Paddling for profits: despite hard times, Avon's huge, mostly female workforce is on the move in Latin America.

As the Argentine economy collapsed in late 2001 and unemployment spiraled to over 21%,Jorge Martinez immediately hired 21,000 women to sell beauty products. Even with an attrition rate that borders on 60%, Martinez, the general manager of Avon Argentina, can expect some 8,000 small-but steady revenue streams during 2003.

"Our anti-aging cream has been a tremendous success," says Martinez, Even in a crisis, he says. "women are not going to abandon the products that help make them look better and feel happier."

That stressed Argentine women might want to buy anti-aging creams is hardly a surprise, but making the sale nevertheless requires a superhuman effort, or in Avon's case, a superwoman effort. Avon hires only non-salaried representatives, who sell products to family and friends. While multi-nationals ranging from French utility Suez to U.S. tractor maker John Deere took huge losses on their Argentine investments, Avon Products, the New York cosmetics company, which posts US$6 billion a year in revenues, continues to add saleswomen and open new stores in Buenos Aires.

An estimated 1.7 million Avon women in the region scale the trendy towers of Rio and paddle up the Amazon to sell perfume to gold miners. In 2002, sales to the region fell 10% in dollar terms to $1.7 billion while operating profits slid by 11% to $378 million. Although facing dollar losses on currency weakness, Avon nevertheless looks to Latin America for 28% of global sales and 33% of profits.

"What the typical Avon rep does is sell to family, friends and co-workers," says William Steele, cosmetics analyst at Bane of America Securities. "In the U.S., the typical person would be lucky to have six people in their inner circle. In Latin America the norm could be thirty."

Argentine consumers prefer French cosmetics but devaluation of the peso makes them relatively more expensive, says Josette Fiore, an analyst with the U.S. Commercial Service in Buenos Aires. Priced lower, Avon instead faces heated battles with multinationals like Procter & Gamble as well as regional cosmetics companies like Brazil's Natura.

Avon fights back with a flexible price structure and non-traditional products. A lipstick, for example, can range from $2.99 in some countries to 10 times as much in others. The company also tailors products to local markets. In Argentina, the Creativa line provides out-of-work families with arts-and-crafts kits; in Brazil, Avon sells millions of shoes each year; and a classified ad in the Guautanamo Bay Gazette. The official newspaper of the U.S. military base in Cuba, announced that "Avon Products are finally available in GTMO. Call Debbie."

The economic slowdown forced the company to reorient its product line, cut back on bonuses and to innovate. "We are trying to minimize the dollar impact in our production, so we came up with a plan to reduce imports," says Amilcar Melendez, senior vice president of Avon Latin America. "Using our labs in each countries, we are looking for local ingredients to replace imported products."

Brand power. Avon's biggest market in Latin America is Brazil, where a fierce battle rages between Avon and Natura. Despite the tough environment, Avon's sales in Latin America rose 21% in the first quarter of 2003. In dollar terms, sales fell 8% in the period while the total number of Avon representatives in the region jumped 13%.

Even in the remote Amazonian mining town of Cripurizao, 1,500 kilometers away from anything like civilization, Avon saleswomen still make regular visits. Their target market: Male gold miners who regularly purchase perfumes and beauty supplies.

"Miners are very vain," says Fabiano Maciel, who organized a film crew to follow a group of Avon saleswomen as they paddled for hours into the Amazon, for a 52-minute documentary, Vanity. "They had to battle malaria, dangerous mining camps, thieves, dogs, every problem you can imagine," says Maciel.

In the camps, there are only three roles for women, Maciel says: prostitute, cook or Avon lady. Looking tot sales where they can, the intrepid Avon canoers are changing ideas as well as women's--and some men's--looks.