Stagi Alves, Adriana Sorgeloose, Tomas

1. A Brazilian cosmetic company in the French market BEST IN FRANCE CASE STUDY Stagi Alves, Adriana Sorgeloose, Tomas 8 of January 2004 Group b

2. Company overview • Natura was established in 1969 as a small chemical laboratory in Brazil and over the years has become a leading manufacturer of cosmetics and toiletries and a major player in the Brazilian cosmetics market • The company has a 16% market share in the Brazilian cosmetics market, with annual revenue around € 400 million • Natura manufactures and sells its products (about 500) through its strong sales consultants (307 thousands) throughout Brazil, reaching almost the entire Brazilian territory • Number of employees: 3.139

3. Company overview • In Brazil, Natura is well known for its commitment to corporate social responsibility, having invested in a number of environmentally and socially responsible projects • Natura is also known for its strong commitment to improving/preserving the environment. Pioneered the use of ingredients extracted or produced from local Brazilian flora (oils, seeds, resins, and pulps) in an environmentally sustainable manner • In addition, the company is recognized as the 7th best company to work for in Brazil in 2003 by Exame, Brazil's leading business magazine • Natura is the company that most invest in R&D in the cosmetic industry in South America

4. Products or services provided • Mother & Baby • Child • Skin treatment • Make-up • Perfumery • Hair • Health (line of nutritional supplements and a line of Natura teas) • Natura Ekos (line of hygiene and beauty products that values, in an economic and environmentally sustainable way, the active ingredients extracted from the Brazilian flora) • Crer para Ver (The Eyes Believe - which promotes the participation and the creativity of designers, artists and suppliers to produce packaging and cards, t-shirts and other products, that are voluntarily sold by Natura Consultants. The funds raised are sent to educational projects in 20 states of Brazil)

5. Company positioning • Natura’s position is well described by its Statement of Values: “Help each person to feel well with him/herself and with the world, creating conditions for the well being happens” • Natura’s products are developed with the commitment to integrate all levels of the human being - physical, emotional, intellectual and spiritual • Through its social actions, Nature has developed a reputation domestically and internationally as one of the most socially responsible companies in Brazil - becoming a reference on the subject

6. Natura's beliefs and world vision generate concepts that inspire the creation of its products. Following that, Natura has created the Natura Ekos project (ecological bath and body line). • The program is designed to guarantee that the products coming from the Brazilian flora are extracted correctly from the environment, and that social and economic development is provided to the local community • Natura Ekos line states as one of the main projects to valorize Brazilian flora and its concept leads the international positioning of Natura Natura Ekos line

7. International activities • Natura is already present in Argentina, Chile, Peru and Bolivia • Using the Natura Ekos Line concept, Natura seeks to spread its international operation to the European market • The starting point for the European spread is France, the worldwide leading country in cosmetic and beauty • The French project has not being finalized yet. Its start up is planned to June 2004

8. Operating in the French market • France was chosen to be the starting point for the European spread due to its worldwide influence in the cosmetic and beauty world • Natura perceives that the success in the French market will lead the success in other European countries, also increasing its reputation in the markets Natura is already operating • The French operation will differ from the Brazilian one by the setting of a physical store in a strategic place in Paris. There will be no sales done by consultants

9. Constraints faced in the French market • The first constraint foresaw before coming to France was how to set a local team experienced in the cosmetic sector, which would take the risk to be part of such a risky project • The cultural difference was a fact that was not took into consideration, but which is having a great impact in the way the start up is being conducted, delaying some processes and set dates for the star up • Such cultural difference had a minimum impact when opening operations in Argentina, Chile, Peru and Bolivia that have more similar habits with Brazil

10. Adaptation to the French market • The lack of knowledge of the French market was another constraint faced by Natura and was minimized by hiring a French person to run the operation • The main adaptation, as already said, is the creation of a physical store, a different approach from the Brazilian operation. Natura believes that the French market does not fit sales via consultants • Regarding the workforce, they were not recruited yet, but there are serious concerns regarding labor’s right and the social security benefits they will have to face

11. Essential Advice • Have people with experience in the French market • Know in advance the impact of the social benefits in the company • Develop a strong business plan, aligned with the French culture and French market

12. Additional information • We thank Fernando del Mar International markets manager # tel: 55 11 4446 2662 Email: fermandodelmar@natura.com.br • Bibliography Company Web site – www.natura.com.br International Finance Corporation website (wbln0018.worldbank.org) Global reporting initiative website (www.globalreporting.org)