InterCHARM.kiev.ua - about perfumery and cosmetics market from professionals

Direct selling, outdoor markets and supermarkets/hypermarkets as well as droggery chains were the most successful distribution channels in 2009. The success of direct selling and outdoor markets is based on lower prices compared to the other channels. Direct selling distributes budget cosmetics and medium-priced products which became more attractive to consumers as real income dropped. Outdoor markets became popular due to its high share of budget brands and lower mark-ups compared to health and beauty retailers. Success of supermarkets/hypermarkets and droggery chains was based on promotional activity and rising popularity of large-format stores in Ukraine where consumers are able to purchase everything from one outlet.

Annual event for beauty-lovers
Beauty industry in Ukraine is the market of great possibilities to all its participants: investors, producers, distributors, owners of beauty salons, specialists and consumers. It had been rapidly developing until global financial crisis hit all spheres of business activities. Nevertheless last year the Ukrainian beauty market started to stabilize. Following the market the International exhibition of perfumery and cosmetics InterCHARM-Ukraine also strengthened its position.

On the 14th-16th of October 2010 at the exhibition centre KyivExpoPlaza in Kyiv there will be held an annual event for beauty industry specialists - Estet Beauty Expo 2010. This year Estet Beauty Expo celebrates its tenth anniversary. Besides it has changed its name for Congress of Beauty Industry Estet Beauty Expo and it still remains the main national project of Ukrainian beauty industry that has been successfully combining professional training events and specialized exhibitions for the period of 10 years.

Overall economic and political situation in the country in 2009 in any event exerted influence upon the condition of any separate beauty salon.  Financial crisis, considerable fluctuation in hryvna exchange, inflation and solvency decrease led to decline of clients number and as a result to reduction of salons profitability. Consequently the owners of beauty salons had nothing to do but to cut costs if they wanted to keep afloat. 

According to the experts’ appraisal, for the period of 2005-2008 Ukrainian market of professional cosmetics had shown annual increase 30-40% in money terms at the expense of growth of quantity of orders at beauty salons and opening of new establishments. The totals of 2008 showed that the market of professional cosmetics made up about 370 million dollars (according to the rating of the market players). Another 150 million dollars were the result of sales of salon cosmetics to masters with private practice. Thus the market volume made up approximately 520 million dollars.

There is no per se organic cosmetics market in Ukraine. Correspondingly there is no such boom regarding organic cosmetics as it is in the whole world now. At the same time there are a lot of brands in Ukraine, which could be labelled as organic ones: GUAM, Annemarie Borlind, Santaverde, Weleda, Avalon Organics, Russian organic cosmetics Natura Siberica and others. But the volume of organic cosmetics sales according to the market players’ evaluation totaled 10 million EUR in 2008 that made up only 0,6% of the perfumery and cosmetics market of Ukraine.

According to the data of the research company Euromonitor International, the volume of perfumery and cosmetics market in 2009 showed 9% growth in money terms (hryvna) and amounted to 15 508 million hryvnas. The highest increase was observed in the category «skin care products», its growth in money terms accounted for 23%. The second category, which showed active dynamics, was hair care products – 18% increase in money terms. Not so active was the category of perfumery with 17% growth. The least active was baby cosmetics – its growth was only 2 % in money terms.

On breaking of financial crisis panic and confusion could be observed on the cosmeceutics market of Ukraine as well as on many other markets. It was especially noticeable in comparison with several years 2007 and 2008, which were rather successful for the market of pharmacy cosmetics, when the share of the products of that category grew at a rapid pace – by more than 20% in quantity terms and by more than 50% in money terms per year.