Responsible marketing of natural cosmetics
Responsible marketing of natural cosmetics
Business Model Description
Creating highly demanded organic products for the face and body using sustainable production methods while also offering employment opportunities and income to Amazonian communities.
Expected Impact
Promoting the overall well-being of people through natural cosmetics made from high-quality natural ingredients
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Macroregion Selva
- Region Lima y Callao
Sector Classification
Consumer Goods
Development need
- The manufacturing sector represents 16.52% of the GDP for the year 2022(1) and employed 1.6 million people as of September 2022 (2). In December 2022, the fast-moving consumer goods sector experienced a decline of -8.3% compared to December 2021. However, over the course of the year 2022, the variation was -2.8% (3).
Policy priority
- National Concerted Plan for the Promotion and Development of Organic or Ecological Production - PLANAE 2021-2030 (13)
- National Program Your Company, created to contribute to the productivity of micro and small businesses (15)
- Haku Wiñay/Noa Jayatai Program, which provides technical and financial assistance to rural families to develop sustainable productive activities (25)
Gender inequalities and marginalization issues
-The employment activity rate for women was 54.5% in 2020 and 63% in 2021, which is lower than that of men at 78.4% (9)
-Income disparities affect consumption patterns: Women's average income is 69.6% of men's income (10), and in 2021, men's labor income increased by 10.7% while women's decreased by 1.1% (11)
Investment opportunities introduction
- Mass consumption continued to grow by 11.0% during the second quarter of 2022 (23)
-The projection for the growth of the Peruvian economy in 2022 is 3.3% (24)
- Entrepreneurial MIPYME Fund promotes reactivation by allocating funds for business innovation, management improvement, and market access promotion (17)
Key bottlenecks introduction
- Inflation in 2022 was 8.56%. This reduces the purchasing power of the population (15)(16)
- Political instability limits investment opportunities (21)
- Regulatory permits provided by DIGEMID slow down the establishment of companies in the sector (26)
Consumer Discretionary Products
Development need
The cosmetic industry is facing the biggest challenge in its history: becoming less polluting. In 2022, the cosmetic sector projected sales of USD 2,127 million in the Peruvian market, representing a 6% growth compared to 2021. This growth was coupled with the expansion of the e-commerce channel, which increased by 8% despite the COVID-19 pandemic (27)(21)(7).
Policy priority
-National Concerted Plan for the Promotion and Development of Organic or Ecological Production - PLANAE 2021-2030. This plan aims to enhance the competitiveness and sustainability of ecological production in the country (28).
Law No. 29196 on the Promotion of Organic or Ecological Production, which promotes the sustainable and competitive development of organic production (29).
Gender inequalities and marginalization issues
- Businesses led by women have increased and are primarily concentrated in tertiary activities such as commerce (39.8%), services (27.5%), and agriculture (26.8%). However, in the manufacturing sector, 38.7% of micro and small businesses (MYPES) are led by women, with an average age of 45 years, a level that has grown in recent years (30).
Investment opportunities introduction
MIPYME emprendedor: promotes the reactivation of micro, small, and medium-sized enterprises through non-financial instruments, including technological diffusion, fostering business innovation, improving management, and promoting access to markets. It has a fund of USD 39.9 million (31).
BBVA provides financing to Natura for a total of $378,378 (34).
Key bottlenecks introduction
- Inflation in 2022 was 8.56%. This reduces the purchasing power of the population (15)(16)
- Political instability limits investment opportunities (21)
- Regulatory permits provided by DIGEMID slow down the establishment of companies in the sector (26)
Consumer Discretionary Products
Pipeline Opportunity
Responsible marketing of natural cosmetics
Creating highly demanded organic products for the face and body using sustainable production methods while also offering employment opportunities and income to Amazonian communities.
Business Case
Market Size and Environment
< USD 50 million
5% - 10%
The sales in the Cosmetics and Personal Care sector are expected to total US$ 2,304,864,865 in 2023, representing a growth of 6.2% compared to 2022 (35).
Indicative Return
5% - 10%
20% - 25%
Business plans for the development of a natural cosmetics store achieve a return on investment between 20% and 30%. (33)
Investment Timeframe
Short Term (0–5 years)
Investments in the natural cosmetics segment typically have a return on investment period of 2 to 3 years. (37)(38)
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Market - High Level of Competition
Market - Highly Regulated
Impact Case
Sustainable Development Need
Approximately 40% of Amazon residents live below the poverty line (39). It is crucial to create growth opportunities for these communities, which can be achieved through the generation of employment opportunities and the promotion of the preservation of their traditions and customs
Gender & Marginalisation
The female workforce is mainly involved in the commerce, services, and agriculture sectors, yet they consistently receive lower incomes, averaging 27.4% less than their male counterpartss (10). Additionally, 53% of women are in vulnerable jobs, compared to 43% of men (40)
A high percentage of women (32.5%) do not have their own income, or their average income is lower than that of men. Efforts are being made to reduce this gap by strengthening their productive capabilities and autonomy. (10)
Expected Development Outcome
Promote responsible consumption of organically produced personal use products, with local producers from the Amazon and Andean communities as allies, who provide inputs and products crafted naturally or organically.
Gender & Marginalisation
By promoting local natural/organic products, the goal is to generate better income for women in communities while respecting their traditions and way of life.
Primary SDGs addressed
12.2.2 Domestic material consumption
12.2.1 Material footprint, material footprint per capita, and material footprint per GDP
26% of Peruvians stated they are willing to pay more for products they consider to have a positive impact on the environment (20).
The sector in the country employs more than 650,000 people, including consultants, production, and marketing (36).
Secondary SDGs addressed
Directly impacted stakeholders
People
Corporates
Public sector
Indirectly impacted stakeholders
Public sector
Outcome Risks
A decrease in purchasing power due to an inflation crisis that affects the purchase of non-essential products.
Shortage of raw materials caused by political, social, or natural factors.
Groups of people who do not get to experience the nutraceutical benefits of products because they are not affordable within their family budget.
Impact Risks
The possibility that ancestral cultural practices in indigenous communities may be affected due to the implementation of natural cosmetics initiatives.
The threat of deforestation due to uncontrolled growth or expansion of the business model.
Groups of people may see the opportunity to produce inputs required for the business but lack knowledge of sustainable production practices.
Impact Classification
What
Promotes local consumption of natural organic products.
Who
Improvement in income within jungle communities, while also promoting sustainable production.
Risk
Increase in inflation leading to rising production costs and a reduction in their market share.
Contribution
Provides sustainable solutions through everyday-use products, promoting well-being.
Impact Thesis
Promoting the overall well-being of people through natural cosmetics made from high-quality natural ingredients
Enabling Environment
Policy Environment
National Development Strategic Plan 2050 aims to establish surveillance systems to increase the consumption of organic and environmentally certified products (5).
The Centers for Productive Innovation and Technology Transfer (CITE) contribute to improving the productivity and competitiveness of micro, small and medium-sized enterprises (MSMEs) and the productive sectors (4).
PROINNOVATE is a co-financing fund designed to strengthen technological development, productive growth, and entrepreneurship (4).
Venture Capital Fund for Innovative Startups provides financing for startups in their growth and consolidation stages (26).
National Program for Employability aims to achieve the employability of individuals aged 15 and above who are in socio-economic vulnerability through job training, promoting self-employment, and certification of labor competencies (13).
Financial Environment
Fiscal incentives: In 2020, the Peruvian government provided tax relief measures in response to the health crisis. These measures included the postponement of income tax declaration and payment, extension of the declaration and payment of the temporary net asset tax, release of withholding funds, among others.
Regulatory Environment
Law No. 29337 that establishes conditions for competitiveness
Law No. 30709, which establishes measures for protection against gender-based wage discrimination (14)
Marketplace Participants
Private Sector
NUA
Government
MINAM
Multilaterals
IFC/CAF/SECO
Non-Profit
NESsT, Fundación Wiese, ACCA
Target Locations
Macroregion Selva
Region Lima y Callao
References
- (1) INEI (2023). Informe técnico de producción nacional diciembre 2022.
- (2) INEI (2022), Comportamiento de los indicadores de mercado laboral a Nivel Nacional
- (3) BCRP (2023). Notas de estudios diciembre 2022
- (4) PRODUCE (2022), ProInnóvate celebra 15 años impulsando empresas innovadoras en todo el país
- (5) PCM (2022), Plan Estratégido de Desarrollo Nacional al 2050
- (6) Poder Ejecutivo (2020), D. L. N° 1455. Que aprueba el Programa Reactiva Perú
- (7) CAPECE (2020). Reporte de la Industria E-commerce en el Perú
- (8) CCL (2022). Crecimiento del sector cosméticos e higiene.
- (9) KANTAR (2022). El consumo de los hogares peruanos
- (10) INEI (2022). Perú Brechas de Género 2022
- (11) MTPE (2022). Demanda de ocupaciones a nivel nacional 2022
- (12) INEI (2022). Estadísticas con Enfoque de Género
- (13) MIDAGRI (2021), Plan Nacional Concertado para la Promoción y Fomento de la Producción Orgánica o Ecológica - PLANAE 2021-2030:
- (14) EL PERUANO (2017). Ley que prohíbe la discriminación remunerativa entre varones y mujeres
- (15) BCRP (2022). Reporte de Inflación . Diciembre 2022
- (16) INEI (2023). Variación de los Indicadores de precios de la Economía. Diciembre 2022
- (17) MIDAGRI (2022). Problemas tipo de la agricultura peruana
- (18) MTPE (2022). Encuesta de Demanda Ocupacional (EDO)
- (19) NUA
- (20) STAKEHOLDERS (2022). Consumo Responsable en el Perú
- (21) PEPINO
- (22) GB CORP
- (23) KANTAR (2022). Consumo masivo continuó creciendo durante el segundo trimestre del 2022
- (24) MEF (2022). En el 2022 la economía peruana crecerá 3,3% - Nota de Prensa
- (25) FONCODES (2022). Programa Haku Wiñay / Noa Jayatai
- (26) DIGEMID. Resolución N° 1906 que modifica, el Reglamento de la Decisión 516 sobre Control y Vigilancia Sanitaria de Productos Cosméticos
- (27) VOGUÉ (2020). El objetivo de la industria cosmética para 2030
- (28) EL PERUANO (2021). D. S. N° 011-2021-MIDAGRI que aprueba el Plan Nacional Concertado para la Promoción y Fomento de la Producción Orgánica o Ecológica - PLANAE 2021-2030
- (29) GOB.PE (2017). Ley N° 29196, Ley de promoción de la porducción orgánica o ecológica.
- (30) GOB.PE (2021). MYPE lideradas por mujeres generan más puestos de trabajo
- (31) MEF (2023). Fondo MIPYME Emprendedor - Nota de Prensa
- (32) EL COMERCIO (2015). Perú apuesta por la cosmética en base a productos naturales
- (33) ESAN (2021). Plan de neogcios de una tienda virtual de cosméticos naturales.
- (34) BBVA (2023), BBVA en Perú otorga su primer leasing sostenible a Natura Cosméticos
- (35) Gremio de Cosmética e Higiene Personal (Copecoh) de la Cámara de Comercio de Lima (CCL) (2023), Sector cosméticos e higiene facturará más de S/ 8.500 millones en el 2023
- (36) La Cámara (2022), Angel Acevedo: “Sector cosméticos crecerá hasta 3% en primer trimestre”
- (37) Universidad Peruana de Ciencias Aplicadas-Universidad Europea de Madrid (2015) BELLECOM Empresa comercializadora de cosméticos a través del canal de venta por internet
- (38) Universidad Peruana de Ciencias Aplicadas (2019) Glamour Makeup Boutique de Cosméticos
- (39) Instituto Nacional de Estadística e Informática (2021) Encuesta Nacional de Hogares
- (40) IDB (2021) La participación laboral de las mujeres del Perú: 10 mensajes clave y 6 recomendaciones de política