of BRIC Multinationals by Rob Van Tulder Alain Verbeke Jorge Carneiro Maria Alejandra Gonzalez-Perez

Author:Rob Van Tulder, Alain Verbeke, Jorge Carneiro, Maria Alejandra Gonzalez-Perez
Language: eng
Format: epub
ISBN: 9781786353504
Publisher: Emerald Group Publishing Limited
Published: 2016-11-19T05:00:00+00:00

NATURA’S INTERNATIONALIZATION

Natura concentrated its efforts in Brazil and somehow neglected foreign markets because “the growth of the operation in Brazil was impressive – two digits for many years; a tenfold or twelvefold growth in the 1990s for example,” says Mr. Toledo. Natura’s international expansion began in the 1980s and focused in Latin America because of the physical proximity and the cultural affinity. The first foreign country was Chile in 1982, with the opening of Chilean-owned Jâmbar y Cia Ltda, to run the distribution in the country. A few years later, Natura bought these distribution assets, as a way “to build the brand the way we believe” (in the words of Mr. Toledo). A year later, in 1983, Natura reached Miami (an American state with strong Latin influence) with the Numia brand. In 1987, Natura entered the Bolivian market via a partnership with a local distributor. In these first three attempts, Natura’s internationalization did not achieve very good results, which led the company to withdraw from the US market. Specifically in the case of Chile, one of the problems lied in the dominant share of cosmetics sales through stores, with direct sales representing less than 20% of the total. Another important issue is that Chile features high employment rates and (relatively) high income – therefore, Chilean women are not so motivated to search for a complement of income, as do Brazilian women. Over the years, with price revisions and high investment in communication, Natura managed to reverse this scenario. Furthermore, Natura partnered with a local company, Labsa, and founded Belleza Internacional S.A. in 1990. In 1993, the company bought this operation and Belleza Internacional became a wholly owned subsidiary.

Natura continued to expand in Latin America, specifically in Peru and Argentina, in 1992 and 1994, respectively. As in the Chile example, the company entered both countries with local distributors. By 2000, the operations in these three countries were fully controlled by Natura, with administration and distribution centers in each of them. Having an own commercial team in Argentina, Chile, and Peru (although in Bolivia, they still keep the local representative) helped Natura grow faster because Natura is larger, or else more focused on its main cosmetics business, than the former local representatives – says Mr. Toledo. He adds, “but the local representatives did a good job in opening the way and building the brand” in the initial years. “This model was very successful,” complements Mr. Toledo.

In 2006, having already acquired considerable international experience, Natura started operations in Mexico under its full control. In the same year, the company expanded to Europe, with the adoption of a different model: a physical store in France. As a deliberate attempt to boost brand recognition, the opening of the Natura store in one of the most luxurious spaces in Paris (Fig. 3) marked the entry of the Brazilian company in the challenging and competitive European market. The physical store was expected to foster learning about the tastes and preferences of local consumers. The store was set

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