Beauty booms as Brazil consumers shrug off crisis

Tue Sep 15, 2009 7:03pm EDT
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By Stuart Grudgings

RIO DE JANEIRO (Reuters) - In her apartment in a tough Rio de Janeiro suburb, Geni Monteiro Coimbra pauses as she ponders a teasing dilemma -- the tutti-frutti or the strawberry lipstick?

After a quick consultation with her local Avon lady, strawberry wins the day, and the 46-year-old Brazilian housewife signs off on a cosmetics bill of 50 reais ($27).

The sale wrapped up, Heloisa Almada Contreira marches on to the next of her 80 or so clients. She says she's selling about 1,700 reais ($930) worth of beauty products a week, around 25 percent ahead of last year's sales.

"For them, it's a necessity," said Almada Contreira, 51, who has been selling for the U.S. cosmetics giant in the low-income area of Baixada Fluminense for more than 13 years. "Brazilian women can't go without their make-up."

The global financial crisis last year halted five years of strong economic growth in Brazil that had pulled millions out of poverty and created a new class of consumers.

A year on, these new consumers are emerging relatively unscathed from a recession which only had a small impact on jobs and income.

Consumer confidence and demand for credit have returned to near pre-crisis levels and the government says the economy is set to grow 1 percent this year, even as several other major economies struggle to emerge from recession.

With Brazil's economy, the world's 10th largest, relatively closed to trade, its vast internal market of 190 million people is proving key to the recovery.   Continued...