Sephora Mexico’s growth is expected to exceed 40% in 2022, with significant contributions from e-commerce channels

Sephora Mexico predicts over 40% growth in 2022, largely due to e-commerce

Darío Aguilar, CEO of Sephora Mexico, stated in an interview that the company’s sales in Mexico increased by 40% in 2022, with a comparable sales growth of 45%, and opened 4 new stores in northern Mexico. Compared to 2019 before the pandemic, the luxury cosmetics retailer, which belongs to the LVMH group, also grew by 24%, and its e-commerce channels grew by 112%.

After the outbreak of the pandemic, during the period when e-commerce market developed rapidly, Sephora’s online department made timely adjustments and quickly established its leading position. At the peak time, online sales accounted for 40%-50% of Sephora’s total sales in Mexico. During the period when pandemic control measures were relaxed, Sephora Mexico has been adjusting and balancing its digital and physical channels, with online sales accounting for about 20% of the total business and expected to reach 30% in 2022. Compared to Sephora’s online sales ratio of over 40% in the world’s largest market, the United States, there is still room for expansion in its online channels in Mexico.

Sephora has more than 40 stores in Mexico, distributed in regions such as Mexico City, Merida, Cancun, Guadalajara, Queretaro, and Monterrey. It opened its first branch in Tijuana, with a population of 2.5 million, in December 2022. Although the security issues in this border city between the United States and Mexico have been criticized, the huge consumption capacity of the market has made its sales rank second or third in Mexico in just a few months. The top-selling store is the Antara store in Mexico City.

This has also made LVMH aware that there are still huge opportunities in the Mexican market, and many cities with populations exceeding 1 million are still unoccupied by Sephora. In early 2023, Sephora announced that it would expand to more Mexican cities in the next three years. Five cities have been confirmed and are under preparation.

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To follow the global trend, Sephora Mexico is actively developing omnichannel sales. Starting from the change of its distribution center in 2021, to the establishment of a distribution center operated by its strategic partner DHL in the country, and the launch of its application program in 2022, its omnichannel model is expected to be available as early as the second half of 2023.

Sephora has entered the Mexican market for 11 years, and its pricing and profit margins in this market rank it in the top three to four globally, leading in the world. Currently, Sephora’s highest sales market is the United States, followed by France, China, and the Middle East market.

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