Mexico - Country Commercial Guide
Cosmetics

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-02

Cosmetics and personal care products represent a best prospect industry sector for Mexico. This section includes a market overview and trade data.

Overview

Mexico is ranked in the top 10 markets in the world for cosmetics and personal care products, and it continues to be the second-largest market for beauty products in Latin America. Due to a strengthening economy and availability of a variety of both domestic and imported brands, consumption of cosmetics in Mexico grew steadily over the past 15 years. Nevertheless, current market conditions, such as uncertainty of the policies of the current Mexican administration, weakening of the Mexican peso versus the dollar up to 30 percent, and the COVID-19 pandemic have resulted in lagging growth and low growth forecasts. Instead of an eight percent annual growth rate, which some analysts had predicted based on the industry’s momentum in previous years, the beauty sector in Mexico did not even achieve four percent growth in 2020. Nevertheless, even if color cosmetics and fragrances see a downward trend, demand for personal care products is increasing, representing an opportunity for U.S. exporters.

Mexico is a mature market with opportunities for select products that can differentiate themselves from those manufactured locally, although it is important to consider that Mexico is a price-driven market. Exporters can expect to face heavy competition and must be prepared to invest in marketing, through both traditional and nontraditional channels, to gain brand recognition.

According to Mexico’s National Chamber of the Cosmetics Industry (Cámara Nacional de la Industria de Productos Cosméticos or CANIPEC) the number of Mexican personal care brands has tripled since 2013, with several appealing to a younger audience looking for locally-sourced, environmentally-conscious products. The Mexican consumer spends on average close to MXN 4,500 pesos, about USD 215, annually on cosmetics and personal care products. A small percentage of the population that can afford premium products is estimated to spend at least USD 2,000 annually on beauty products and treatments. It is important to note that this group represents only a very small percentage of the total number of consumers and competition from well established international brands that have both brand recognition and hefty budgets for marketing is intense.

Locally-manufactured products mean lower prices than imported goods, and this is a critical element to consider if a U.S. exporter is planning on entering the Mexican market. It is a highly competitive market, but also one in constant evolution, and consumers are eager to follow world trends for beauty products.

Cosmetics and Personal Care Products Market in Mexico
(Figures in billions of USD)

 

2018

2019

2020

2021(Estimated)

Total Local Production

7.10

7.15

7.14

7.15

Total Exports

2.67

2.65

2.56

2.62

Total Imports

2.87

3.00

2.64

2.91

Imports from the U.S.

0.90

0.92

0.86

0.92

Total Market Size*

7.30

7.50

7.22

7.44

Exchange Rates

19.23

19.26

20.00

21.00

*Total market size = (total local production + imports) – exports)
Sources: Mexican Secretariat of Economy (SE), Mexican Institute of Statistics and Geography (INEGI), and Mexican National Chamber of the Cosmetics Industry (CANIPEC).

Leading Sub-Sectors

Skin care

Historically a focus for women, the skin care segment maintains a solid growth position in the beauty industry. As with hair care, men’s interest in looking well-groomed and youthful has contributed to increased sales in this sub-sector. Additionally, associations and manufacturers have made efforts to educate the consumer on the benefits of using skin care products from a younger age to prevent, rather than correct, skin damage. Solar exposure awareness has been one of the areas that CANIPEC has particularly promoted in recent years. This has contributed to the growth of products with a dual functionality such as cosmetics and skin care preparations that include solar protection. Industry experts believe that the COVID-19 pandemic has had an impact on consumer trends and that self-care is now a higher priority. As such, demand for skincare and other products that prevent is expected to continue to grow in the coming years.  

Hair care

The demand for hair care products has increased due to Mexican men’s increasing adoption of grooming products and the popularity of beards. These products now represent 20 percent of the total personal care market. In recent years, there has been a boom in barber shops and specialty stores catering specifically to men and their hair care needs. Additionally, hair extensions for women have become quite popular among consumers due to both affordable low quality synthetic options and high-end natural hair extensions.

As a result of the COVID-19 pandemic and accompanying lockdowns, the number of barber shops declined in 2020. That notwithstanding, consumers turned to ecommerce to look for products that would allow them to continue their self-care and grooming regimens at home. As economic activity picks up again in 2021, this segment is expected to recover and continue to grow, as it was prior to the pandemic.

Fragrances

Perfumes and body splashes have traditionally been a strong segment, especially with the presence of online retailers like Amazon Mexico, Vorana, Linio, Mercado Libre, and specialty stores such as Sephora, which have opened in Mexico and are quickly expanding across the country. Unfortunately, it is also heavily affected by counterfeiting, as well as being very mature. As a result, the introduction of new fragances requires hefty marketing budgets that many smaller, independent manufacturers cannot afford. Domestic manufacturers continue to increase their market share especially in direct sales channels. Additionally, since the COVID-19 pandemic and shelter in place measures prevented socialization, the demand for fragances fell by more than 30 percent. Experts believe the recovery will be slow in this segment, especially for new brands.

Color Cosmetics and Nails

While color cosmetics, including nails, account for 15 percent of the market, the COVID-19 pandemic hit the color cosmetics subsector especially hard. The so-called lipstick index refers to the usual resiliency of cosmetics’ sales during economic downturns, with makeup typically seen as an affordable indulgence when bigger purchases are out of reach. Although this trend has proven to be true during other economic crises, due to the mandatory use of facemasks and lockdowns, the demand for color cosmetics, once considered essential, has fallen by more than 40 percent worldwide. Nevertheless, the use of facemasks has also focused attention on the eyes, creating more demand for color cosmetics related to eyebrow shaping and grooming, eyeliners, primers, and eyeshadows.

Color cosmetics and nails are sold mainly through retail channels and direct sales, but online retailers are quickly gaining popularity. This is especially true among younger Mexican consumers who follow the trends they see on the internet, where they primarily learn about popular U.S. brands. Many companies successfully enter the market by forming alliances with internet personalities (influencers) in the country to promote their brand among the younger population.

The market for nails and related products continues to grow, with local manufacturers leading the way. There is also demand for popular U.S. nail polish brands that consumers discover through online video tutorials and blogs. Related accessories such as nail stamping plates and tools are also sought after by the Mexican consumer.

Opportunities

Regulation of imported cosmetics and personal care products is not cumbersome if no miracle nor therapeutical claims are made and, in most cases, only require labeling compliance as outlined in NOM-141-SSA1/SCFI-2012. NOM 141 is a technical regulation that specifies the information that must be provided in Spanish to inform the consumer about the product’s function and use. The ingredients list can appear in the International Nomenclature of Cosmetic Ingredients (INCI) format. Before exporting to Mexico, it is important to work with a Mexican importer of record to review the specific requirements that the product might have and ensure the products are compliant with all applicable Mexican standards. Some ingredients might be in the list of forbidden ingredients or be included in concentrations that would make the product qualify as a pharmaceutical. For products being imported into Mexico it is important to work closely with a Mexican company that can obtain the necessary permits and make sure that labeling requirements are correctly met.

Emerging niche sectors represent the best opportunities for growth, without having to compete fiercely with multinational companies that dominate the mainstream market and spend considerable sums on marketing. Since the Mexican beauty sector is not a global trendsetter, niches that are more developed in the United States are in their early stages in Mexico, providing an opportunity for suppliers to pioneer in this arena.

Beauty products for men is a segment expected to grow at rates of over eight percent by 2025. Barber shops continue to be the fastest growing segment and, although international brands such as Unilever and Procter and Gamble dominate the market, there is an increasing demand for niche products. This has spurred the creation of local Mexican manufacturing of grooming products sold exclusively at barber shops and specialized beauty suppliers.

Organic and natural products have strong potential due to the international trends towards environmentally-friendly products, as well as a concern about harsh chemicals and their effects on the body. The biggest impetus for buying natural or organic personal care products is the perceived health benefit. With the COVID-19 pandemic, consumers appear to be more focused than ever on wellness and many are looking for formulations that are associated with fewer synthetic ingredients and more natural components. U.S. brands interested in selling to the Mexican consumer must be aware that there are several natural and organic Mexican brands that are gaining momentum, and more are created every month. These brands do not aim to compete with well-established commercial brands and do not invest heavily in marketing, since they rely on social media and video bloggers to gain consumer awareness and brand recognition. These Mexican natural ingredient brands invest in well-designed packaging and can compete with international brands of the same category. The challenge for the U.S. exporter is to compete with locally-made products benefitting from considerably lower freight costs. Still, U.S.-made organic and natural products have a good reputation with the segment of the population that can afford imported products.

It is important to note that in the natural product sub-sector there is great uncertainty and expectation regarding the import of personal care products containing cannabidiol (CBD) oil. Marijuana– and hemp–derived products containing specified amounts of the chemical compound THC remain illegal under U.S. federal law, including the transport of those products over state and international borders. However, a 2018 directive from the U.S. Drug Enforcement Administration may signal an evolving approach towards regulation of these products.

On January 12, 2021, Mexico’s Ministry of Health (Secretaría de Salud or SSA) published in the Mexico’s Official Gazette the Federal Health Regulations for the Medical Production, Research and Use of Cannabis and its Pharmaceutical Derivatives also called the “Medical Cannabis Rules”, which have now taken effect. Although these rules are not very specific regarding the use of CBD in cosmetics or other segments, this is expected to further open the door to personal care products containing hemp and CBD oil.

On June 28, 2021, Mexico’s Supreme Court resolved that the General Health Law´s blanket prohibition on the recreational use of cannabis and THC was unconstitutional. Although the Supreme Court’s resolution is a significant step, uncertainty still remains among the industry in general if regulations for personal recreational use and for other uses of cannabis such as industrial, cosmetic, or nutritional, are not promptly in place. 

Do note that involvement in the exportation or importation of CBD may subject you to criminal penalties until both the United States and Mexico have finalized their regulatory regimes. Please contact the U.S. Commercial Service in Mexico for information on the latest developments.

The current COVID-19 pandemic has had a heavy impact on the cosmetic and personal care sector. Spas and beauty salons were the most affected subsectors of the industry in 2020, with social distancing measures posing a challenge to service providers and their suppliers. Spas and beauty salons saw a drastic decrease in the number of clients due to lockdowns and health protocols implemented by the federal government. It is estimated that in 2020, 30 percent of established spas and hair salons had to close.

According to CANIPEC, the ongoing COVID-19 pandemic and accompanying lockdowns and business closures in Mexico unfavorably impacted the cosmetic and fragances market in 2020. Considered a non-essential activity, beauty-related businesses were ordered to close operations until specific reductions in pandemic cases were achieved. The effects of these measures were felt by the consumers who put off purchases of cosmetics and fragrances. In turn, the personal care subsector, specifically soaps, hand sanitizers, and related antibacterials, experienced high demand in 2020—a trend that is expected to continue during 2021. Self-care products will also be in demand as the population focuses on wellbeing and looks for alternative ways to maintain their appearance with fewer salon visits.

Finally, the COVID-19 pandemic is spurring development of ecommerce in Mexico for both cosmetics and personal care products. This will become an essential sales channel, and several distributors and retailers quickly launched or expanded their online presence due to social distancing measures. It is important to note that U.S. exporters cannot sell directly to the Mexican consumer through this channel in compliance with standards, customs, and labeling regulations. Although many products can be imported into Mexico without the use of a customs broker for shipments under USD 1,000, personal care products belong to a category called difficult identification. All products that are in liquid, cream, gel, or powder form cannot enter freely. Thus, for online sales, the U.S. exporter will still need a Mexican importer of record to assist with the import process and labeling compliance. Please contact the U.S. Commercial Service if you need assistance in finding such a parter in Mexico.

Resources

  • Cosmetology Chemist Association (SQM)
  • Federal Commission for the Prevention of Sanitary Risks (COFEPRIS)
  • Mexican Institute of Statistics and Geography (INEGI)
  • Mexican National Chamber of the Cosmetics Industry (CANIPEC)
  • Association for the Cannabis Industry in Mexico (ANICANN)
  • Mexican Standardization and Certification Laboratory (NYCE)

Events

EBS, Expo Beauty Show, Mexico City
The Mexican Healthy Products Summit, Puerto Vallarta, Jalisco
EBIO, Expo Belleza Internacional de Occidente, Guadalajara, Jalisco
Contacts

For more information on the cosmetics sector in Mexico, please contact:

Yazmín Rojas

Commercial Specialist

U.S. Commercial Service—Monterrey

Tel.: +52 (81) 8047-3290

Yazmin.Rojas@trade.gov