COSMETICS AND TOILETRIES IN ROMANIA (MAY 2004)
1. INTRODUCTION
This report analyses the market for Cosmetics and Toiletries in Romania. For the purposes
of the study, the market has been divided into 11 sectors:
 Baby care
 Bath and shower products
 Deodorants
 Hair care
 Colour cosmetics
 Men's grooming products
 Oral hygiene
 Fragrance
 Skin care
 Depilatories
 Sun care
2. EXECUTIVE SUMMARY
Continuous decline consequence of the low purchasing power
Although the overall Cosmetics and Toiletries reached over Leu 12,000 billion in 2003, it
remained steady in 2003 in constant value terms and declined by more than 25% over the
review period. The trend came as a consequence of the low purchasing power and the
increasing expenditure on housing and household fuels. The strong decrease of interest
rates on bank loans also fuelled sales on credit of durable goods which led in turn to a
sales reduction of consumer goods, including cosmetics and toiletries. As a result, demand
remained concentrated on basic products and less focused on more sophisticated products.
Hair care leads a market opened to more expensive products, although basic products
retain main share
Basic sectors, such as hair care, bath & shower and oral hygiene, continued to account for
about 43% of overall sales of cosmetics and toiletries over the review period in 2003,
although they registered high decline rates. Hair care led the market over the review
period due to its perceived benefits for fighting dandruff, improving hair shape and offering
colour protection. Bath & shower, dominated by bar soap, lost its second leading position
against more sophisticated and expensive fragrances, skin care and colour cosmetics,
considered by most of Romanians as an important tool for self-individualisation.
Convenience and changes in lifestyle lead to the best dynamics for depilatories
Depilatories was the most dynamic sector over the review period, as a consequence of
changes in life style and growing demand for convenience, especially among young
professionals in urban areas, who were prepared to pay higher prices for quality products.
However, depilatories remained the smallest sector within cosmetics and toiletries due to
limited usage, concentrated in large urban areas, with reduced awareness within women in
small urban and rural areas.
Avon leads the market due to power of direct sales in all areas
Direct sales of cosmetics & toiletries became a very attractive option for the Romanian
consumer. Being extremely broad in price terms, the mass market was perceived as
providing the best price-to-quality ratio and direct sales satisfied this need. Through direct
sales, the same products were now available both in large cities and in small urban and
rural areas, leading to the impressive growth of direct sales, with Avon accounting in 2003
for the highest share. However, the largest share of cosmetics and toiletries was sold
through the traditional department stores and general stores, commonly found in rural
areas.
Supremacy of multinationals, consequence of investment in local industry, new launches
and heavy advertising
The Romanian Cosmetics and Toiletries market was concentrated in the hands of a few
large multinationals, with the top ten including only one domestic firm, Farmec, ranking
ninth in 2003. The top five multinationals accounted together for about 52% of market
value in 2003. With demand remaining price elastic, product availability and advertising
were strong tools in raising brand awareness and share gain over the review period. New
launches and brand extensions were also employed by multinationals in order to maintain
their shares. Avon was the market leader, focusing also on advertising and increased
presence with stands in department stores, overtaking Colgate-Palmolive in 2002, after
years of supremacy due to its leading positions in the largest basic sectors of the market:
bath and shower, oral hygiene and hair care. It was the first foreign investor in the
domestic C & T industry and developed a strong distribution network. Colgate-Palmolive's
Colgate was the leading brand of the market in the same year.
Smaller and more sophisticated sectors will also witness growth
Euromonitor forecasts the total market for cosmetics & toiletries to grow by 9.7% in
constant value terms over the forecast period due to the stronger decline of the basic
sectors and growth of more sophisticated ones, reflecting the increased concern for selfindividualisation and decline of cheaper, basic products. It is predicted that the cosmetics
& toiletries market will be worth over Leu 13 billion. The trend towards sophistication and
need of individualisation will be noticed in the future, with growth rates to be registered by
colour cosmetics, fragrances, sun care and men's grooming, although the low purchasing
power will render many of the premium products unaffordable to large categories of the
population.
3. COSMETICS AND TOILETRIES
3.1 Market Performance
2003 headlines
 Individualisation – major trend – depilatories benefit
 Strong competition leads to continuous market decline
 Important share loss for basic sectors – hair care, bath & shower and oral hygiene –
consequence of the perceived growing trend towards sophistication
Individualisation – major trend
Demand for convenience led to impressive growth of the smallest subsector, depilatories,
but fragrances and colour cosmetics were the most dynamic in 2003, consequence of the
need for individualisation.
Year 2003 witnessed the highest growth for fragrances (35.6% in constant value terms),
followed closely by colour cosmetics and also by skin care, sun care and men's grooming,
which proves the increasing concern of the Romanian consumers for their own image.
Fashion became increasingly important to consumers and the intense activity of direct
sales companies such as Avon and Oriflame led to an important switch towards more
sophisticated products.
Depilatories registered the highest growth rate over the review period within cosmetics
and toiletries market, outperforming by far the other sectors that recorded growth over the
same period. This excellent performance can be explained by the strong penetration
amongst young women in large urban areas, more focused on convenience than women in
small urban areas and rural areas. Young professionals were among the heaviest users of
depilatories on a regular base while the products were less used in rural areas, where
awareness remained very low due to lack of advertising.
The launch of new brands and brand extensions positively affected the impressive growth
of depilatories, albeit from a small base. Changes in lifestyle and demand for quality
products, combined with time shortage for working women in large urban areas led also to
the subsector's excellent performance. Significant price increases at beauty salons, and
also a perception of them as time wasting, influenced the growth of depilatories, which
were perceived as a cheaper and faster alternative to salons.
However, depilatories declined in 2003 due to the increasing presence of cheaper, locally
manufactured products, launched by domestic producers as a consequence of the strong
growth. They continued to account for the smallest share within cosmetics and toiletries.
Strong competition leads to continuous market decline
The overall market in 2003 was worth Leu 12,044.4 billion, down by 26% over the review
period. The decline stopped in 2003, when the total market remained steady on 2002 in
constant value terms, due to the poor performance of the basic large sectors: bath and
shower products, hair care, oral hygiene and deodorants.
Even the year-on-year real growth was posted at a continuously decreasing rate for all
sectors except depilatories, fragrances, skin care and colour cosmetics, which performed
well. In 2003 the more sophisticated sectors such as colour cosmetics, fragrances, skin
care, sun care and men's grooming registered positive growth rates, as a consequence of
more concern for self- image and individualisation. However, despite this growth, the
declining trend was dictated by the basic sectors, where the strong competition led to
significant price decline for shampoo, bar soap and tooth paste, which accounted for the
bulk of sales in each basic sector: hair care, bath and shower and oral hygiene.
Domestic manufacturers such as Farmec SA, Gerovital Cosmetics, Elmi Prodfarm,
Gerocossen and other smaller regional producers also launched over the review period
some new, better quality, lower priced brands, covering practically all the market, with
improved product lines. The high price elasticity of demand determined a higher increase
in sales of cheaper basic products compared to more expensive ones but also an increased
consideration of more sophisticated, expensive products, which led to steady constant
value sales performance in 2003 on 2002 compared to the overall decline over the review
period. The presence of these locally manufactured products, of cheaper branded fakes
combined with the dramatic decrease of purchasing power led to the drop in sales over the
review period. At the same time, the launch of new improved versions of the existing local
brands Aslavital, Gerovital Plant, Gerovital H3, Elmiplant, Gerocossen led to a halt in
decline in 2003. The presence of direct sales companies Oriflame and Avon also led to
significant sales growth of fragrances, colour cosmetics, skin care and sun care which
gained significant shares in 2003 and changed the sector ranking in the same year due to
the growing trend towards sophistication that can be perceived in the latter years of the
review period.
With 18.3% share in 2003, hair care was the largest cosmetics and toiletries sector over
the review period and it maintained its position due to strong advertising campaigns for
shampoo and other hair care products and the increased concern about dandruff. This
activity led to a reduction of consumption of bar soap for hair wash also in small urban and
rural areas which in turn conducted to a significant share loss of bath and shower products
over the review period. Despite this share loss, bath and shower continued to rank fifth in
2003 among the main players due to its strong presence and heavy usage of bar soap, still
perceived as a universal washing product.
Significant share loss for basic sectors – hair care, bath & shower and oral hygiene –
consequence of the perceived growing trend towards sophistication
The three largest sectors, bath & shower, oral hygiene and hair care together accounted
for an estimated 46.7% of total C&T sales in Romania in 2003. The market remained
relatively unsophisticated as regards to product availability or awareness, so demand
remained heavily concentrated on basic products such as soap, toothpaste and shampoo.
Low purchasing power was also a main determinant for this consumer behaviour, where
the presence of more sophisticated products continued to be considered as superfluous by
most of the low-income consumers.
Perceived as more sophisticated by lower-income consumers, fragrances, colour cosmetics,
men's grooming products, skin care and sun care registered positive growth rates in 2003
and they gained significant shares, enjoying stronger awareness and challenging the basic
sectors, where value sales were affected by strong competition and price decline. The
increased presence of direct sales companies, as Oriflame and Avon, also led to significant
growth as the same products attained consumers in both large cities but also in smaller
urban and rural areas. During the latter years of the review period, consumers also
became more and more concerned with the quality and the benefits of the products in
these sectors, as longer lasting effect, skin protection and a way towards selfindividualisation, for which they were prepared to pay more.
The existence of the Law of Cosmetics since October 2000, introducing quality certificates
and the need for product health approvals, weeded out most of the low quality, cheap
products that were widespread throughout the 1990s. The law stipulates that cosmetics
can be traded in Romania provided the manufacturer or importer is legally registered in
Romania and they must notify the Ministry of Health of their intention to sell cosmetic &
toiletries products. This helped increase value sales since then, as spending on higher
priced products increased.
Table 1 Retail Sales of Cosmetics and Toiletries by Sector: Value 1998-2003
Leu billion
Baby care
Bath and shower
products
Deodorants
Hair care
Colour cosmetics
Men's grooming products
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
Premium cosmetics
Cosmetics and toiletries
1998
1999
2000
2001
47.3
56.6
95.2
126.1
778.0 1,090.0 1,458.6 1,562.0
2002
144.0
1,635.5
2003
159.8
1,661.1
422.5
526.3
686.9
836.6
936.3 1,034.0
1,033.3 1,235.5 1,435.4 1,800.2 1,911.7 2,072.1
403.0
579.5
794.4 1,004.0 1,282.8 1,681.4
162.8
228.1
301.3
386.4
478.5
571.4
550.4
748.7 1,060.1 1,371.0 1,541.0 1,609.3
304.5
415.9
609.9
928.1 1,354.5 1,837.0
334.6
466.2
612.6
846.0 1,140.6 1,451.6
11.5
26.8
42.3
61.9
77.9
88.6
44.8
53.5
78.0
105.9
131.4
158.9
105.9
578.4
827.6
4,001.5 5,291.4 7,005.6 8,828.7 10,398.7 12,044.4
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Note: Sum of sectors does not equal total cosmetics and toiletries because of double
counting (for example men's skin care is included in men's grooming products and skin
care)
Table 2 Retail Sales of Cosmetics and Toiletries by Sector: % Value Growth 19982003
% current value growth
2002/03
Baby care
Bath and shower products
Deodorants
Hair care
Colour cosmetics
Men's grooming products
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
Premium cosmetics
Cosmetics and toiletries
10.9
1.6
10.4
8.4
31.1
19.4
4.4
35.6
27.3
13.7
20.9
43.1
15.8
1998-03
CAGR
27.6
16.4
19.6
14.9
33.1
28.5
23.9
43.3
34.1
50.4
28.8
50.9
24.7
1998/03
TOTAL
237.6
113.5
144.8
100.5
317.2
251.0
192.4
503.3
333.8
669.9
254.6
681.6
201.0
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Note: Sum of sectors does not equal total cosmetics and toiletries because of double
counting (for example men's skin care is included in men's grooming products and skin
care)
3.2 Competitive Environment
Farmec SA
Farmec SA was the largest Romanian cosmetics producer, accounting for sales of US$13.3
million in 2003, up on 2002, despite a slight drop of 0.1 percentage point in total market
share. The ownership consists of the Association of Employees and other local investors.
Its core activity was concentrated in the cosmetics and toiletries industry and it
manufactured an impressive number of brands, from which the most well known were
Gerovital, Aslavital, Ecovital, Farmec, Doina, Obsesie, Athos and Dermofarm. It also
manufactured home cleaning products, with Triumf and Nufar as the main brands.
The company launched annually around 50 new products which generally meant new
improved versions of the existing brands. Farmec also invested in the production of
ecological brands (an investment of US$3 million), like ecological deodorants, the second
investment of this type in Central and Eastern Europe.
In respect to skin care, Farmec owned one third of volume sales, having registered sales
higher than its stronger competitors L'Oréal, Unilever and Beiersdorf. Farmec was very well
placed in the deodorant sector too. These performances were achieved by modernisation
manufacturing facilities and by promotional campaigns. According to Farmec executives,
Farmec started focusing much more on product promotion and advertising, the sums spent
on these in 2003 being 40% higher than in 2002, amounting to about US$800,000.
The newest Farmec brand was Aslavital, a range of products based on clay extracts, a
novelty in the Romanian cosmetics production. According to the same executives, Aslavital
and Gerovital sales represent 80% of the company sales.
Around 10% of the company's sales came from exports, that proved to be very profitable,
the price of a Gerovital cream in Japan being US$90. Exports were made to Japan, Latin
America, the Arabian countries and Europe – Spain, Finland, Greece and Germany.
Farmec had at the time of writing 713 employees and 12 territorial representatives. Its
distribution was made through its regional centres but also through cash & carry,
specialists and smaller outlets, in both urban and rural areas.
Gerovital Cosmetics SA
Gerovital, invented by the Romanian Ana Aslan and promoted across the world since the
70's, was expected to go public on RASDAQ, the secondary Romanian stock exchange
market, in October 2003 together with one of the GBO's, namely Gerovital Cosmetics SA.
The listing of Gerovital Cosmetics SA would be among the year's highlights, as several
hundred companies were de-listed from the capital market in 2003.
Gerovital Cosmetics SA is one of the oldest domestic manufacturers of cosmetics,
previously named Miraj SA. Its shareholders are 37%- Association of Employees; 9%Privatisation Authority (APAPS); the rest of 54%- some 2.600 individual shareholders,
came from the Mass Privatisation Programme. The Association of Employees purchased its
share in 1996, with its obligations derived from the privatisation contract set to end in
2006. According to several brokers, going public may be the first significant step towards a
change of ownership.
The Gerovital brand was disputed under several law-suits and was owned by three
companies:
 Sicomed Bucharest: held the right to manufacture drugs under the brand name;
 Gerovital Cosmetics: used the brand name for cosmetics;
 Farmec SA: used the brand name for cosmetics.
Gerovital was also the object of a governmental project, aiming to capitalise on the brand
name in order to attract foreign tourists.
Gerovital Cosmetics lost share over the review period against multinationals, chiefly
because of its reduced advertising effort, consequence of diminished advertising budgets.
The company produced skin care products that incorporated the active principles
discovered by Ana Aslan in the 40's and also hair care and colour cosmetics.
The company's financial results were not very impressive but the brand ownership rights
appealed to investors. According to the Financial Statements published by the Ministry of
Finance, the company posted in 2002 total revenues of Leu 63.5 billion and net profit of
Leu 363 million.
Elmi Prodfarm SRL
The Elmi Prodfarm Company started its activity in Romania in 1992, being registered under
the Elmiplant brand in 1995. It is a family owned company, managed by the Cremenescu
family. Its activity relied only on manufacturing of cosmetics & toiletries, especially skin
care, sun care, hair care and baby care.
Researches showed that Elmiplant made about 80% of the cosmetics sales in Romania, its
main competitors being Farmec, Unilever, L'Oréal and Beiersdorf. Its products were also
exported to foreign markets (Canada, Lebanon, South Africa, Israel, Morocco, Australia,
and USA).
In the first eight months of 2003, the company registered sales of Leu 50 billion (€1.3
million), 14% higher than the sales registered in the same period of the previous year.
10% of these sales were made from the distribution of two new tanning products – the
"IFP 30" sunscreen spray lotion and the "IFP 12" sunscreen spray oil – sales that
represented more than €250,000 million in 2003, 60% higher on 2002, according to the
company executives.
For the end of 2003 the company estimates a 30% sales raise compared to 2002, when it
registered sales of €1.2 million. Additionally, Elmi Prodfarm has invested €1.0 million in the
construction of a cosmetics facility and another €1.0 million in new production technology.
Gerocossen SRL
Gerocossen SRL was established through the common initiative of three native investors:
Stanca Cismaru, general manager, Elvira Sas – technical manager and Radu Bogadan –
commercial manager. The company name was designed to symbolise the fight against
physical ageing and all the products had natural ingredients (plant extracts, therapeutic
muds etc), according to its owners.
Sales grew between 2002 and 2003 and are expected to growth further in the near future.
This is due to the launch of new products and the extension of its distribution network in
Romania – specialists, general stores, whole sale warehouses, drug stores and pharmacies.
At the time of writing, 10% of the production was exported, mainly to the USA and the
Czech Republic. For the future, the company's management planed to achieve a 50%-50%
share between exports and domestic sales.
The company first launched on the market only one product, the Gerocossen shampoo and
ended up having interests in other sectors: Gerocossen (hair care-shampoo and
colourants), Gerocossen Clasic and Pell-Amar (skin care-body lotions, toners, hydrating
gels, camomile creams, night and day hydrating creams, masks and purifying gels.
Market shares
Cosmetics and toiletries is highly competitive and concentrated among a few
manufacturers in some sectors such as baby care, hair care, men's grooming, colour
cosmetics and oral hygiene, while the remainder were more fragmented. The top five
manufacturers present on the Romanian market were all multinationals. Avon, ColgatePalmolive, Procter & Gamble, Oriflame, and L'Oréal accounted together for an impressive
51.4% value share in 2003, based on strong positions in the fastest growing sectors.
Heavy advertising, extensive distribution and strong availability in all retail channels led to
that market position. Other multinationals, such as Unilever, Beiersdorf, Henkel and Coty
also accounted for leading positions while domestic Farmec was the single local
manufacturer present in the top ten ranking in 2003.
Direct sales companies took also significant shares, leading the more sophisticated colour
cosmetics, fragrances and skin care sectors, where competition from multinationals was
more reduced at the beginning of the review period in comparison to the basic sectors.
Consumer education, sales on short-term credit, professional advice coming from welltrained salespersons led to this excellent leading position. In these sectors, direst sales
companies had to face competition from L'Oréal, Coty and domestic Farmec and Gerovital
and to a lesser extent by premium brands from strong international producers. Avon
succeeded to overtake in 2002 Colgate-Palmolive and became the market leader,
accounting for 18.4% share in 2003. It strengthened its penetration in both traditional
urban areas and also in rural and small urban areas after similar approach, meaning price,
products, promotion, distribution, short term credit.
Colgate-Palmolive was the leading manufacturer until 2002, when it was overtaken by
Avon. Manufacturing locally, after the acquisition of Stela Bucharest and Norvea Brasov,
Colgate-Palmolive defended its leading position against other multinationals due to its
strong position in the oral hygiene sector, which it dominated completely. The company
was also the leading manufacturer in bath & shower products and was prominent in
deodorants, hair care, men's grooming and skin care. In the basic bar soap category, it
faced heavy competition by cheaper Turkish brands, with Evyap Sabun' Arko and Fax
being the most prominent. After closing its Stela manufacturing for soap, ColgatePalmolive's share diminished constantly due to price growth of its imported soap brands
but also to share loss in its main tooth paste where it faced heavy competition from
Procter & Gamble's Blend-a-Med.
Unilever led the rather fragmented deodorants sector in 2003 for the fifth year running. It
also had a strong presence in the other basic and main sectors of the market.
Procter & Gamble led the hair care sector and also achieved ranking positions in other
significant sectors of the market while Henkel had a strong presence in the basic sectors of
the market – bath & shower, hair care and oral hygiene. Beiersdorf also had a strong
presence in a number of sectors. The company ranked fourth in skin care and led the sun
care sector and focused mainly on marketing and sales strategies, investing in advertising
as an effective tool for products awareness and market penetration. Gillette was the leader
of the men's grooming and depilatories due to its traditional presence on the Romanian
market, strong availability and brand recognition.
The traditional domestic producers Farmec SA and Gerovital Cosmetics, formerly stateowned enterprises, made a significant investment in modern technologies, which allowed
them to compete with multinationals, mainly in the skin care and hair care sectors but also
in other market sectors. Together with new established companies, as Elmi Prodfarm and
Gerocossen, they registered significant share gain, consequence of the decreasing
purchasing power. Their share increased mainly in volume terms, even the value sales
remained relatively low, due to the increased quality at lower prices, new packaging,
health attributes and new perceived benefits. Farmec classified in 2003 within the top ten
manufacturers ranking.
Other smaller domestic manufacturers were mainly active in the large hair care sector but
more on a regional basis. Lower prices made their products affordable for low-income
categories of the population but their value share remained very low.
Table 3 Cosmetics and Toiletries Company Shares 2001-2003
% retail value rsp excl salon haircare
Company
Avon Cosmetics Romania SRL
Colgate-Palmolive Romania SRL
Procter & Gamble Marketing SRL
Oriflame Cosmetics Romania SRL
L'Oreal Romania SRL
Unilever Romania SA
Beiersdorf Romania SRL
Henkel Romania SRL
Farmec SA
Yves Rocher SA
Coty Cosmetics Romania SRL
Evyap Sabun Yag Gliserin Sanayii ve Ticaret
AS
Gillette Romania SRL
Gerovital Cosmetics SA
Wella Romania Eurocosmetica SRL
GlaxoSmithKline SRL
Johnson & Johnson Romania SRL
Astera Romania SRL
Bic (Romania) Marketing & Distribution SRL
Elmi Prodfarm SRL
Miralon Industries SRL
Ruby Rose Co
Christian Dior SA, Parfums
Chanel SA
Mirato Nuova SpA
Rochas SA, Parfums
Givenchy SA, Parfums
Manetti & Roberts & C SpA
Tamaris SA (Parfums Kenzo)
Body Shop Plc, The
Estée Lauder Romania SRL
Hugo Boss Parfums
2001
7.2
13.2
9.6
6.3
4.2
7.9
4.1
5.7
4.0
2.9
3.4
3.5
2002
11.7
12.1
10.0
6.5
5.0
6.3
4.6
5.4
3.9
3.2
3.3
2.6
2003
15.5
10.7
10.1
6.6
6.0
5.4
5.2
4.6
3.8
3.5
3.2
2.3
1.5
1.7
1.1
1.3
1.1
0.8
0.6
0.4
0.6
0.6
0.3
0.2
0.6
0.3
0.2
0.6
0.3
0.4
0.2
0.1
1.7
1.4
1.1
0.9
1.0
0.9
0.6
0.5
0.7
0.5
0.4
0.3
0.5
0.4
0.3
0.5
0.3
0.4
0.3
0.2
1.8
1.0
1.0
1.0
0.9
0.8
0.7
0.6
0.6
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.4
0.3
0.3
0.3
Cacharel & Cie, Parfums
Romsar Cosmetics SA
Alix Avien Cosmetics SRL
Gerocossen SRL
Pierre Fabre SA, Laboratoires
Elizabeth Arden Inc
Laura Biagiotti SpA
Londa Cosmetics SRL
RTC Cosmetics
Yves Saint Laurent Parfums
Loris Azzaro SA, Parfums
Hellenica SA
Jacomo SA
Xavier Laurent, Parfums
Sisma SpA
Coral Comex Srl
Sara Lee Corp
Mega Disposables SA
Salrom SA
Romira Cosmetics SRL
Block Drug Co Inc
Revlon Inc
Constance Carroll Romania SRL
Ferfelis Line SA
Mann & Schröder GmbH
Mil Mil SpA
Pfizer Inc
Others
Total
0.1
0.4
0.3
0.2
0.2
0.1
0.2
0.4
0.1
0.1
0.2
0.1
0.3
0.3
0.2
0.1
0.2
0.1
0.1
0.2
0.2
0.1
0.1
0.1
0.1
10.5
100.0
0.2
0.4
0.1
0.3
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.2
0.1
0.3
0.1
0.2
0.2
0.1
0.1
0.1
0.2
0.1
0.1
0.1
0.1
0.1
0.0
8.0
100.0
0.3
0.3
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.0
0.0
6.0
100.0
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
3.3 Retail Distribution
Retail distribution trends
Department stores continued to account for the largest share of value sales over the
review period followed by direct sales and outdoor markets. Department stores benefited
from the tradition of selling C & T products but also from increased presence in rural areas,
where they were mainly identified with small general stores, selling food, clothes,
beverages, tobacco, cleaning products, cosmetics & toiletries. Department stores lost
significant ground over the review period but remained the most significant distribution
channel in 2003 for hair care, men's grooming, depilatories and also held leading positions
for baby care, bath and shower, colour cosmetics, oral hygiene, fragrances, skin care and
sun care.
Direct sales, although relatively weak at the beginning of the review period, were the most
dynamic due to the strong development of the large multinationals Oriflame and Avon that
enhanced the channel's sales. Direct sales took the leadership of colour cosmetics,
fragrances, skin care and sun care due mainly to their perception of premium products at
mass prices. Their presence increased all over the country due to professional advice,
sampling and sales on credit. Direct sales of cosmetics & toiletries imported illegally from
neighbouring countries developed in the last two years of the review period due mainly to
low prices and the perception by the consumers of making excellent deals.
Outdoor markets ranked third due to the distribution of basic products. Outdoor markets
are the traditional channel for the distribution of illegal imports, counterfeit items and
other cheap, locally manufactured products. Significant for sales of bath & shower
products, deodorants, oral hygiene, they retained the supremacy for these basic sectors
due mainly to the low margins and their perception of carrying cheaper branded products,
although it was not always true. The convenience aspect of their sales portfolio more than
the perception of sales of quality at cheaper prices led to their significant share.
The pharmacy/drugstores channel declined in favour of direct sales, which accounted for
the highest dynamics over the review period. They were very significant for sales of more
sophisticated products such as baby care, skin care and sun care products.
Pharmacy/drugstores kept the supremacy for sales in the small baby care but also
significant shares in skin care and sun care due to the perception of the products as
belonging to the health care category. They generally carried products at the upper end of
the mass market or premium and tried to emphasise the products' healthcare attributes.
Specialist stores registered slight growth over the review period due mainly to their
downtown locations but also to a change of perception from an expensive channel to a
more affordable one, although they most benefited from excellent downtown locations.
They focused on both mass products but also on premium products and retained
significant shares for sales of colour cosmetics, fragrances, depilatories and men's
grooming products. Premium products kept a significant share but mass brands were also
successful, perceived as high quality, even at lower prices. This perception allowed
specialists to charge higher mark-ups for the products they carried.
Others, mainly represented by tobacconists, convenience stores and kiosks, based their
sales on good and friendly neighbourhood relationship and the perception of paying a fair
price but the share diminished due to sales of basic cheaper products and increasing
propensity for out-of-town, weekend shopping.
Table 4 Retail Sales of Cosmetics and Toiletries by Distribution Format: %
Analysis 1998/2003
% retail value rsp
1998
4.0
13.4
12.5
1.6
36.2
6.6
3.2
16.3
6.0
100.0
Supermarkets/hypermarkets
Independent food stores
Convenience stores
Pharmacies/drugstores
Discounters
Department stores
Specialists
Direct sales
Outdoor markets
Others
Total
2003
6.8
6.4
7.0
1.1
25.8
6.7
23.7
17.9
4.5
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 5 Retail Sales of Cosmetics and Toiletries by Sector and Distribution
Format: % Analysis 2003
% retail value rsp
Supermarkets/hypermarkets
Independent food stores
Convenience stores
Pharmacies/drugstores
Discounters
Department stores
Specialists
Direct sales
Outdoor markets
BC
14.0
5.0
34.4
24.0
4.0
1.6
10.0
BSP
8.0
9.0
6.0
1.0
25.0
8.0
9.0
27.0
D
8.0
6.0
4.0
2.0
28.0
9.0
5.9
31.1
HC
10.0
7.4
6.0
2.0
28.0
2.0
12.6
25.0
CC
4.0
3.0
3.0
1.0
22.0
14.0
48.0
4.0
MS
8.9
7.5
2.5
1.5
30.3
10.5
9.0
25.8
OH
9.0
12.0
7.0
1.0
28.0
4.0
4.0
32.0
F
5.0
4.0
2.0
1.0
28.0
8.0
43.0
5.0
SkC
2.0
4.0
20.5
19.0
3.0
45.0
3.0
DEP
8.0
2.0
3.0
1.0
35.0
12.0
4.0
24.0
S
2
14
27
2
20
32
Others
Total
7.0
7.0
6.0
7.0
1.0
4.0
3.0
4.0
3.5 11.0
3
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Key: BC = baby care; BSP = bath and shower products; D = deodorants; HC = hair care;
CC = colour cosmetics; MS = men's grooming products, OH = oral hygiene; F =
Fragrances; SkC = skin care; DEP = depilatories; SuC = sun care
Retailer activity
In what the retailing interest in Romania is concerned, there are some major aspects of
mentality that combined with the financial problems of the majority of the population
modelled the market in the post-revolutionary period (since 1990). The Romanian trend in
retailing was to buy small quantities in small amounts. More than 70% of the Romanian
people were interested in fulfilling strictly their most stringent needs. Market researches
demonstrated that, when shopping, 75.8% of the urban population chose to use the before
mentioned buying tactics in what food is concerned, and 76.1% of the same segment of
population did likewise with non-food goods. The rest of the customers bought in larger
amounts, but only due to their greater salaries, generally higher than Leu 6 million
(around $180) per month. This segment was more likely to buy from supermarkets and
hypermarkets than the others, who still preferred general stores and markets to do their
shopping, although they slowly started to orientate towards the big retailers. However
their expenditures remained low.
Since 1990, the process of privatisation encouraged a vast number of small and mediumsized retail operations, with the majority being single outlets. Small entrepreneurs focused
mostly on trade rather than production, and the distinction between retail and wholesale
was blurred.
Private firms were mainly active in services and trade, while new companies specialised in
consumer goods and usually started by importing. The typical privately owned company
was a limited liability company with few partners (usually one or two, or family
associations) and a very low level of capitalisation. The firms had limited access to
business financing and most made only slight attempts to modernise their equipment. This
structure resulted in a great number of outlets, most of them only simple kiosks or streettraders, which did not have the power or ability to survive. The number of outlets
registered in 1996 and 1997 represented in fact artificial amounts of retail businesses.
The modern retail system appeared in Romania in the early nineties – more specifically in
1991 when the first La Fourmi supermarket was opened in Bucharest, followed by four
Mega Image supermarkets in 1994. The first foreigner who entered the market was Metro
cash & carry chain in 1996. They were followed by the Billa and Gima supermarket chains
in 1999, Selgros in 2000 and Carrefour and XXL in 2001. In the 1996-2003 period the
main retail companies in Romania invested EURO 650 million and it is estimated that the
investments will reach EURO 1.25 billion by the end of 2005. Half of these investments
were made in Bucharest.
Between 2000 and 2004 there was a major battle between the major retailers that
penetrated the Romanian market mostly in the mid – nineties and had an accessional
evolution ever since and the small retail businesses, the so-called "boutiques" (small
outlets: general stores, kiosks, CTNs). This struggle for supremacy tends to be won by the
big retailers who only in 2001 started to increase their sales by 75% compared to 2000
and this came to be a general direction for the last years of the review period. Specialists
affirm that Romanians have finally started to shop in a western manner, with the number
of kiosks expected to decrease in the following years and the clients of the whole sale
centres will migrate towards the specialised shops. This explains the large amount of
investments made in the past few years by the big foreign retail companies and their
extremely optimist predictions for the forecast period.
A verified fact is that the major retailers (supermarkets, hypermarkets and cash & carry)
won since 2000 a 15% share of the retail market in Romania, a market that is estimated
at $5-6 billion annually. That means that one in every seven Leu was spent in one of these
stores, where six or seven years previously they were extremely rare. That data was not
volunteered by the companies; most of the investors did not want to offer information
about the market because they considered that as a favour to the competition. However,
at the end of every year, each company has to deliver a balance sheet to the Ministry of
Finance. According to these balance sheets the main retailers of the country (Metro,
Selgros, Carrefour, Mega Image, La Fourmi, XXL, Profi, Billa, Artima, Universal,
Intermarche, Praktiker and Bricostore) made in 2002 sales of more than $1 billion. In
2001, when Carrefour opened its first hypermarket and five of the chains above hadn't
started their activities, sales were of about $650 million. Forecasts are that by the end of
2003 the sales will have reached the peak of $1.5 billion. This encouraged other foreign
investors to enter the Romanian market. Taking this into consideration, it is expected that
the extraordinary growth of sales will fasten, although analysts were sceptical about this.
Modern retail developments were concentrated in and around Bucharest, where the
consumers had the highest income per capita. The Metro hypermarket chain developed
first near the international airport of Bucharest in 1996. By the end of 2000, Metro had two
more centres in Bucharest (inside the town) and one in each of four other big towns.
Praktiker opened near Metro, at the Western entry in Bucharest (coming from Pitesti
motorway), at the beginning of 2002. Selgros, Metro's only competitor on the cash & carry
sector of the market, opened its first store in 2001 just outside Bucharest. In June 2001
the first Carrefour shopping centre was opened on the fringe of Bucharest, and in March
2002 Bricostore opened at the same location. In October 2003 a Cora hypermarket was
opened close to one of the most important and busy exits from the city.
The first modern mall-type complex opened in Bucharest in November 1999, in a rather
accessible area of the town and it belonged to the Turkish group Fiba. It was called
Bucuresti Mall and it was an international shopping centre, built to the highest standards
with good technical facilities and a total area of 26,500 sq m. Most of the products were
non-food goods, but Fiba opened a food supermarket, called Gima. Other few mall centres
opened in the main cities of the country, having, all of them, rather high profitability.
The retail network in the capital was centred on several boulevards that mainly covered
the central area of Bucharest, especially when taking into consideration non-food products
such as fashion, cosmetics, electronics (including computer systems) and luxury goods.
For example a most modern shopping centre was USC – Unirea Shopping Centre, a former
big department store of the communist period, that was rebuilt in the past few years of the
review period. Being placed in the very centre of the capital, USC was always very busy
and became the most fashionable place to shop in Bucharest.
Despite the entrance of the greatest European retailers, the fragmentation of retail trade
continued to be the main characteristic of the Romanian market. In spite of poor
infrastructure, competition was growing. In order to maintain their position, retailers were
beginning to carefully develop strategies and policies that included price decreases, small
stocks and reduced costs. Competition amongst retailers was reflected at the level of the
wholesale chains, which were under pressure as far as prices were concerned. This was
expected to contribute to a more accentuated development of hypermarkets and
supermarkets acting both as retailers and wholesalers.
Private label trends
Private label activity was in its infancy, as private labels were perceived as new brands,
not advertised and unknown by most consumers. Low availability hindered the growth of
the importance of private labels. Private label activity remained negligible in 2003 and no
significant change was expected in the near future.
The most significant foreign retail investors had already introduced their private labels into
the Romanian market. The most significant private label was Aro, belonging to Metro cash
& carry but its presence within C&T was negligible. Other significant private labels were
Gima – belonging to the Gima supermarket chain, XXL, Derby, Sissy, Molli, Carre – all of
them being private labels of the XXL discount superstore, Semina –La Fourmi's product
brand. However, all these brands were perceived as of lower quality than the wellestablished brands, which were advertised extensively and private label cosmetics and
toiletries products were almost absent.
Internet sales
In respect to Internet retailing, Romania was still at the beginning of the process. Although
Romania was far from being as active on the Internet as Western countries, Romanians
showed a great deal of enthusiasm for the Internet. However, Internet sales of C & T were
less evolved in Romania. Yankee Group, an important consultancy agency, situated
Romania at the bottom of the list with countries with e-commerce opportunities. This was
due to the population's low income, the lack of trust related to the security of Internet
transactions in this country, the lack of means to pay electronically, the lack of credit cards
and, most of all, the fact that only 5% of the population had home access to the Internet.
Low Internet value sales were also due to purchasing habits. Romanians were used to
buying with cash. Cards were generally carried instead of cash until the purchasing
decision was taken and cash was then retrieved from an ATM. The fear of fraud when
using cards also hampered Internet sales.
The presence of a credit or debit card was also required and the penetration rate of cards
was growing (an estimated 3,000,000 nationally, used mainly for salary payments), the
banking system did not accept easily payments by Internet so there was no reliable
solution for on-line payment for the moment. Most of the cards and PCs were concentrated
in Bucharest and a few large cities. The absence of clear legislation for Internet sales in
Romania was also a significant factor. The bulk of Internet purchases comprised
electronics, cameras and CDs, using foreign sites. METRO's FMCG implemented a service
where orders could be made through the Internet and payment of the purchased goods
was done upon delivery.
Romania was not considered to fulfil all the expansion criteria for multinationals acting in
on-line sales due to its low purchasing power and low possession of personal computers.
3.4 Forecast Market Performance
Despite economic growth spending power remains low
Euromonitor forecasts the Romanian C&T market to be worth Leu 13,208 billion by 2008,
down by 2.4% on 2003, in constant value terms. Despite the forecast growth, cosmetics
and toiletries and other consumer goods will be affected by low purchasing power, which is
not expected to reach growth rates comparable to GDP growth. According to specialists,
the Romanian GDP was expected to reach in 2004 the same level as in 1989. However,
purchasing power will remain far behind the level attained in 1989. More than that, most
consumers' income was spent on housing, domestic fuels and food, with little left to spend
on other consumer goods. Price of energy continued to be a problem for most of the
households and the sanitary reform stagnated, with shortages of drug supply on the
national health system.
Consequently, the decrease in retail sales of cosmetics & toiletries over the forecast period
reflects the aggregated effect of economic factors such as:
 The rising price of energy, which will increase heating bills;
 Increase in other utility prices (water, gas, electricity), as well as telephone and TV bills;
 Increased acquisitions of land and houses and renovation of existing ones;
 Credit systems developed by brown and white goods retailers who led consumers to
having a large number of part-payments at the same time. As a consequence, consumers
will havevless money left to spend on goods such as cosmetics and toiletries, perceived as
non-essential items.
Sales on credit of durable goods forecast to explode, leading to sales decline of some
FMCGs
The lowering inflation led to general interest towards credit systems. That, in its turn, led
to a notable decrease being registered in what sales of fast moving goods were concerned,
together with the increase of the brown and white goods demand. This has proved to be a
great opportunity for the brown and white goods and household appliance retailers, who
doubled their sales, to offer small instalment systems with very low interest. This trend
was expected to continue also in the future although international financing organisations
signalled that growth of non-governmental credit would affect inflation. Meanwhile, sales
of consumer goods, cosmetics and toiletries included, will counter-perform, perceived as
non-essential items, leading to sales decline over the forecast period.
Advertising and promotions will make the difference
Retail sales of cosmetics & toiletries, a very competitive market, will be encouraged by
strong advertising and PR campaigns. People were already being bombarded with TV, radio
and newspaper ads that encouraged them to buy different products – baby care shampoo
and skin care, bar soap and shower gels, shampoo and colourants, lip colour, men's
grooming products, toothpaste and toothbrushes, sun care, fragrances, and more.
Advertising was associated with aggressive campaigns that offered prices which seemed
exquisite to most Romanians. More educated consumers perceived advertising as untrue
but trials will become a significant component of consumption habits. Therefore, whether
accepted or rejected, advertising and promotions will continue to be the main tools for
brand recognition and the main determinants for the purchase decision.
Low purchasing power and market size limit foreign investment in the domestic industry
but will enhance competition among multinationals
Colgate-Palmolive was the first and the largest multinational to invest in the Romanian
industry through the acquisition of Stela Bucharest and Norvea Brasov in the early 90's.
Soon afterwards, the depression in the economy, followed by significant declines of
cosmetics & toiletries sales, led to the closure of Stela Bucharest and the focus on imports
of several products from neighbouring countries. This trend was expected to continue also
over the forecast period, especially for some basic products such as bar soap and
shampoo. No further spectacular investment was expected to occur over the forecast
period except in distribution development. Direct sales were forecast to improve also their
share but through extensive distribution and upgrade of storage facilities.
Demand for self-image and individualisation will determine growth of more sophisticated
sectors
Fragrances, sun care and colour cosmetics are expected to be the fastest growing sectors
over the forecast period, with growth rates of about 36%, over the whole of the review
period. Following that trend, fragrances are expected to become the main sector by 2008,
a result of increasing consumer expenditure for self-image and individualisation. The actual
presence of premium brands, although limited in terms of sales, was expected to remain
still but sales were expected to improve and thus lead to strong value sales.
The same demand is expected for sun care products, which are expected to be the most
dynamic over the forecast period despite the low size. It will continue to account for a very
small share of C&T, in value terms, but the increased presence of famous brands will lead
to significant growth. In addition to skin protection features, sun care also features a selfimage component, which will lead to growth in sales.
Colour cosmetics, also expected to be highly dynamic, will follow the need for
individualisation too. Consequently, increased concern for quality, longer lasting effects
and protection will result in the sector's high growth rates.
Basic sectors will diminish their share due to price decline and changes in lifestyle and
consumption habits
In percentage terms, the three basic sectors, oral hygiene, bath & shower products and
hair care will account for about 37.4% of the overall sales of cosmetic & toiletries in
Romania in 2008, down from 43.2% in 2003. It is likely that the main demand will reduce
on basic products and increase on new fast-growing sectors such as colour cosmetics,
fragrances, sun care and men's grooming. These dynamic sectors are expected to meet
the need for self – image and individualisation for which an increasing number of
consumers were prepared to pay more. Quality and health attributes will also have their
significant contribution on growth rates.
However, hair care will continue to account for a significant share of the C&T market due
to repositioning of the main shampoo brands from providing basic hair cleaning to
additional features such as colour protection and dandruff fighting.
Oral hygiene was expected to register a strong decline in value terms due to price
decrease, consequence of strong competition and also the perception of the products as
satisfying a basic need, regardless of all sorts of new attributes and combinations. Price for
hygiene products will remain the main determinant for the purchase decision regardless of
additional attributes.
Bath & shower and hair care products will be still perceived as satisfying only basic needs,
so value sales will decrease at a higher rate than volumes, expected to grow due to the
decreasing prices.
Competition in hair care and bath & shower is expected to be more intense than in the oral
hygiene sector, with a strong presence of very cheap products, manufactured locally or
imported.
Table 6 Forecast Retail Sales of Cosmetics and Toiletries by Sector: Value 20032008
Leu billion
Baby care
Bath and shower
products
Deodorants
Hair care
Colour cosmetics
Men's grooming
products
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
Premium cosmetics
Cosmetics and
toiletries
2003
159.8
1,661.1
2004
153.9
1,544.4
2005
149.3
1,466.5
2006
146.5
1,437.3
2007
143.9
1,426.7
2008
143.3
1,448.0
1,034.0
2,072.1
1,681.4
571.4
989.4
2,016.2
1,844.2
588.5
952.9
1,988.2
1,962.6
603.6
928.9
1,973.4
2,059.3
617.5
907.2
1,994.9
2,139.6
630.4
887.3
2,034.0
2,206.9
643.7
1,609.3 1,485.0 1,399.8 1,347.9 1,332.0 1,349.2
1,837.0 1,997.4 2,161.5 2,321.9 2,486.4 2,635.4
1,451.6 1,538.8 1,641.4 1,741.6 1,825.4 1,897.3
88.6
88.6
89.0
89.5
89.5
89.3
158.9
168.1
179.7
192.3
205.2
217.1
827.6
12,044.4 12,124.5 12,292.8 12,542.0 12,853.0 13,207.5
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 7 Forecast Retail Sales of Cosmetics and Toiletries by Sector: % Value
Growth 2003-2008
% constant value growth
Baby care
Bath and shower products
Deodorants
Hair care
Colour cosmetics
Men's grooming products
2003-08
CAGR
-2.2
-2.7
-3.0
-0.4
5.6
2.4
2003/08
TOTAL
-10.3
-12.8
-14.2
-1.8
31.3
12.7
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
Premium cosmetics
Cosmetics and toiletries
-3.5
7.5
5.5
0.2
6.4
1.9
-16.2
43.5
30.7
0.8
36.6
9.7
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
4. BABY CARE
4.1 Sector Performance
2003 headlines
 Baby sun fastest due to novelty effect and the change of perception towards a more
common product
 Decline of baby care, to remain a small sector despite competition and price decline
 Baby toiletries and baby skin take the lion's share but baby hair care performs a has
higher growth rate due to its increased usage by adults
 Leadership of Johnson & Johnson and multinationals but domestic players increase their
share due to lower prices and incresed availability
Baby sun fastest due to novelty effect and the change of perception towards a more
common product
Sales of baby sun care were negligible before 1997 and the size remained small over the
review period due to the presence on the market mainly of imported products, very
expensive and perceived as luxury products by most parents, who preferred to use choose
adult-orientated products for their children. Usage of one brand by the whole family
continued to be normal usage for sun care products, including for children.
However, in the latter years of the review period, domestic manufactures launched new
versions of their common brands, with higher protection factors, also recommended to
children. This was the case of Elmi Prodfarm, Farmec, Cosmetic Plant, launching their
cheaper versions which led to the strong dynamics of baby sun care products as they were
also used by parents who needed sun protection in the first days of exposure to the sun.
The novelty effect was also a main determinant for growth, especially in the context of
higher incomes and more educated parents. However, new domestic launches led to a
drop in value sales of 3.4% in 2003, in constant value terms.
Despite the impressive growth rate (38% in constant value terms in 19990, use of baby
sun care was limited by its perception as a luxury product. Most of the products were
imported and although prices declined due to competition, they remained high, making
them unaffordable to most of the population, with adult products being successful
alternatives. Additionally, usage of sun care products was seasonal and the full season at
the seaside was no longer than two months per year, usually July and August. Sun
protection accounted for the largest share of baby sun care due the fact that protection
was perceived as the main purpose for usage of baby sun care products. They accounted
for 95% of sales of baby sun care and their share was expected to remain unchanged in
the near future as most parents considered that protection was needed in order to avoid
after sun cure.
Decline of baby care, to remain a small sector despite competition and price decline
With current value sales of Leu 159.8 billion in 2003, the baby care sector accounted for a
low 1.5% share of the C&T market, up from 1.3% on 1998, consequence of increased
awareness and growing care for babies. The decline by 17%, in constant value terms, of
baby care sales over the review period was mainly the result of competition in the sector
and overall price decrease due to volume growth. Increasing usage of baby products by
adults with skin problems, mainly bar soap and shampoo, also fuelled volume growth
In this respect, availability of baby care products improved over the review period but the
sector remained small in terms of value sales due to the country's low levels of disposable
income. In rural and smaller urban areas, these products continued to be practically
unknown and 'adult targeted' products were often considered as cheaper and ready-to-use
substitutes for baby care products.
Baby toiletries and baby skin care take the lion's share but baby hair care has higher
growth rate due to its increased usage by adults
Baby toiletries and baby skin care were the main subsectors over the review period and
prior to that. Usage of baby bar soap targeted also at teenagers and adults increased as
these products were perceived as milder and healthier when skin problems were present
and, consequently, volume growth determined the presence of cheaper products, leading
to value decline. Skin care, advertised and also perceived as an alternative to some adult
usage, also boosted sales though they declined in value terms due to the presence of
cheaper brands.
Hair care registered the second highest growth rate over the review period (43.7% in
constant value terms) and was also the most dynamic in 2003, following the increased
usage by children and also by adults. Whilst some brands like Dalin targeted mainly
children, the new Johnson's 'no tears' baby shampoo was advertised also as suitable for
adults, leading to its growing market share, especially in urban areas. In small urban and
rural areas, consumption was much reduced due to lack of product awareness and low
incomes.
Baby skin care
Baby skin care was the second largest subsector within baby care products but, in
comparison to baby hair care and baby toiletries, led by baby soap, it was perceived as
suitable mainly for children due to the large size of adult skin care, with many subsectors
targeting different usages and heavily advertising consumer benefits.
Johnson & Johnson, with about 60% share and Beiersdorf, with a lower 21.5% share in
2003, were the leading manufacturers, both enjoying strong brand recognition due to
advertising and availability. Johnson & Johnson's baby oil was advertised on TV as an
excellent baby skin product and Beirsdorf's Nivea Baby benefited from a traditional
presence on the Romanian market as an excellent adult skin care cream.
Leadership of Johnson & Johnson and multinationals whilst domestic players increase their
share due to lower prices and availability
Johnson & Johnson was the leading manufacturer over the review period and its Johnson's
Baby was the leading brand. It benefited from its early presence on the market and brand
recognition through heavy advertising and promotions. Present on the market with a full
line of baby care, it also advertised its baby shampoo as suitable also for adults, which led
to significant growth and penetration of all its baby products. Lack of advertising for the
main competitors, low product awareness and negligible presence in the low margin
channels were the main determinants for Johnson & Johnson's share gain.
Multinationals accounted for the highest share of baby care products. Beiersdorf's Nivea
Baby increased its availability in the main distribution channels and gained significant
share due to its increased presence in the baby toiletries sector, and it held the leading
position in the minor baby sun subsector.
After a period of intensive growth, which brought Colgate-Palmolive from an initially low
starting point to second position, a decline was perceived in 2000 after the closure of
Stela, its soap manufacturing facility in Romania. The advantage of lower priced products,
manufactured locally, was lost, so the high brand value share of its main product, Baby
Magic, declined significantly during 2003 to about 2%. The low size of the sector was not
an incentive for Colgate-Palmolive to compete in this minor sector as it continued to lead
the main basic bar soap subsector within bath & shower products.
Evyap Sabun, with Arko baby soap and Henkel, with Schauma shampoo for kids increased
their share due to advertising but also increased usage by adults, which perceived the
products as milder and suitable for sensitive skin. Arko also had the advantage of the
presence of Arko soap for adults, which already took an excellent share due to strong
distribution and lower prices.
Chicco from Artsana, Baby Roberts from Manetti & Roberts & C, Event by Axxon Group,
Sanosan from Mann & Schroder and Zwitsal from Kortman Intradal declined in 2003
despite the companies' participation in many areas of baby care. Promoted soon after their
launch, they lost share due to higher prices and limited distribution. The low perception of
the products as satisfactory for adult use also determined the share loss.
Sanosan from Mann & Schroder and Zwitsal from Kortman Intradal were the main brands
launched directly in the baby care sector. Low product awareness, higher prices and
limited distribution to very large urban areas and more expensive channels led to share
loss for Zwitsal, perceived as expensive. Sanosan benefited from the presence of other
Mann & Schroder brands in other more significant sectors of the market and from better
distribution.
Manufacturers, present in other significant sectors, also launched their baby versions of
established brands in baby hair care over the review period, repositioned as also suitable
for adult usage. This was the case with Astera active for Kids, Schauma for kids, Neutro
Roberts Junior, Dulgon Body care for Children, Corine de Ferme for Children, Florena for
Kids, but their share remained low due to lack of awareness and limited distribution. The
main launch was Kopas Kozmetic's Dalin, advertised as no tears shampoo, whose share
increased rapidly in 2003. Advertising continued to represent the main tool for share gain
in this small sector, with Johnson's Baby and Dalin accounting for the heaviest
expenditure.
Table 8 Retail Sales of Baby Care by Subsector: Value 1998-2003
Leu billion
Baby
Baby
Baby
Baby
Baby
toiletries
hair care
skin care
sun care
care
1998
23.7
4.6
18.9
0.1
47.3
1999
29.8
5.2
21.3
0.3
56.6
2000
47.8
10.6
36.2
0.5
95.2
2001
58.1
17.7
49.5
0.8
126.1
2002
63.8
22.4
56.7
1.1
144.0
2003
69.3
26.6
62.6
1.3
159.8
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 9 Retail Sales of Baby Care by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Baby
Baby
Baby
Baby
Baby
toiletries
hair care
skin care
sun care
care
8.6
18.8
10.4
12.3
10.9
1998-03
CAGR
23.9
42.3
27.1
54.6
27.6
1998/03
TOTAL
192.2
484.2
231.1
782.8
237.6
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 10 Baby Care Company Shares 2001-2003
% retail value rsp
Company
Johnson & Johnson Romania SRL
Beiersdorf Romania SRL
Evyap Sabun Yag Gliserin Sanayii ve Ticaret
AS
Henkel Romania SRL
Elmi Prodfarm SRL
Axxon Romania SRL
Manetti & Roberts & C SpA
Alix Avien Cosmetics SRL
Mann & Schröder GmbH
Kortman Intradal GmbH
Avon Cosmetics Romania SRL
Colgate-Palmolive Romania SRL
Artsana SpA
Romira Cosmetics SRL
Florena Cosmetic GmbH
Gerovital Cosmetics SA
Genmar Cosmetics SRL
Astera Romania SRL
Coral Comex Srl
Farmec SA
Others
Total
2001
48.7
16.4
0.5
2002
50.9
20.5
1.5
2003
51.0
23.3
4.2
2.1
4.0
1.3
2.7
3.7
2.6
0.5
2.8
2.1
0.4
2.0
0.8
0.1
0.1
0.6
8.6
100.0
2.7
2.9
3.2
2.0
0.3
1.6
1.4
0.8
2.1
1.3
1.1
0.4
0.9
0.4
0.3
0.4
0.4
4.9
100.0
3.0
2.5
2.0
1.7
1.5
1.2
1.0
1.0
0.9
0.7
0.7
0.7
0.5
0.4
0.3
0.2
0.2
2.9
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 11 Baby Care Brand Shares 2001-2003
% retail value rsp
Brand
Johnson's Baby
Nivea Baby
Arko
Schauma
Elmiplant
Event
Baby Roberts
Dalin
Sanosan
Zwitsal
Avon Kids
Palmolive Kids
Chicco
Royal Baby
Florena Baby
Miraj Baby
Herbagen
Nivea Sun
Company
Johnson & Johnson Romania SRL
Beiersdorf Romania SRL
Evyap Sabun Yag Gliserin Sanayii
ve Ticaret AS
Henkel Romania SRL
Elmi Prodfarm SRL
Axxon Romania SRL
Manetti & Roberts & C SpA
Alix Avien Cosmetics SRL
Mann & Schröder GmbH
Kortman Intradal GmbH
Avon Cosmetics Romania SRL
Colgate-Palmolive Romania SRL
Artsana SpA
Romira Cosmetics SRL
Florena Cosmetic GmbH
Gerovital Cosmetics SA
Genmar Cosmetics SRL
Beiersdorf Romania SRL
2001 2002 2003
47.2 49.8 50.3
14.5 18.2 22.2
0.5
1.5
4.2
2.1
4.0
1.3
2.0
3.7
2.6
0.5
2.8
2.1
0.4
2.0
0.8
0.3
2.7
2.9
3.2
1.6
0.3
1.6
1.4
0.8
2.1
1.3
1.1
0.4
0.9
0.4
0.4
3.0
2.5
2.0
1.5
1.5
1.2
1.0
1.0
0.9
0.7
0.7
0.7
0.5
0.4
0.3
Astera
Tom & Jerry
Farmec Bebe
Neutro Roberts
Others
Total
Astera Romania SRL
Coral Comex Srl
Farmec SA
Manetti & Roberts & C SpA
0.1
0.3
0.3
0.1
0.4
0.2
0.6
0.4
0.2
0.7
0.4
0.2
11.7
8.0
4.5
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 1 Baby Care New Product Developments 2002-2003
Brand name
Company
Product type
Dalin
Kopas Kozmetic
Teo Bebe
Elgeka -Ferfelis
Romania Srl
Johnson &
Johnson
Baby toiletries, Baby hair
care
Baby toiletries
Johnson's Baby No More
Tears
Launch
date
2003
2003
Baby shampoo, with
added wheat extract. No
tears.
2003
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
4.2 Forecast Sector Performance
Baby care will continue to represent a minor sector of the C & T market, perceived as nonessential. Only the presence of basic products, such as baby soap and baby shampoo, is
expected to maintain product awareness due to their interest in usage by adults. As long
as incomes remain low compared to the GDP's annual growth, baby care products will
continue to decline, at a rate of 2.2% per year in constant value terms.
Baby hair care will remain steady due to increased usage by adults. Baby toiletries and
baby skin care will register decline in constant value sales of 3.7% and 1.5% respectively.
That is due mainly to decreasing interest in the usage of specialised products as baby care,
perceived by many consumers as too expensive. Low product awareness and availability
will also lead to sale decrease.
Baby sun care is also expected to register decline (-1.7% CAGR) due to the increased
usage of high protection factor products, targeting both adults and babies and children.
The growing presence of cheaper domestic products in this subsector will lead to value
decline over the forecast period.
Table 12 Forecast Retail Sales of Baby Care by Subsector: Value 2003-2008
Leu billion
Baby
Baby
Baby
Baby
Baby
toiletries
hair care
skin care
sun care
care
2003
69.3
26.6
62.6
1.3
159.8
2004
65.3
27.1
60.2
1.2
153.9
2005
62.1
27.5
58.5
1.2
149.3
2006
59.8
27.8
57.7
1.2
146.5
2007
58.1
27.4
57.3
1.2
143.9
2008
57.3
26.6
58.2
1.2
143.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 13 Forecast Retail Sales of Baby Care by Subsector: % Value Growth 20032008
% constant value growth
Baby
Baby
Baby
Baby
Baby
toiletries
hair care
skin care
sun care
care
2003-08
CAGR
-3.7
0.0
-1.5
-1.7
-2.2
2003/08
TOTAL
-17.3
0.1
-7.1
-8.4
-10.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
5. BATH AND SHOWER PRODUCTS
5.1 Sector Performance
2003 headlines
 Body wash/shower gel and bath additives are the fastest growing sectors due to
increased penetration in urban areas among higher income consumers
 Increased usage of cheap products determines value decline
 Still considered as a multipurpose product, bar soap keeps supremacy
 Colgate-Palmolive keeps the leadership but looses share due to strong competition from
multinationals
 Trend towards sophistication leads to significant new launches, focused on added
features and health benefits.
Body wash/shower gel and bath additives are the fastest growing sectors due to increased
penetration in urban areas among higher income consumers
Accounting for 81.8% constant value growth over the review period, body wash/shower
gel was the fastest growing subsector and worth Leu 176.3 billion in 2003. This growth
rate was a consequence changes in the population's consumption habits in urban areas,
where showers became more important than baths as a rapid cleaning method. Showers
were very important in urban areas, where living conditions continued to be much better
than in rural areas, where piped water and inside bathrooms continued to have low
penetration.
Shower gel retained the bulk of sales, perceived as an alternative for bar soap while body
wash was perceived more as a luxury product, appropriate for skin treatment. New
launches in 2003 of body washes with scrubbing effect enhanced sales of body
wash/shower gel, following advertising efforts made by the main manufacturers such as
Colgate-Palmolive, Beiersdorf, Unilever and direct selling companies Avon and Oriflame.
The launch of 2-in-1 products, shower gel and shampoo, was also significant for the
growth of the sub-sector, perceived as more economic even though it provided less
benefits than shampoo. It remained limited mainly to consumers searching for
convenience due to time shortage. New combinations of different herbs and tree extracts
also led to significant growth, which continued also in 2003, when body wash/shower gel
registered 1.6% growth rate, in constant value terms.
Bath additives, namely bath foam, also registered significant growth rates (53% in
constant value terms over the review period) but it targeted mainly consumers in search of
relaxing baths. They accounted for a smaller 7.9% sector value share in 2003, but
penetration rate continued to remain low. Penetration was limited by a low number of
inside bathrooms in rural areas but also in large city neighbourhoods, where the lack of
piped water and sewage systems remained endemic, despite efforts towards
modernisation and improving water supply in rural areas. As a result, there was low
product awareness and high prices compared to bar soap made them prohibitive for lower
income consumers.
Bath additives continued to be perceived as luxury products and only the new perception
that the shower was for cleaning and the bath for relaxation determined the significant
growth rate of bath additives. The relaxing and therapeutic effect of bath salts was also a
significant determinant for the sector growth due to the increased usage by people
suffering of rheumatism, muscle pain or respiratory diseases. The anti-stress effect was
also significant for the growing usage.
Foaming products were perceived as luxury products compared to salt, used more for its
therapeutic effect. Due to higher prices, value sales of foaming products accounted for the
bulk of the sub-sector value sales even though volume sales were comparable to salt. Its
growth rate was also much higher due to the novelty effect and the perception as a
cosmetic product rather than a therapeutic one. Bath additives were worth Leu 130.7
billion in 2003.
Increased usage of cheap products determines value decline
With current value sales of Leu 1,661.1 billion in 2003, bath and shower products
accounted for 13.4% share within the overall cosmetics and toiletries market, down from
25.4% in 1998. Still considered by most consumers as satisfying basic needs, the sector
retained the leadership of cosmetics and toiletries market in the first years of the review
period, when the market was unformed and unsophisticated. The changes that took place
in consumption habits and lifestyle, mostly determined by advertising and new launches,
led to share loss against other sectors over the review period, ranking only fifth in 2003.
Their perception as satisfying only basic needs led to a higher value decline rate compared
to volume. Decline was mainly determined by low purchasing power, high price sensitivity
and the perception that for a basic product it was not worth paying more. Launches of
new, more sophisticated versions of existing brands, with exfoliating features, reached
only higher-income users in large cities while most consumers continued to stick to
popular brands and versions, cheaper and readily available in all retail channels.
Still considered as a multipurpose product, bar soap keeps the supremacy
The largest subsector in 2003 within bath & shower continued to be bar soap, despite
excellent growth rates registered by the smaller categories body wash/shower gel and
bath additives. With sales of Leu 1,198.4 billion in 2003, bar soap accounted for 72.1% of
bath and shower sales, down from 86.6% in 1998. That was the result of increased usage
of body wash/shower gels and bath additives, especially in large urban areas, but also the
overall price decline of bar soap, determined by strong competition and low purchasing
power.
Clear dominance of bar soap was due mainly to the low level of household penetration of
other products within the bath & shower sector, despite their significant growth over the
review period. For example, the lack of piped water and limited bathroom facilities in more
than 80% of rural households rendered shower gels and bath additives superfluous for
about 40% of the country's population. As a consequence, retail sales of bar soap
continued to account for the bulk of bath & shower value sales throughout the review
period even though value sales continued to decline by another 16.3%, in constant value
terms, in 2003, to register the highest decline rate within the sector over the review
period. Usage of traditional cheap, domestically produced soap for a wide number of
purposes, including personal hygiene, led to this significant drop in value sales.
Liquid soap and talcum powder were the smallest sub-sectors, worth Leu 126 billion and
Leu 29 billion respectively in 2003. If talcum powder was perceived as a medical-care
product, liquid soap declined rapidly after its launch due to higher prices, low product
awareness and availability and its perception as a luxury alternative to the cheap and
traditional bar soap.
Colgate-Palmolive keeps the leadership but looses share due to strong competition from
other multinationals
Competition was concentrated in the hands of a few multinationals. The top five
manufacturers accounted in 2003 for 67.7% of the overall sector value sales. They were
also the main players in the largest bar soap sub-sector, showing the same concentration
as for the whole sector. Bar soap also enjoyed the presence of cheaper brands, imported
from Turkey or some Arab countries, and their presence was significant for bar soap
mainly in volume terms rather than in value terms due to their low prices. The strong
presence of cheaper brands manufactured by Evyap Sabun, the second ranking
manufacturer, and imported from Turkey led to value decline of the sector over the review
period, by 47% in constant value terms. However, the low prices of the main brands Duru,
Fax and Arko, strong availability in all retail channels, together with changes in perception
as products with improved quality made Evyap retain its leading position in the bar soap
sub-sector.
Colgate-Palmolive was the leading manufacturer in 2003, with a sector value share of
18%. Its brand Palmolive also retained a leading position although it lost share after the
closure of Stela facility in Bucharest. After that the brand started to be imported from
neighbouring countries, free of duty, holding the competitive advantage of quality at lower
prices. As imports from EU and CEFTA countries were now duty free, competition was
focused more on additional features rather than on price. However, Colgate-Palmolive
retained the leadership due to its wide product offerings, with an increasing number of
fragrances for Palmolive and Protex bar soap, liquid soap and shower gel and the launch of
new brand extensions.
Unilever was the third leading manufacturer, producer of the popular brands Lux, Rexona,
Amo and Dove. It increased its value share since 2001 due to the better performance of
Dove in the bar soap subsector, heavily advertised as an excellent hand cream at a bar
soap price. The launch of Dove exfoliating bar also tried to induce the appropriate usage of
this bar for the bath. The presence of Dove Shower Care, Lux and Axe in shower gels and
Dove, Lux and Amo in liquid soap also led to excellent performance by Unilever.
Henkel, with Fa, and Beiersdorf, with Nivea Bath Care, also accounted for good shares, due
mainly to the manufacturer's strategy of one brand in all the sub-sectors. They increased
availability in all the main channels and advertising focused on the perception of the
brands as providing good quality at affordable prices.
Manetti & Roberts & C with Neutro and Procter & Gamble with Camay were other
significant multinational companies but their presence was limited to large urban areas.
Direct sales companies Avon and Oriflame accounted together in 2003 for about 8% of
total value sales, being present mainly in bath additives and body wash/shower gel. They
also made attempts in 2003 to launch bar soap and liquid soap, namely Avon Aqua and
Oriflame Ocean Algae, both providing scrubbing attributes.
Trend towards sophistication leads to significant new launches, focused on added features
and health benefits
Due to the large size of the sector and its attractiveness, but also due to strong
competition, multinationals were the champions of new launches in order to maintain or
even increase their share. That was done in a context of conditions where lifestyles
remained largely traditional, with the exception of Bucharest and a few other large cities.
In rural areas and small cities, traditional consumption habits prevailed, with still intensive
consumption of homemade soap, used for several cleaning purposes.
Consequently, new launches focused on added features and benefits of the wellestablished brands, associated with new packaging formats, in order to meet the demand,
concentrated on cheap, familiar brands and products. Colgate-Palmolive was the champion
of new launches, with its new bar soap and liquid soap Palmolive Aroma Therapy, which
followed the launch in 2002 of the same shower gel and bath additive brand. Palmolive
Nourishing, a liquid soap, Palmolive Vitamins, a bar soap with vitamins and the very new
Palmolive Thermal SPA, a scrubbing shower gel, completed the new launches of the leader.
These new launches were expected to meet the increased demand for exfoliating gels,
creams and bars, perceived as providing health benefits, although awareness remained
limited to highly-educated consumers in large urban areas.
In order to meet this increasing demand, direct sales companies also launched scrub bars,
hoping to create better awareness and increase demand for products with added benefits
also in small urban and rural areas, where direct sales were growing rapidly.
Nivea launched its Nivea Bath liquid soap and its Nivea Isotonic shower gel for men but the
impact was very low due to the small sizes of the subsectors. The bar soap leader, Evyap
Sabun, also entered the liquid soap market with its Arko brand and launched Ava in bar
soap, a large size, cheap soap with Aloe Vera.
Table 14 Retail Sales of Bath and Shower Products by Subsector: Value 19982003
Leu billion
Bath additives
- Bath salts
- Foam bath
Body wash/shower gel
Bar soap
Liquid soap
Talcum powder
Bath and shower
products
1998
21.0
4.3
16.7
23.8
673.9
45.0
14.2
778.0
1999
38.4
6.5
31.9
44.8
938.6
52.7
15.5
1,090.0
2000
71.8
9.8
62.0
79.2
1,230.4
59.8
17.3
1,458.6
2001
98.7
12.9
85.8
114.2
1,241.2
87.4
20.5
1,562.0
2002
118.2
14.6
103.6
149.3
1,232.8
110.4
24.8
1,635.5
2003
130.7
15.9
114.8
176.3
1,198.4
126.3
29.4
1,661.1
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 15 Retail Sales of Bath and Shower Products by Subsector: % Value Growth
1998-2003
% current value growth
2002/03
Bath additives
- Bath salts
- Foam bath
Body wash/shower gel
Bar soap
Liquid soap
Talcum powder
Bath and shower products
10.6
8.9
10.8
18.1
-2.8
14.4
18.5
1.6
1998-03
CAGR
44.1
29.9
47.0
49.2
12.2
22.9
15.6
16.4
1998/03
TOTAL
522.4
269.8
587.4
639.4
77.8
180.5
106.7
113.5
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 16 Bath and Shower Products Company Shares 2001-2003
% retail value rsp
Company
Colgate-Palmolive Romania SRL
Evyap Sabun Yag Gliserin Sanayii ve Ticaret
AS
Unilever Romania SA
Henkel Romania SRL
Beiersdorf Romania SRL
Avon Cosmetics Romania SRL
2001
20.6
19.9
2002
18.9
16.4
2003
18.0
16.5
11.7
11.3
4.4
2.3
12.4
12.3
5.6
3.5
13.9
11.6
7.7
5.1
Procter & Gamble Marketing SRL
Oriflame Cosmetics Romania SRL
Manetti & Roberts & C SpA
Johnson & Johnson Romania SRL
Salrom SA
Interstar Chim SA
Mirato Nuova SpA
Elmi Prodfarm SRL
Sara Lee Corp
Mann & Schröder GmbH
Ream GmbH
Axxon Romania SRL
Romira Cosmetics SRL
Mil Mil SpA
Coty Cosmetics Romania SRL
Papoutsanis SA, PD
Artsana SpA
Sarbec, Laboratoires
Others
Total
4.8
2.4
2.1
1.1
0.9
0.3
0.5
0.2
0.8
0.4
0.2
0.1
0.2
0.2
0.2
0.2
0.2
15.0
100.0
5.0
3.1
2.2
1.0
0.9
0.5
0.6
0.3
0.6
0.4
0.1
0.2
0.1
0.2
0.2
0.2
0.1
0.1
15.2
100.0
4.3
3.0
1.8
1.0
0.8
0.7
0.5
0.4
0.3
0.3
0.2
0.2
0.2
0.2
0.1
0.1
0.1
0.1
12.9
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 17 Bath and Shower Brand Shares 2001-2003
% retail value rsp
Brand
Fa
Duru
Nivea Bath Care
Palmolive
Lux
Fax
Palmolive Naturals
Camay
Protex
Oriflame
Dove
Fa Wellness
Arko
Amo
Rexona
Avon
Avon Aqua
Neutro Roberts
Palmolive Fruit Essentials
Milk Made
Sargen
Johnson's Baby
Avon Naturals
Trim Primavera
Palmolive Aromatherapy
Malizia
Fiori Roberts
Company
Henkel Romania SRL
Evyap Sabun Yag Gliserin Sanayii
ve Ticaret AS
Beiersdorf Romania SRL
Colgate-Palmolive Romania SRL
Unilever Romania SA
Evyap Sabun Yag Gliserin Sanayii
ve Ticaret AS
Colgate-Palmolive Romania SRL
Procter & Gamble Marketing SRL
Colgate-Palmolive Romania SRL
Oriflame Cosmetics Romania SRL
Unilever Romania SA
Henkel Romania SRL
Evyap Sabun Yag Gliserin Sanayii
ve Ticaret AS
Unilever Romania SA
Unilever Romania SA
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Manetti & Roberts & C SpA
Colgate-Palmolive Romania SRL
Avon Cosmetics Romania SRL
Salrom SA
Johnson & Johnson Romania SRL
Avon Cosmetics Romania SRL
Interstar Chim SA
Colgate-Palmolive Romania SRL
Mirato Nuova SpA
Manetti & Roberts & C SpA
2001 2002 2003
11.3
9.8
8.8
8.7
7.7
7.8
4.4
11.7
5.7
7.2
5.5
9.2
5.9
5.1
7.7
7.5
6.1
5.4
3.6
4.0
5.3
2.4
2.9
2.4
4.4
4.6
4.6
3.1
2.8
2.5
2.2
4.4
3.9
3.9
3.0
3.0
2.8
2.2
1.6
0.8
0.6
0.7
1.2
0.4
0.9
0.6
0.3
0.3
0.4
0.8
1.8
1.0
1.0
1.0
1.5
0.4
0.7
0.9
0.7
0.4
0.5
0.3
0.5
0.6
2.1
1.5
1.5
1.5
1.3
1.3
0.9
0.8
0.8
0.7
0.7
0.6
0.5
0.4
Elmiplant
Badedas
Ream
Johnson's pH 5.5
Palmolive Nourishing
Event
Royal
Look Model
Dulgon
adidas
Papoutsanis
Intesa
Chicco
Corine de Farme
Others
Total
Elmi Prodfarm SRL
Sara Lee Corp
Ream GmbH
Johnson & Johnson Romania SRL
Colgate-Palmolive Romania SRL
Axxon Romania SRL
Romira Cosmetics SRL
Mil Mil SpA
Mann & Schröder GmbH
Coty Cosmetics Romania SRL
Papoutsanis SA, PD
Mirato Nuova SpA
Artsana SpA
Sarbec, Laboratoires
0.2
0.3
0.4
0.8
0.6
0.3
0.1
0.2
0.4
0.3
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.2
0.2
0.2
0.2
0.3
0.3
0.2
0.2
0.2
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.2
0.1
0.1
0.2
0.1
0.1
18.7 18.7 16.4
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 2 Bath and Shower Products New Product Developments 2002-2003
Brand name
Palmolive Nourishing
Company
ColgatePalmolive
Palmolive Aroma Therapy ColgatePalmolive
Palmolive Aroma Therapy ColgatePalmolive
Nivea Bath Care
Beiersdorf
Avon Aqua
Avon
Products
Oriflame Ocean Algae Scrub Oriflame
Bar
Oriflame Cleansing Bar
Oriflame
Ava
Evyap Sabun
Palmolive Vitamins
Boscovivo
Palmolive Thermal SPA
Arko
Aroma Vital
Nivea Isotonic
ColgatePalmolive
Ben Fatto
ColgatePalmolive
Product type
Liquid soap
Launch date
2003
Liquid soap; bar soap
2003
Shower gel
2002
Liquid soap
Bar soap; liquid soap
2003
2003
Bar soap, with marine
herbs, scrubbing features
Bar soap
Bar soap, larger size
(150g), with aloe vera,
cheap
Bar soap with vitamins
2003
Liquid soap
New scrubbing shower
gel, with minerals and
clay
Evyap Sabun Liquid soap
Aroma AD
Nourishing, cream bar
soap
Beiersdorf
Men's shower gel
2003
2002
March 2003
July 2003
October 2003
October 2003
October 2002
September
2003
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
5.2 Forecast Sector Performance
Euromonitor forecasts the bath and shower sector to be worth Leu 1,448 billion by 2008,
down by 12.8% on 2003, in constant value terms. As a basic sector, the low purchasing
power of the population will lead to a continuous decrease in price, even though volume
sales will grow. Positive changes in the disposable incomes of the population will not affect
strongly this sector as products will continued to be perceived as satisfying basic needs
and paying more for everyday usage products was not considered worthwhile. New addedbenefits will be accepted as long as prices remain low.
New programs for piped water supply will determine an increase in demand over the
forecast period but mainly for soap. A larger number of inside bathrooms is expected to
create awareness more for liquid soap than for shower gels, as bar soap will continued to
retain sales in rural areas. Liquid soap, perceived as universal cleaning products, both for
hands and body, is expected to register positive growth rates. Talcum powder, considered
more as a medical product than as bath products, is expected to be the most dynamic over
the forecast period (3.3% CAGR) but its starting base is very low and sales are expected
to be limited to highly-educated consumers.
Smaller subsectors, such as bath additives and body wash/shower gel will decline over the
review period, by a CAGR of 2.5% and 0.7% respectively. That is due to strong
competition and price decline, consequence of their increased perception as basic
products. That is still more dynamic than the largest bar soap subsector, showing an
increased consumer interest in specialist products.
However, in percentage terms, the bar soap subsector will continue to concentrate the
bulk of value sales, accounting in 2008 for about 68.3% of the overall sales of bath and
shower products in Romania, down by 17.5% percentage points on 2003. It is likely that
the main demand will remain concentrated on basic products, with minor changes in
overall consumer behaviour.
Table 18 Forecast Retail Sales of Bath and Shower Products by Subsector: Value
2003-2008
Leu billion
Bath additives
- Bath salts
- Foam bath
Body wash/shower gel
Bar soap
Liquid soap
Talcum powder
Bath and shower
products
2003
2004
2005
2006
2007
2008
130.7
125.4
121.2
118.0
116.3
115.0
15.9
15.1
14.4
13.8
13.4
13.1
114.8
110.3
106.8
104.2
102.9
101.8
176.3
178.4
179.7
177.7
174.3
170.0
1,198.4 1,085.8 1,008.7
981.4
970.6
989.1
126.3
124.8
126.2
128.3
132.4
139.4
29.4
30.0
30.9
31.8
33.1
34.6
1,661.1 1,544.4 1,466.5 1,437.3 1,426.7 1,448.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 19 Forecast Retail Sales of Bath and Shower Products by Subsector: %
Value Growth 2003-2008
% constant value growth
Bath additives
- Bath salts
- Foam bath
Body wash/shower gel
Bar soap
Liquid soap
Talcum powder
Bath and shower products
2003-08
CAGR
-2.5
-3.8
-2.4
-0.7
-3.8
2.0
3.3
-2.7
2003/08
TOTAL
-12.0
-17.6
-11.3
-3.6
-17.5
10.4
17.6
-12.8
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
6. DEODORANTS
6.1 Sector Performance
2003 headlines
 Although sprays retain the bulk of sales, sticks are the most dynamic due to perception
as providing longer-lasting effect
 Value sales decline due to strong competition and overall price decrease
 Usage of a deodorant or antiperspirant becomes a habit for most of the urban population
 Negligible sales of deodorant wipes
 Leadership of Unilever in a highly concentrated sector, dominated by multinationals
 Launch of new versions and brand extensions-the main move employed by
manufacturers in order to maintain or gain share.
Although sprays retain the bulk of sales, sticks are the most dynamic due to the perception
as providing longer-lasting effect
With sales of Leu 733.8 billion in 2003, sprays was the largest deodorants subsector in
value terms and accounted for 71% of sector value sales, down from 82.9% in 1998.
Sprays retained the bulk of value sales due to their perception as cheaper alternatives for
fragrances, lower prices, availability and traditional usage. Meanwhile, they also benefit
from traditional usage for decades, sprays being the single format available on the market
before the 90's and the main format for cheaper, locally manufactured products.
Sprays started to loose share against the new formats, sticks and roll-ons. Despite the
new messages that sprays were as good in terms of protection as other deodorant
formats, they were still perceived as providing shorter-time effect, based on the previous
advertising message that after the alcohol in sprays evaporates the product's protection
ceases. This message contributed to the creation of the image of a longer lasting effect for
solids and roll-ons, which determined a share growth of these formats to the detriment of
sprays despite the launch of new alcohol-free sprays. While roll-ons declined over the
review period at a lower rate than sprays due to low advertising and availability, sticks
registered a positive 2.2% growth rate over the review period, in constant value terms,
although competition forced the decrease of selling prices.
During the latter years of the review period, overall advertising focused on the 24 hour
intensive effect for all deodorants but the image of a better product in this respect for
solids led to a higher growth rate for them compared to a declining rate for sprays and
roll-ons.
Sales decline due to strong competition and overall price decrease
With current value sales of Leu 1,034 billion in 2003, deodorants accounted for 8.4% share
of the C&T market, down from 10.4% in 1998. Value sales declined by 39.8%, in constant
value terms, over the review period and the trend continued also in 2003, when
deodorants declined by another 5%, consequence of low purchasing power and high price
sensitivity. Perceived more and more as basic products, availability and product awareness
remained high, fuelled by heavy advertising of long-lasting effect, no matter the format.
For most less-educated consumers, deodorants were still considered as cheaper alternative
to fragrances.
After a period of new launches of more expensive imported brands, when quality rather
than price was the determining factor in the purchase of deodorants, declining purchasing
power and competition led to overall price declines. The presence of cheaper branded
fakes on the market and street stalls was another reason for the drop in value sales.
Although deodorants should be used daily, a new trend of seasonality was perceived – with
higher consumption during hot summers but regular usage was increasing. According to
recent studies, populations in urban areas became regular users of deodorants, with the
share of users amounting to 95% for educated people and to 74% for less educated. Highincome consumers were also heavy users of deodorants, amounting to 96%, while lowincome consumers also reached 77% usage rate. In rural areas, which accounts for about
45% of the population, consumption was much reduced compared to urban areas due to
the high number of old people, low incomes and lower education.
Usage of a deodorant or antiperspirant becomes a habit for most of the urban population
A new trend towards increased usage of antiperspirant products was observed in the latter
years of the review period and the trend was accentuated in 2002 and 2003 due to strong
advertising of the long-lasting effect of anti-perspirants and their increased availability in
all retail channels. While at the beginning of the review period most consumers were not
aware of the differences between an antiperspirant and a body- perfumed spray, between
an ordinary and a long lasting effect product or between an alcohol based and an alcoholfree products, things changed due to adverting, increased levels of education and
availability of all the types of deodorants in the retail channels.
According to the Law of Cosmetics (n.650/2002), deodorants and anti-perspirants were
considered as cosmetics and toiletries while antitranspirants were included in the
parapharmaceutical products category and should be authorised by the Ministry of Health.
As a result, both deodorants and antiperspirant were present on the market but balance
goes for anti-perspirants in 2003, by an approximate share of 51/49 for anti-perspirants.
The shares were different when considering women/men split: 60% of women used antiperspirants while 60% of men used deodorants. At the same time, anti-perspirants were
increasingly used by young people while deodorants were used mainly by people aged over
55 and by less educated consumers.
Negligible sales of deodorant wipes
Deodorant wipes were in their infancy. The concept was unknown for most Romanians,
there was no product awareness and availability was limited to
hypermarkets/supermarkets and pharmacy chains in large urban areas. Direct sales also
tried to push deodorant wipes on the market by creating awareness but results were very
weak. Sales were expected to remain also negligible in the future unless new benefits will
be added.
Leadership of Unilever in a highly concentrated sector, dominated by multinationals
The sector was concentrated in the hands of a few multinationals, accounting for the bulk
of the volume and value sales in 2003. The top eight manufacturers, namely Unilever,
Henkel, Beiersdorf, Colgate-Palmolive, Coty, Farmec and Avon and Oriflame accounted
together for 86.6% of the overall sales. Although purchasing power remained low, there
was strong competition for this relative large sector, which can prove to become highly
dynamic in the future due to new launches, increased education levels and regular daily
usage.
Unilever was the leading manufacturer in 2003 with a sector share of 21.5% in value
terms. It comfortably held the leading position throughout the review period by virtue of
its popular and strong selling brands Rexona, Impulse Axe and recently Dove. Rexona,
Dove and Axe were available in spray and solid formats and benefited from heavy
advertising and the image of a 24 hour intensive deodorant. Impulse only came in spray
format and retained the image of a perfumed body spray.
Ranking second in 2003, Henkel was a prominent company in all areas of deodorants and
its Fa brand was the sector leader in 2003. Sales of Fa, produced in both spray and solid
formats, were helped by strong advertising and also by the presence of a single famous
brand in all subsectors. Beiersdorf and its brand Nivea ranked third in the same year.
Coty's share increased steadily due to its higher prices, at the top end of the mass market,
and strong advertising on TV and in print media, especially women's magazines. It ranked
fifth in 2003.
Colgate-Palmolive dominated by far the most dynamic subsector, sticks. Its position within
the whole sector, it ranked fourth, can be explained by its limited presence in the sprays
subsector, which accounted for the largest share within the sector. In order to improve its
position within deodorants, Colgate-Palmolive launched three deodorant sprays under the
same brand, Lady Speed Stick. The company was trying in this way to transfer the brand
awareness it had already gained with solids to the new sprays and thus accomplished two
goals: enter the deodorant spray, which was larger than the solid, and also reach lowerincome consumers, considering that the price of sprays was lower than the price of solids.
A consistent advertising budget was set for this launch campaign.
Farmec was the only domestic manufacturer in the top ten in 2003, accounting for an
8.1% value share of deodorant sales. Its position in this highly competitive market
dominated by multinationals was the result of an investment of US$3 million for the
manufacture of ecological spray deodorants. The higher quality of these deodorants
followed EU regulations on environmental protection and lower prices made them
affordable also to lower income categories of the population, which allowed Farmec to
maintain its share in the latter years of the review period.
Direct sales also made significant progress over the review period but their share remained
low due to higher prices of both sprays and roll-ons. The largest subsector, sprays, was
considered traditionally as targeting lower-income segments of the population and the high
prices of Oriflame and Avon brands led to their small share of under 5% of deodorant sales
in 2003.
Launch of new versions and brand extensions – the main move employed by
manufacturers in order to maintain or gain share
During 2002 and 2003 few new brands were launched on the market. The competitive
market led manufacturers to focus on maintaining share by advertising existing brands
with particular focus on brand extensions and new customer benefits such as 24 hours
intensive protection. The presence of perfumed body sprays also increased as deodorants
were more and more considered as a cheaper alternative for fragrances and targeted
mainly lower-income consumers due to their lower prices. Following this trend, ColgatePalmolive decided to enter the deodorant sprays market in order to fill the gap between
higher income consumers, targeted with more expensive sticks and lower-income
consumers, more price sensitive and preferring sprays. As a result, it launched in 2003 the
Lady Speed Stick spray, which benefited from a strong promotional campaign for the new
spray deodorant under the same brand umbrella that proved very successful within sticks.
Colgate-Palmolive also launched new versions of its Mennen Speed Stick, namely
Avalanche and Power of Nature, both heavily advertised.
Unilever launched its Rexona mini stick and Dove cream deodorant while Nivea launched
its Nivea for Men Anti-Transpirant roll-on. The domestic manufacturer Farmec also
launched in the summer of 2003 the You & Me line for women, men and unisex.
Table 20 Retail Sales of Deodorants by Subsector: Value 1998-2003
Leu billion
Deodorant sprays
Deodorant pumps
Deodorant roll-ons
Deodorant sticks
Deodorant creams
Deodorant wipes
Deodorants
1998
350.4
26.0
46.1
422.5
1999
441.2
33.2
51.9
526.3
2000
570.4
41.3
75.2
686.9
2001
658.6
56.2
114.3
7.5
836.6
2002
691.2
69.8
155.2
20.1
936.3
2003
733.8
83.1
191.7
25.4
1,034.0
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 21 Retail Sales of Deodorants by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Deodorant sprays
Deodorant pumps
Deodorant roll-ons
Deodorant sticks
Deodorant creams
Deodorant wipes
Deodorants
6.2
19.1
23.5
26.4
10.4
1998-03
CAGR
15.9
26.2
33.0
19.6
1998/03
TOTAL
109.4
220.2
315.5
144.8
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 22 Deodorants Company Shares 2001-2003
% retail value rsp
Company
Unilever Romania SA
Henkel Romania SRL
Beiersdorf Romania SRL
Colgate-Palmolive Romania SRL
Coty Cosmetics Romania SRL
Farmec SA
Avon Cosmetics Romania SRL
Oriflame Cosmetics Romania SRL
Procter & Gamble Marketing SRL
Mirato Nuova SpA
Gillette Romania SRL
Xavier Laurent, Parfums
Manetti & Roberts & C SpA
Romsar Cosmetics SA
Johnson & Johnson Romania SRL
Lenhart GmbH
Others
Total
2001
21.1
17.3
8.5
7.3
8.2
7.9
0.6
3.6
3.0
3.7
1.5
3.1
0.9
1.8
0.1
0.1
11.2
100.0
2002
21.4
15.3
11.1
10.0
8.7
7.9
2.5
4.1
3.7
2.9
1.8
2.9
1.1
1.7
0.2
0.1
4.5
100.0
2003
21.5
14.2
12.7
12.1
9.4
8.0
4.7
4.0
3.5
2.3
1.9
1.8
1.3
1.1
0.1
0.1
1.4
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 23 Deodorants Brand Shares 2001-2003
% retail value rsp
Brand
Rexona
Fa
Nivea Deodorant
Lady Speed Stick
Oriflame
Chanson
Secret Key
Mennen
Company
Unilever Romania SA
Henkel Romania SRL
Beiersdorf Romania SRL
Colgate-Palmolive Romania SRL
Oriflame Cosmetics Romania SRL
Coty Cosmetics Romania SRL
Procter & Gamble Marketing SRL
Colgate-Palmolive Romania SRL
2001 2002 2003
12.0 13.2 14.1
14.9 13.1 12.0
6.8
8.4
9.4
4.5
5.9
8.1
3.6
4.1
4.0
3.1
3.5
3.8
3.0
3.7
3.5
2.0
2.6
3.0
adidas
Obsesie
Athos
Dove
Impulse
Gillette Series
Nivea for Men
Xavier Laurent
Axe
Malizia
Farmec
8x4
Neutro Roberts
Bac
Pro Sport
Avon Pro Sport
Intesa
Palmolive Naturals
Prêt-à-Porter
Gerovital Plant
BU
Blue for Her
Avon Aqua
Far Away
Uomo
Avon on Duty 24 h
Johnson's pH 5.5
Alpi
Others
Total
Coty Cosmetics Romania SRL
Farmec SA
Farmec SA
Unilever Romania SA
Unilever Romania SA
Gillette Romania SRL
Beiersdorf Romania SRL
Xavier Laurent, Parfums
Unilever Romania SA
Mirato Nuova SpA
Farmec SA
Beiersdorf Romania SRL
Manetti & Roberts & C SpA
Henkel Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Mirato Nuova SpA
Colgate-Palmolive Romania SRL
Coty Cosmetics Romania SRL
Farmec SA
Romsar Cosmetics SA
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Johnson & Johnson Romania SRL
Lenhart GmbH
1.9
2.1
2.7
1.6
2.1
2.6
1.6
1.6
2.4
1.1
1.8
2.3
3.1
2.7
2.2
1.5
1.8
1.9
1.2
1.8
1.9
3.1
2.9
1.8
2.5
1.8
1.4
1.1
1.4
1.4
1.6
1.7
1.3
0.6
1.0
1.3
0.9
1.1
1.3
0.8
0.9
1.1
0.7
1.1
0.1
0.3
1.1
2.6
1.6
0.9
0.8
1.4
0.9
0.8
1.2
0.9
0.7
0.9
1.0
1.0
0.7
0.4
0.6
0.1
0.2
0.3
0.1
0.2
0.3
0.1
0.2
0.2
0.1
0.2
0.1
0.1
0.1
0.1
21.8 12.9
7.8
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 3 Deodorants New Product Developments 2002-2003
Brand name
Company
Mennen Speed Stick Power Colgateof Nature
Palmolive
Adidas Urban Spice
Coty
Dove
Lady Speed Stick
Mennen Speed Stick
Avalanche
Malizia Sport
Rexona 24h Intensive (10
g)
Fleurs de Nanette
Hawaii
Nivea Anti-Transpirant for
Men
You & Me
Unilever
ColgatePalmolive
ColgatePalmolive
Mirato Nuova
SpA
Unilever
Product type
Launch date
New version of stick October 2003
antiperspirant
Deodorant, longSeptember
lasting protection
2003
Cream deodorant
July 2003
Deodorant spray (no July 2003
alcohol)
New version of stick March 2003
antiperspirant
Body deodorant, long January 2003
lasting effect
Deodorant stick (mini) 2003
Lulien D'Irvy
Deodorant spray
Parfums
United Toiletries Deodorant spray
& Cosmetic
Beiersdorf AG
Deodorant roll-on
2003
Farmec SA
June 2002
Unisex deodorant
2003
2003
spray
Source: Company research, store checks, trade interviews
6.2 Forecast Sector Performance
Euromonitor forecasts the deodorants sector to be worth Leu 887.3 billion by 2008, to
decline by about 14.2% on 2003, in constant value terms. Perceived more and more as a
basic sector, with products used on a current basis, the low purchasing power of the
population will lead to a continuous decrease in price, with volume sales expected to
decline at a lower rate.
Competition will determine the launch of better quality products, providing longer-time
protection and requiring less daily usage, although consumption was expected to become
regular and less seasonal as it was presently. This will lead to a volume decline, but at a
lower rate than price, which will be affected by both the low purchasing power and the
strong competition.
In percentage terms, sprays will continue to concentrate the bulk of the value sales,
accounting in 2008 for about 61%. It is likely that the main demand will remain
concentrated on sprays due to the lower prices. The expected economic recovery during
the forecast period is not expected to bring an improvement in purchasing power and thus
sprays will continued to post the highest sales. However, improved purchasing power will
determine the growth of sticks, creams and roll-ons, which appeal mainly to medium and
higher income consumers. They will be more dynamic due also to their perception as
better products in terms of intensive protection but also in terms of easier usage over the
course of the day.
Table 24 Forecast Retail Sales of Deodorants by Subsector: Value 2003-2008
Leu billion
Deodorant sprays
Deodorant pumps
Deodorant roll-ons
Deodorant sticks
Deodorant creams
Deodorant wipes
Deodorants
2003
733.8
83.1
191.7
25.4
1,034.0
2004
675.8
84.9
201.7
27.0
989.4
2005
627.8
85.9
210.9
28.2
952.9
2006
593.3
86.9
219.8
28.9
928.9
2007
564.8
85.8
227.1
29.6
907.2
2008
541.1
84.4
231.8
30.0
887.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 25 Forecast Retail Sales of Deodorants by Subsector: % Value Growth
2003-2008
% constant value growth
Deodorant sprays
Deodorant pumps
Deodorant roll-ons
Deodorant sticks
Deodorant creams
Deodorant wipes
Deodorants
2003-08
CAGR
-5.9
0.3
3.9
3.4
-3.0
2003/08
TOTAL
-26.3
1.6
20.9
18.1
-14.2
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
7. HAIR CARE
7.1 Sector Performance
2003 headlines
 The trend towards self-individualisation leads to the highest dynamics for colourants and
styling agents
 The presence of locally manufactured products and strong competition leads to
significant decline of value sales
 Perceived as basic products, shampoo dominates hair care although usage frequency
reduced due to low purchasing power
 Procter & Gamble is the indisputable leader of hair care, with multinationals dominating
sales
Colourants, worth Leu 421 billion in 2003, registered the highest growth rate over the
review period due mainly to a trend for self-individualisation perceived especially in the
latter years of the review period. Ranking fifth within hair care in 1998, colourants
succeeded to retain the second position in 2000, which was maintained until the end of the
review period due to positive growth rates. The 5.3% constant value growth rate over the
review period was contrary to the overall sector decline over the review period due to the
increased usage of more expensive but better quality imported products. Colourants were
very popular in Romania and consumers gave precedence to quality over price when
making purchase decisions, so about 74% of the brands were imported in 2003 compared
to only 55% in 1999.
The colourants market became extremely competitive. Although low purchasing power was
likely to remain a problem for the large multinationals, the forecasts show growing
potential for the subsector. The trend for self –individualisation and the availability in all
channels also led to increased usage of colourants also in rural areas. Cheaper, lower
quality brands were preferred in rural areas due to lower prices. Locally manufactured
products were perceived as lower quality but they remained popular due to lower prices.
The decreasing number of hair salons, perceived as too expensive due to low purchasing
power, also contributed to the subsector's better performance within the sector.
Styling agents were perceived as sophisticated products, appealing mainly to teenagers
and young adults. They were more and more considered as part of self-individualisation
and life style and thus their awareness increased in large cities but remained reduced in
rural areas. The launch of cheaper locally manufactured products led to significant volume
growth which in turn determined the value sales to register the highest growth rate in
2003 on 2002.
The presence of locally manufactured products and strong competition leads to significant
decline of value sales
With value sales of Leu 2,072.1 billion in 2003, hair care products led the cosmetics &
toiletries market, accounting for a 16.8% share. The sector registered a decline of 50.7%
over the review period in constant value terms and also lost share within the overall C & T
market due to its main characteristic as satisfying basic needs and the dramatic decline of
the purchasing power of the population. Volume sales also declined due to reduced usage,
following increasing costs for housing and health but which were not backed by increase of
disposable incomes. As a result, usage of cheaper brands, manufactured locally, increased
especially in rural areas, where incomes were lower. As a consequence, hair care declined
in 2003 by 6.7%, in constant value terms, due to continuous perception that for a basic
product it was not worth paying more. Product availability and product awareness
remained high over the review period due to heavy advertising, enhancing new perceived
benefits but competition in this largest sector led also to the value sales decline, result of
overall price decrease.
Perceived as basic products, shampoo dominates hair care although usage frequency
reduced due to low purchasing power
With estimated sales of Leu 952.6 billion in 2003, shampoo was the largest hair care
subsector and accounted for 46.0% of value sales. It lost share due to the decreased
purchasing power of the population and diminishing frequency of hair wash. Even though
the overall offer of shampoo on the market diversified a lot, providing benefits for all kinds
of hair, demand declined due to the extreme preferences for very cheap products, low
quality, and no benefits, which accounted for significant volume sales.
The popularity of cheaper, domestically produced products resulted in negative constant
value sales growth of 59.2% for shampoo, over the review period. Additionally, shampoo
usage was much lower compared to other countries. It was traditionally considered that
washing the hair too often could damage it. However, some other impediments, such as
the lack of regular piped hot water, also caused low consumption. Intensive usage of
cheaper and longer lasting bar and household soap, especially in rural areas, also
contributed to negative growth. In most households, the traditional combinations of water
and vinegar or lemon juice were still in force. Even though most consumers reported the
presence of dandruff, hair loss, no volume, breaking ends, the current usage of shampoo
without any special added benefits retained significant volume sales.
However, in urban areas, attraction for famous brand products, providing added benefits,
heavily advertised and expensive, increased but remained low in small urban and rural
areas. In urban areas, brands that benefit from TV advertising had the strongest impact on
consumers. Consumers in urban areas, with medium and higher incomes, used
international brands and were attracted by different features. Whilst men appreciated
shampoo that fought dandruff, had good perfume and prevented greasy hair, women were
more attracted by products that gave volume, prevented breaking ends and protected
coloured hair.
2-in-1 products and conditioners were a relatively new concept in Romania at the start of
the review period and their benefits were not too relevant for consumers. After a period of
growth due to the novelty effect, their shares declined from 2001 due to their perception
as sophisticated products and not very useful for the basic purpose. However, the
perceived benefits were sufficient for stimulation usage of 2-in-1 products but not to justify
the supplementary effort to apply a conditioner.
Procter & Gamble the undisputable leader of hair care, with multinationals dominating
sales
Multinationals dominated the Romanian hair care. The top five manufacturers, Procter &
Gamble, L'Oréal, Avon, Henkel and Beiersdorf accounted together for 66.5% of value sales
in 2003. They gained significant positions due to strong advertising, added benefits and
strong availability in all retail channels.
Procter & Gamble was the leading manufacturer in 2003 with a 27.2% sector value share
and its Pantene Pro-V was the leading brand due to its presence in all the main subsectors.
Procter & Gamble held the leading position throughout the review period and its value
share increased in the latter years of the review period due to heavy advertising of its
main brands, Pantene, Head & Shoulders and Wash and Go. Head & Shoulders accounted
for a higher share than Pantene Pro-V in the largest subsector, shampoo, due to its
perception as an excellent in fighting dandruff.
With an overall share of 11.8% in 2003, L'Oréal ranked second within the hair care sector
but it dominated by far colourants, the second largest subsector. Perceived as expensive
but providing quality products, L'Oréal's share was not influenced by the drop in
purchasing power. New launches such as Garnier Nutrisse, Décor, Ferie and the presence
of consecrated brands helped L'Oréal gain share in the latter years of the review period.
Henkel and Beiersdorf registered continuous value share growth due to heavy advertising
and perceived new consumer benefits. An increased number of fragrances, natural
formulas, additional hair care attributes and lower prices compared to other multinationals'
products helped them to increase share from 2001.
Meanwhile, Unilever and Colgate-Palmolive lost share due to lower prices of their Timotei,
Organics and Palmolive brands but also declining advertising and availability. But while
Unilever launched Sunsilk, which was heavily advertised, Colgate-Palmolive stuck to its
Palmolive Naturals, cheaper and thus leading to share loss.
The presence of the Romanian manufacturer Miralon and Farmec in the top 10
manufacturers was due mainly to the launch of new products with new formulas, at lower
prices. While Miralon, Gerovital Cosmetics and Gerocossen were also local producers of
colourants, Farmec maintained its share due to the launch of Aslavital shampoo, 2-in-1
and conditioner, perceived as providing benefits for the hair.
Direct sales, represented by Avon and Oriflame, increased their share during the latter
years of the review period due to extensive activity in small urban and also rural areas,
where the presence of trained sales agents and sales on credit stimulated sales of products
perceived as premium at mass prices.
Multinationals are the champions of new launches, supported by big advertising and
promotion budgets
Main launches, which proved successful, were in the largest subsector, shampoo. It was
the case of Procter & Gamble's Clairol Herbal Essence and Unilever's Sunsilk, which had
also extensions in 2-in-1 and Conditioners. Both brands were heavily advertised on TV and
created awareness, mainly in large urban areas due to their higher prices. Alix Avien's
Diva, in colourants, and Leda in shampoo and 2-in-1, were other significant new launched
brands, but the lack of advertising did not create recognition.
Procter & Gamble launched a new version of its main H & S shampoo called Head &
Shoulders Sensitive, with a new formula, trying to induce the perception that the new
formula was milder but had the same excellent attributes in fighting dandruff.
Additionally to new launched brands, determined by acquisitions on international markets,
the main players also added new features and benefits to their well-established brands,
associated with new packaging formats. It was the case of Procter & Gamble with Pantene
new benefits, L'Oréal Elsève with its improved Color Vive version, protecting coloured hair,
but also extensions of existing brands in other subsectors such as Palmolive Natural's
launch in the Styling Agents subsector.
Colourants proved more successful in terms of new launches due mainly to its size and
positive growth rate. The launches of L'Oréal Ferie and Décor, Garnier Nutrisse, Alix Avien
Diva were the most prominent during 2002 and 2003.
Styling agents/hairsprays
Procter & Gamble retained the leadership in styling agents in 2003, and its Pantene Pro-V
was the leading brand in the same year, overtaking very closely Henkel with Drei Wetter
Taft and Wella. They were followed by Beiersdorf, with Nivea Hair Care and L'Oréal with its
Studio Expert brand. The top five ranking manufacturers accounted together in 2003 for
67% of total value sales, which indicates a high concentration of manufacturers.
Similarly to shampoo, the bulk of sales was retained by multinationals, benefiting from
excellent recognition due to heavy advertising on TV. Meanwhile, many small domestic
manufacturers accounted for a small value share due to low prices despite better volume
sales. Domestic players were significant only at regional level and awareness remained low
due to lack of advertising and promotion but were preferred by lower-income consumers,
especially teenagers. Most domestic products were in gel format as only domestic Farmec
owned technology to manufacture sprays.
Hair care: colourants
L'Oréal was the leader in colourants over the review period. It had the largest brand
portfolio within colourants and was followed by Henkel, Wella, Miralon, and Londa.
Multinationals were less affected by the drop in purchasing power due to their perceived
quality and heavy advertising campaigns.
Compared to other subsectors, domestic manufacturers accounted in 2003 for 20.5%
value share due mainly to the excellent performance of Miralon's Loncolor, perceived as
providing quality at lower prices. Domestic players Gerovital Cosmetics and Gerocossen
accounted for smaller shares and they were distributed mainly through specialists and
outdoor markets. The domestic manufacturers of colourants were mostly affected by the
decreasing purchasing power, most low income consumers switching to low quality, cheap
no-name products imported more or less legally from neighbouring countries.
Table 26 Retail Sales of Hair Care by Subsector: Value 1998-2003
Leu billion
Shampoo
2-in-1 products
Conditioners
Styling agents
Perms and relaxants
Colourants
Salon hair care
Hair care
1998
1999
2000
2001
2002
2003
574.7
667.3
682.6
899.1
891.8
952.6
126.5
165.2
203.3
210.3
223.6
233.7
110.9
137.6
177.4
205.6
203.4
199.8
99.7
105.6
137.1
158.5
188.1
229.7
23.2
23.6
28.4
32.1
34.6
35.2
98.4
136.2
206.6
294.6
370.2
421.1
1,033.3 1,235.5 1,435.4 1,800.2 1,911.7 2,072.1
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 27 Retail Sales of Hair Care by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Shampoo
2-in-1 products
Conditioners
Styling agents
Perms and relaxants
Colourants
Salon hair care
Hair care
6.8
4.5
-1.8
22.1
1.7
13.7
8.4
1998-03
CAGR
10.6
13.1
12.5
18.2
8.7
33.8
14.9
1998/03
TOTAL
65.8
84.7
80.2
130.4
52.0
328.1
100.5
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 28 Hair Care Company Shares 2001-2003
% retail value rsp excl salon haircare
Company
Procter & Gamble Marketing SRL
L'Oreal Romania SRL
Avon Cosmetics Romania SRL
Henkel Romania SRL
Beiersdorf Romania SRL
Wella Romania Eurocosmetica SRL
Unilever Romania SA
Miralon Industries SRL
Farmec SA
Colgate-Palmolive Romania SRL
Oriflame Cosmetics Romania SRL
Gerovital Cosmetics SA
2001
22.1
5.9
3.3
6.9
4.2
5.5
10.9
2.6
2.9
4.4
2.3
3.3
2002
24.1
8.6
6.5
7.1
5.1
6.0
6.8
3.4
2.8
2.8
2.1
2.7
2003
27.2
11.8
8.4
7.0
6.3
5.8
4.9
3.3
2.5
2.0
1.9
1.9
Londa Cosmetics SRL
RTC Cosmetics
Astera Romania SRL
Alix Avien Cosmetics SRL
Coral Comex Srl
Gerocossen SRL
Mirato Nuova SpA
Romira Cosmetics SRL
Revlon Inc
Ariel '91 Laboratories
Statestrong Ltd (Minuet Shelley)
Mil Mil SpA
Others
Total
1.0
1.8
1.6
1.3
0.7
0.3
0.3
0.3
0.2
0.2
0.3
17.7
100.0
1.2
1.2
1.7
0.9
0.6
0.4
0.4
0.4
0.2
0.2
0.2
14.4
100.0
1.0
1.0
1.0
0.8
0.6
0.5
0.4
0.3
0.2
0.2
0.2
0.1
10.6
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Note: Excludes salon hair care
Table 29 Hair Care Brand Shares 2001-2003
% retail value rsp excl salon haircare
Brand
Pantene Pro-V
Avon
Head & Shoulders
Nivea Hair Care
Elsève
Wash & Go
Loncolor
Palette
Palmolive Naturals
Excellence
Oriflame
Organics
Timotei
Schauma
Clairol Herbal Essences
Drei Wetter Taft
Gerovital Plant
Sunsilk
Récital
Miraj
Studio Line
Belle Color
Wellaperm
Aroma
Wella
Wella Color
Viva Color
Nutrisse
Alix Avien
Londa
Safir
Design
Rilken
Wellaton
Gerocossen
Company
2001 2002 2003
Procter & Gamble Marketing SRL
13.4 13.7 14.6
Avon Cosmetics Romania SRL
3.3
6.5
8.4
Procter & Gamble Marketing SRL
5.0
6.8
7.5
Beiersdorf Romania SRL
4.2
5.1
6.3
L'Oreal Romania SRL
1.6
3.3
4.4
Procter & Gamble Marketing SRL
3.7
3.6
3.5
Miralon Industries SRL
2.6
3.4
3.3
Henkel Romania SRL
2.0
2.8
3.0
Colgate-Palmolive Romania SRL
4.4
2.8
2.0
L'Oreal Romania SRL
1.3
1.8
2.0
Oriflame Cosmetics Romania SRL
2.3
2.1
1.9
Unilever Romania SA
7.5
4.4
1.9
Unilever Romania SA
3.3
2.4
1.8
Henkel Romania SRL
2.5
2.0
1.7
Procter & Gamble Marketing SRL
1.5
Henkel Romania SRL
1.3
1.4
1.5
Farmec SA
0.9
1.3
1.5
Unilever Romania SA
1.2
L'Oreal Romania SRL
1.1
1.2
1.2
Gerovital Cosmetics SA
2.0
1.7
1.1
L'Oreal Romania SRL
0.6
0.7
1.1
L'Oreal Romania SRL
0.7
0.9
1.0
Wella Romania Eurocosmetica SRL
1.0
1.0
1.0
Astera Romania SRL
1.6
1.7
1.0
Wella Romania Eurocosmetica SRL
1.2
1.1
1.0
Wella Romania Eurocosmetica SRL
0.7
0.9
0.9
Wella Romania Eurocosmetica SRL
0.5
0.6
0.8
L'Oreal Romania SRL
0.4
0.8
Alix Avien Cosmetics SRL
0.8
Londa Cosmetics SRL
0.7
0.9
0.7
RTC Cosmetics
1.1
0.8
0.7
Wella Romania Eurocosmetica SRL
0.4
0.7
0.7
Henkel Romania SRL
1.1
0.8
0.7
Wella Romania Eurocosmetica SRL
0.5
0.7
0.7
Gerocossen SRL
0.7
0.6
0.5
Coral
L'Oréal Décor
Wella Balsam
Féria
Zefir
Osmose
Malizia
Eolan
Colorsilk
Royal
Class
Frutti Vital
Biovital
Taft X-treme
Intesa
Eva
Londial
Geroroyal
Look Model
Vivality
Others
Total
Coral Comex Srl
L'Oreal Romania SRL
Wella Romania Eurocosmetica SRL
L'Oreal Romania SRL
Gerovital Cosmetics SA
L'Oreal Romania SRL
Mirato Nuova SpA
Farmec SA
Revlon Inc
Romira Cosmetics SRL
Ariel '91 Laboratories
Farmec SA
Gerovital Cosmetics SA
Henkel Romania SRL
Mirato Nuova SpA
Farmec SA
Londa Cosmetics SRL
Romira Cosmetics SRL
Mil Mil SpA
Wella Romania Eurocosmetica SRL
1.0
0.7
0.5
0.4
0.4
0.5
0.4
0.4
0.5
0.4
0.4
0.3
0.2
0.3
0.2
0.2
0.3
0.2
0.2
0.2
0.3
0.4
0.2
0.1
0.2
0.2
0.2
0.2
0.2
0.4
0.3
0.2
0.2
0.2
0.2
0.1
0.2
0.1
0.2
0.2
0.2
0.1
0.1
0.1
0.2
0.1
0.2
0.2
0.1
0.3
0.1
0.1
0.1
0.1
21.9 17.3 12.8
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Note: Excludes salon hair care
Summary 4 Hair Care New Product Developments 2002-2003
Brand name
Pantene Pro-V Winter
Protection
Sunsilk Aqua
Company
Procter &
Gamble
Unilever
Schwarzkopf Gliss
Henkel
Product type
Shampoo with added
benefits
Conditioner with pump
Shampoo, after
shampoo-colour
protection
Leda Herbal Care
Alix Avien
Shampoo, 2-in-1
Head & Shoulder Sensitive Procter &
Shampoo, antiGamble
dandruff, with a new
formula
Corona
Corona 94 Prod Shampoo with Henna
Srl
Palmolive Naturals
C-P
Styling agents
L'Oréal Décor, Ferie
L'Oréal
Colourants
L'Oréal Elsève Color Vive
L'Oreal
Shampoo, colour
protection
Mosquito
Viviane
Styling agents (oil)
Cosmetics
Clairol Herbal Essence
Procter &
Shampoo, 2-in-1,
Gamble
conditioner
Sunsilk
Unilever
Shampoo, 2 -in-1,
conditioner
Alix Avien Diva
Alix Avien
Colourants
Styling Gel
Spuma
Styling agents (gel)
Production Com
Launch date
November
2003
September
2003
August 2003
August 2003
August 2003
July 2003
June 2003
May 2003
May 2003
May 2003
April 2003
March 2003
February
2003
February
2003
Garnier Nutrisse
Srl
L'Oréal
Colourants
2002
Source: Company research, store checks, trade interviews
7.2 Premium versus Mass
Mass products retained the bulk of sales in Romania over the review period. L'Oréal, Wella
and Garnier Nutrisse were perceived as premium but they were classified as mass. Revlon
alone can be considered as a premium brand but its share declined to about 0.2% in 2003.
Its sales were generally not affected by low purchasing power but the presence of L'Oréal,
Garnier and Wella at lower prices led to its drop in sales during the latter years of the
review period.
Table 30 Hair Care Premium vs Mass % Analysis 1998/2003
% retail value rsp
1998
1.5
98.5
100.0
Premium
Mass
Total
2003
0.3
99.7
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
7.3 Salon Hair Care
No significant research was conducted on this subsector, considered as negligible.
Managers of Wella Romania believe that Wella brands accounted for the highest share of
sales of hair care in salons, somewhere over 70%. The figure can be confirmed by the
massive presence of Wella products in beauty salons, but most products can be also
purchased in other retail channels.
7.4 Forecast Sector Performance
Euromonitor forecasts the hair care sector to be worth Leu 2,034.0 billion by 2008, a
decline of 1.8%, in constant value terms, on 2003. Considered as a basic sector at the
beginning of the review period, it evolved towards sophistication and became and
significant sector appropriate for self-individualisation. Colourants, styling agents,
shampoo with improved benefits such as volume, colour protection and dandruff fighting
were all expected to influence changes in lifestyle and individual looks.
Styling agents were expected to be the most dynamic over the review period due to their
increased acceptance by teenagers and also adults. Positive changes in disposable incomes
of the population will affect mainly styling agents, colourants and shampoo, perceived as
providing more sophistication but being also price sensitive. Consequently, the expected
improvement of purchasing power over the forecast period is estimated to produce slight
decline of both colourants and shampoo with added benefits and a good growth rate for
styling agents.
However, the low purchasing power of the population will lead to a continuous decrease in
price, even though volume sales will grow. The new programs for piped water supply will
determine an increase in demand over the forecast period but mainly for cheap ordinary
shampoo. Colourants will continue to keep their popularity also in small urban and rural
areas but low priced brands are estimated to be more popular due to lower incomes in
these areas.
Table 31 Forecast Retail Sales of Hair Care by Subsector: Value 2003-2008
Leu billion
2003
2004
2005
2006
2007
2008
Shampoo
2-in-1 products
Conditioners
Styling agents
Perms and relaxants
Colourants
Salon hair care
Hair care
952.6
932.6
921.4
912.2
917.7
933.3
233.7
224.6
219.2
215.7
217.8
220.5
199.8
176.2
161.4
150.3
141.0
132.9
229.7
242.6
257.8
275.6
296.3
321.2
35.2
30.1
25.5
21.3
17.4
13.7
421.1
410.2
402.8
398.3
404.7
412.4
2,072.1 2,016.2 1,988.2 1,973.4 1,994.9 2,034.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 32 Forecast Retail Sales of Hair Care by Subsector: % Value Growth 20032008
% constant value growth
Shampoo
2-in-1 products
Conditioners
Styling agents
Perms and relaxants
Colourants
Salon hair care
Hair care
2003-08
CAGR
-0.4
-1.2
-7.8
6.9
-17.2
-0.4
-0.4
2003/08
TOTAL
-2.0
-5.7
-33.5
39.8
-61.0
-2.1
-1.8
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
8. COLOUR COSMETICS
8.1 Sector Performance
2003 headlines
 Lip products the most dynamic due to changes in lifestyle and search for quality
 Growth of colour cosmetics despite market decline, consequence of need for
individualisation
 Domination of lip products and eye make-up, perceived as the most appropriate for
enhancing personal image.
 Clear lead of Avon, with multinationals concentrating the bulk of sales
Lip products the most dynamic due to changes in lifestyle and search for quality
Lip products were the most dynamic over the review period and performed the highest
constant value growth rate in 2003, 21% in constant value terms on 2002. Lip products
retained also the supremacy in terms of sales in 2003 and over the review period,
accounting in 2003 for 45.7% of total value sales. This strong growth rate can be
explained by changes in lifestyle and growing interest for self-individualisation. Lip
products were perceived as one of the most representative and helpful tools for
emphasising one's own personality, which led to significant sales growth in the latter years
of the review period due mainly to better quality, longer lasting effect and protection and
increased number of current users. At the same time, most women were prepared to pay
more for these attributes, leading to the value sales growth.
Growth of colour cosmetics despite market decline, consequence of need for
individualisation
With value sales of Leu 1,681.4 billion in 2003, colour cosmetics ranked fourth within the
total cosmetics and toiletries market, accounting in the same year for a 13.6% share. Its
growth trend over the review period was a result of the need for individualisation, for
which women were prepared to pay more. The sector growth rate was supported over the
review period by lip products, which was also the largest subsector. Year 2003 witnessed a
much higher growth rate for colour cosmetics, 12.8% in constant value terms. Again, lip
products was the most dynamic subsector in the same year, perceived as very significant
for women's self image.
The first years of the review period showed a strong segmentation between heavy users of
no-name products and a small segment of loyal users of high quality, expensive brands,
that led to a decline of colour cosmetics in the same period. From 2001, a significant
change in consumers' behaviour occurred, when the increased presence of direct sales
stimulated usage of quality products also in small urban and rural areas. As a result, the
number of users of cheap products declined and a switch to better quality, branded
products was noticed, having as a result positive growth rates starting from 2001, with a
burst of 12.8% in 2003. The presence of multinationals, new launches of quality brands,
increased concern for health attributes and longer lasting effect were the main
determinants for this change.
In spite of declining purchasing power, a switch to quality rather than low price was the
determining factor in the purchase of colour cosmetics, which led to a higher growth rate
in constant value terms than in number of units sold. The presence of cheaper branded
fakes on the market and street stalls, responsible for a drop in value sales at the beginning
of the review period, diminished a lot due to new perception of the products, needing to
provide health attributes, and the change of distribution patterns. After a period of
seasonality in usage of different colour cosmetics products, a new trend towards current
daily usage was observed, leading also to the value growth.
Domination of lip products and eye make-up, perceived as the most appropriate tools for
enhancing personal image
With estimated sales of Leu 664.9 billion in 2003, lip products was the largest subsector,
followed by eye make-up. While lip products witnessed a significant growth of 13.9%, in
constant value terms, over the review period, and a higher than average 21.3% in 2003,
eye make-up registered a decline of 7.8% over the review period but started to recover in
2002, performing an 8.2% growth rate in 2003. Both sectors accounted together in 2003
for about 69% of value sales of colour products and they kept the supremacy due mainly
to the perception that lip products and eye make-up products were the main colour
cosmetics that can emphasise and individualise one's personality.
The trend towards the more expensive, famous brand names (particularly in the case of lip
products and eye make-up) developed in tandem with demand for premium products from
a small segment of high-income consumers. However, these products remained
unaffordable for the majority of Romanians, but they based on a small and loyal segment,
not affected by the purchasing power of the population. Value growth in 2003 was
stimulated by the increased appeal of medium-priced products compared to low quality,
cheap products. Improved product quality also stalled growth, as products tended to last
longer, which reduced the frequency of replacement.
Facial make-up also performed at a positive growth rate over the review period but it
accounted, together with nail products, for the smallest subsectors. Sales of facial makeup, worth Leu 259 billion in 2003, were affected by seasonality and lower awareness in
small cities and rural areas, where they were perceived as luxury items. For facial makeup, quality was very significant as they appealed mainly to higher-income consumers and
thus they recorded over the review period a positive constant value growth closer to
volume growth. The presence of skin care attributes with facial make-up contributed to the
positioning of mass brands at the upper end price mass category. According to the type of
products present on the Romanian market, foundation, powder and blushers were the
most prominent, with a smaller subsector including concealing creams and sticks.
Traditional powder, present on the market for decades, manufactured locally by Farmec SA
and Gerovital Cosmetics, was progressively replaced by foundation. Estimates indicate
similar shares for powder and foundation, with a higher growth rate for foundation, more
appreciated by active women. Both subsectors were estimated to account for more than
90% of total facial make-up sales. Sales of blushers were reduced, affected by strong
seasonality, while concealing products were in their infancy and were perceived more as
skin care products rather than facial make-up.
Lip products
No significant research was conducted on this subsector but according to all sales agents
and executives interviewed, lipstick was the main product and retained the bulk of sales. It
was also a traditional product, manufactured also for decades by the domestics Farmec
and Gerovital Cosmetics. The presence of direct selling companies Avon and Oriflame and
of multinationals L'Oréal and Coty stimulated the usage of upper-end mass products which
led to the significant growth of lip products over the review period.
Lip liners, lip pencils and lip gloss were perceived as appropriate for highlighting the effect
of lipstick. They were generally more expensive than ordinary lipstick due to the fact that
they were generally sought by higher-income users. The presence of cheap products was
reduced in comparison to lipsticks due to the same small size and low awareness within
lower income consumers. While lipstick had good demand also in small urban and rural
areas, sales of lip liners, lip pencils and lip gloss were practically negligible.
Nail products
Nail varnishes and varnish removers accounted to the bulk of sales in this subsector, which
was worth Leu 261 billion in 2003. In terms of value, varnishes retained the bulk of sales
because quality and brands became significant for most consumers in comparison to
varnish removers, for which low price was the main purchase decision. No name and
unknown brands diminished significantly over the review period within varnishes,
increasingly perceived as appropriate for enhancing one's personality, while varnish
removers were better know under generic names. Treatments were in their infancy and
appealed mainly to high-income consumers. Awareness was very low and penetration in
small urban and rural areas was negligible.
Clear lead of Avon, with multinationals concentrating the bulk of sales
Direct sales made significant progress after 1996, when the establishment of the large
multinationals Oriflame and Avon helped this channel to gain value share. The two
companies took 47% of value sales in 2003. The channel proved the most dynamic over
the review period due mainly to the perception of Oriflame and Avon products as premium
at mass prices. The lack of significant advertising in this sector created room for rapid
development of direct sales, promoted directly on site and providing purchasing time
saving.
Avon established operations in Romania in 1996 and value sales increased rapidly to
account for the leadership of colour cosmetics in 2002. Avon improved its share in 2003
due to advertising on TV and fixed sales points in large department stores and shopping
centres. This was an interesting strategy for Avon, which based its growth also on
traditional distribution channels such as department stores.
Oriflame was the leading brand in 2001, following aggressive development with quality
products. Its value share was also supported by higher prices, which were accepted by
consumers due to the better quality and perception as premium products at mass prices.
However, Oriflame lost ground from 2002 due to aggressive campaigns led by Avon, which
included also advertising and stands in malls, department stores and shopping centres.
Both companies showed increased interest in attracting consumers in small urban and
rural areas, which led to their significant growth and share gain.
The low purchasing power and undeveloped distribution channels did not encourage the
launch of new products and brands in the mentioned areas but direct selling companies
took advantage of the endemic shortage of good quality products and thus made good
business by promoting their products, specialist advice and sales on credit. But despite this
growing activity, which led to an impressive growth of direct sales, lifestyles remained
largely traditional in small cities and rural areas, where sales of cheap, no-name products
prevailed, especially nail, eye and lip products.
L'Oréal and Coty challenged Oriflame, which lost share in the latter years of the review
period due to more aggressive campaigns carried by Avon. L'Oréal gained a leading
position in 2001, as third largest manufacturer. Its position improved after the launch of
Maybelline products, accepted by the market very soon after the launch. Coty, which
registered significant growth in the first years of the review period started to loose share in
the coming years due to diminished advertising and reduced availability of its main brands
Margaret Astor, Rimmel and Miss Sporty.
Ruby Rose, Seventeen, Max Factor and Revlon were significant brands in this fragmented
sector. Romanian manufacturer Farmec and Gerovital Cosmetics ranked in the top ten
manufacturers due to quality products at lower prices. As traditional colour cosmetics
producer, they invested in manufacturing facilities and improved product lines, targeting
mainly lower income segments of the population.
Table 33 Retail Sales of Colour Cosmetics by Subsector: Value 1998-2003
Leu billion
Facial make-up
Eye make-up
Lip products
Nail products
Colour cosmetics
1998
61.9
132.3
143.6
65.2
403.0
1999
91.1
184.1
212.9
91.4
579.5
2000
130.7
254.5
280.4
128.8
794.4
2001
169.6
319.6
349.7
165.1
1,004.0
2002
213.3
394.6
471.7
203.2
1,282.8
2003
259.2
495.9
664.9
261.4
1,681.4
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 34 Retail Sales of Colour Cosmetics by Subsector: % Value Growth 19982003
% current value growth
2002/03
Facial make-up
Eye make-up
Lip products
Nail products
Colour cosmetics
21.5
25.7
41.0
28.6
31.1
1998-03
CAGR
33.2
30.2
35.9
32.0
33.1
1998/03
TOTAL
318.7
274.8
363.0
300.9
317.2
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 35 Colour Cosmetics Company Shares 2001-2003
% retail value rsp
Company
Avon Cosmetics Romania SRL
Oriflame Cosmetics Romania SRL
L'Oreal Romania SRL
Coty Cosmetics Romania SRL
Procter & Gamble Marketing SRL
Ruby Rose Co
Farmec SA
2001
17.6
21.7
14.1
14.8
2.9
5.3
5.1
2002
26.0
19.5
15.5
12.6
3.8
4.3
3.0
2003
30.2
17.0
16.9
10.3
4.4
3.7
2.4
Hellenica SA
Gerovital Cosmetics SA
Alix Avien Cosmetics SRL
Constance Carroll Romania SRL
Revlon Inc
Beiersdorf Romania SRL
Others
Total
1.5
3.1
1.5
1.0
11.3
100.0
1.3
1.8
0.5
1.1
0.5
0.2
9.8
100.0
1.2
1.1
0.8
0.6
0.3
0.2
10.9
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 36 Colour Cosmetics Brand Shares 2001-2003
% retail value rsp
Brand
Oriflame
Avon Color
Avon
L'Oréal Perfection
Perfect Wear
Maybelline
Max Factor
Margaret Astor
Ruby Rose
Rimmel
Miss Sporty
Farmec
Avon Nail Experts
Arabian Glow
Seventeen
Alix Avien
Constance Carroll
Magic
Revlon
Nivea Beauté
Lancôme
Cutex
Egreta
Lady
Catifelin
Abela
Others
Total
Company
Oriflame Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
L'Oreal Romania SRL
Avon Cosmetics Romania SRL
L'Oreal Romania SRL
Procter & Gamble Marketing SRL
Coty Cosmetics Romania SRL
Ruby Rose Co
Coty Cosmetics Romania SRL
Coty Cosmetics Romania SRL
Farmec SA
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Hellenica SA
Alix Avien Cosmetics SRL
Constance Carroll Romania SRL
Gerovital Cosmetics SA
Revlon Inc
Beiersdorf Romania SRL
L'Oreal Romania SRL
Coty Cosmetics Romania SRL
Gerovital Cosmetics SA
Gerovital Cosmetics SA
Gerovital Cosmetics SA
Gerovital Cosmetics SA
2001 2002 2003
21.7 19.5 17.0
4.2
7.0
9.5
4.6
7.5
7.8
6.3
7.1
7.1
4.3
6.1
7.0
5.2
6.2
7.0
2.9
3.8
4.4
5.3
4.5
4.1
5.3
4.3
3.7
3.8
4.0
3.3
5.0
3.6
2.5
5.1
3.0
2.4
1.0
1.9
0.7
1.4
1.5
1.5
1.3
1.2
0.5
0.8
1.5
1.1
0.6
1.0
0.8
0.4
1.0
0.5
0.3
0.2
0.2
0.3
0.2
0.2
0.2
0.1
0.1
0.3
0.2
0.1
0.2
0.1
0.1
0.2
0.1
0.1
0.2
0.1
0.1
19.2 15.7 16.7
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 5 Colour Cosmetics New Product Developments 2002-2003
Brand name
Veronica Feltro
L'Oréal Invincible
Company
Product type
Viviane Cosmetics Nail products
L'Oréal
Lip colour, long
lasting
Launch date
March 2003
August 2003
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
8.2 Premium versus Mass
In regards to quality/price ratio, premium product purchasers represented a small but very
loyal segment. Due to low purchasing power, premium products were perceived as 'super
luxury'. The segment targeted was small and premium products registered low but positive
growth over the review period. Quality, not price, was very significant for the growth of
this segment, with consumers highly attracted by luxury brand names. Estée Lauder, Nina
Ricci, Chanel and Yves St. Laurent were the main premium manufacturers present in
colour cosmetics.
The mass market was considerably larger and included Avon, Oriflame, L'Oréal, Coty and
Procter & Gamble, which, even perceived as premium, were sold at lower prices, making
them affordable to larger income categories of the population. Other locally manufactured
brands and imports accounted for larger sales volume but the value share remained low
due to lower selling prices.
Table 37 Colour Cosmetics Premium vs Mass Analysis 1998/2003
% retail value rsp
1998
6.0
94.0
100.0
Premium
Mass
Total
2003
7.0
93.0
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 38 Premium Colour Cosmetics Brand Rankings 2003
Rankings
Brand
Lancôme
Company
L'Oreal Romania SRL
2003
1.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
8.3 Forecast Sector Performance
Euromonitor forecasts the colour cosmetics sector to be worth Leu 2,206.9 billion by 2008,
up by 31.3% on 2003. Positive changes in the disposable incomes of the population will
affect the sector, perceived as more sophisticated but less price sensitive, with increased
appeal for quality and customer benefits. The perception of the products in the sector as
appropriate for the improvement of self-image is estimated to lead to this significant
growth rate.
The expected integration of Romania into the EU by 2007 is forecast to determine
disposable income growth which will create a growing demand for better quality, more
expensive colour cosmetics, providing added benefits such as protection and long-lasting
effect.
Lip products will continued to be the most dynamic over the forecast period and will also
concentrate the main share of value sales due to its perception as the best product to
emphasise personality.
The increasing demand for fashion and sophisticated products will stimulate growth of
quality, more expensive products. Premium products will continue to target upper-income
consumers and will retain their share. Consequently, the forecast real growth will be
determined more by growth in value terms rather than in volume terms.
Table 39 Forecast Retail Sales of Colour Cosmetics by Subsector: Value 20032008
Leu billion
Facial make-up
Eye make-up
Lip products
Nail products
Colour cosmetics
2003
2004
2005
2006
2007
2008
259.2
269.8
280.4
290.2
298.6
306.0
495.9
528.6
551.4
561.3
569.1
575.4
664.9
764.0
838.1
906.0
962.1 1,008.3
261.4
281.8
292.8
301.9
309.7
317.1
1,681.4 1,844.2 1,962.6 2,059.3 2,139.6 2,206.9
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 40 Forecast Retail Sales of Colour Cosmetics by Subsector: % Value Growth
2003-2008
% constant value growth
Facial make-up
Eye make-up
Lip products
Nail products
Colour cosmetics
2003-08
CAGR
3.4
3.0
8.7
3.9
5.6
2003/08
TOTAL
18.1
16.0
51.6
21.3
31.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
9. MEN'S GROOMING PRODUCTS
9.1 Sector Performance
2003 headlines
 The emerging men's post shave and men's bath and shower products the most dynamic
but remain niche
 Increased usage of cheaper products leads to overall value decline although volume
sales register significant growth
 Men's deodorants lead men's grooming products but registers significant decline due to
low purchasing power and strong competition
 Low purchasing power and competition lead to decline of the leading men's subsector,
deodorants, and establishes men's preshave and men's razors and blades
 Multinationals keep the supremacy due to lower prices, new launches and strong
distribution networks
The emerging men's post shave and men's bath and shower the most dynamic but remain
niche
Both men's post shave and men's bath and shower were new concepts on the Romanian
men's grooming products market. They did not have enough history over the review period
in order to record a constant value growth rate but they posted significant growth rates in
2003 in comparison with the well established men's pre-shave, men's razors and blades
and men's deodorants, which all declined over the review period and recorded only low
one digit constant growth rates in 2003. As a whole, men's grooming products was worth
Leu 571 billion in value sales in 2003.
With a 20.1% constant value growth rate in 2003, men's post-shave was the most
dynamic subsector. Relatively new on the market, the new concept emerged in 2000 but
awareness remained low due mainly to higher prices compared to traditional fragrances.
They were perceived as premium products mainly due to higher prices and low availability
and awareness. However, men's post shave became increasingly popular among high
income consumers in large urban areas. Launch of Nivea Balm and other brands of direct
selling companies created room for rapid growth although the perception among most
users was that alcohol-based fragrances were better in terms of protection after shaving
and provided a broader choice in terms of fragrance. Advertising of Nivea Balm tried to
persuade men that the alcohol-free post-shave products offered excellent moisturising
attributes and provide also good scent.
Men's bath and shower was the second most dynamic in 2003, with a constant value
growth rate of 18%. It started from a very low base and continued to retain very low
awareness although availability increased in all channels, prices being about similar to
other shower products. Starting from a very low base, the subsector performed well due
mainly to changes in consumption habits and lifestyles, showers being more largely
accepted by men than relaxing baths. However, its size, Leu 2.9 billion, remained small
due to the habit of using the same product by the whole family. This can be explained by
the low purchasing power which limits the purchase of different products for the same
purpose by males and females. This was also the case of shampoo, where men used
almost exclusively the same shampoo as the rest of family. This perception of shampoo by
men led to negligible sales of hair care products over the review period.
Men's skin care was practically absent from the market. There was very low interest from
men aside from specific skin care and hair care products. Traditional 'macho' values
amongst most Romanian men can be a break in the growth of this category.
Increased usage of cheaper products leads to overall value decline although volume sales
perform at significant growth rate
With current value sales of Leu 571.4 billion in 2003, men's grooming products accounted
for a small 4.6% share within the cosmetics and toiletries market. Although volume sales
performed excellent growth rates, constant value sales declined by 13.7% over the review
period showing an overall price decline, consequence of strong competition and the
preference for cheaper brands. Most Romanians considered men's grooming products as
necessities so they did not consider that paying more for ordinary products was
worthwhile. This perception was stronger in small cities and rural areas but was also valid
for medium and lower-income consumers in large cities.
Low purchasing power was also a factor that negatively affected the development of the
sector. In men's pre-shave, it stimulated the increased usage of cream compared to foams
and gels, perceived as cheaper but providing at least the same moisturising effect as
foams and gels. Additionally, promotional expenditure was generally in accordance to sales
which in this case were reduced also due to the small size of the market but also due to
low interest for men's products when they had common usage with women, such as
deodorants, which held the largest share over the review period.
Low purchasing power and competition leads to decline of leading men's deodorants and
establishes men's pre-shave and men's razors and blades
With estimated sales of Leu 277.9 billion in 2003, men's deodorants was the largest
subsector and accounted for 48.6% of men's grooming sales. Meanwhile, it registered the
highest constant value decline rate, 25%, over the review period although volume sales
increased over the same period. The explanation stands in the fact that, perceived by men
as a basic product, availability and product awareness increased over the review period
and competition too, which led to an overall price decline. At the same time, advertising
expenditure on men's deodorants remained low, which could not create significant brand
recognition to lower income consumers.
Men versions of established brands were significant new launches on the deodorant sector
over the review period. The new trend towards increased usage of anti-perspirants for men
determined a change in perception and the reduction of seasonality, which in turn led to
volume growth.
The decline of razors & blades was attributable mainly to the increased usage of disposable
razors and the reduction of more sophisticated new razors. The high prices for reserves
made razors loose share, being replaced soon by disposable razors, cheaper and more
available in all retail channels.
Pre-shave products declined over the review period by about 7%, in constant value terms,
due mainly to increased usage of cheaper creams. A switch from traditional creams to
more expensive gels and foams was observed only in large urban areas, where in spite of
the economic depression, usage increased amongst young people and urban adults.
Multinationals keep the supremacy due to lower prices, new launches and strong
distribution networks
The sector was concentrated in the hands of a few multinationals, accounting for the bulk
of the volume and value sales in 2003. The top six manufacturers, namely Gillette, Bic,
Unilever, Colgate-Palmolive, Beiersdorf and Henkel accounted together for more than 78%
of value sales. Deodorants and post-shave enjoyed the highest media advertising but at a
decreasing rate. The large multinationals Gillette, Unilever, Colgate-Palmolive, Beiersdorf
dominated men's grooming advertising.
Gillette Romania held the leading position in 2003 by a very comfortable margin. It
accounted for the leading position with its Gillette brand in men's pre-shave, men's razors
and blades and men's post-shave and had also good shares in the largest men's subsector,
deodorants. Gillette Romania succeeded to maintain its position due to higher prices and
the perception of excellent quality products at mass prices. It also benefited from its brand
recognition for decades. It was mainly sold in department stores but also outdoor markets,
which represented the most significant retail channels in 2003. Although department
stores lost some ground over the review period, they remained the most significant
distribution channel in 2003 due to the fact that the presence of the most aggressive direct
selling companies was not so prominent in this sector.
Bic by Bic SA held the second leading position due to its significant share in men's razors
and blades, a result of lower prices and wide availability. It was also responsible for Astor,
another leading brand.
Henkel, with Fa Men, Unilever with Rexona and Denim, Beiersdorf with Nivea and Farmec
with Athos and Bob were also main players on the sector due mainly to their active
presence in the men's deodorant subsector.
During 2002 and 2003 few new brands were launched on the market. The strong
manufacturers on the market preferred to add new features and benefits to their wellestablished brands and to increase their presence in other sectors of the market. The main
launches were represented by the 24 hours intensive control of deodorants. Launched by
the main players in the sector at affordable prices, they accounted for the most successful
new versions: Mennen Speed Stick Avalanche, Rexona for Men Anti-transpirant. Mennen
speed Stick avalanche 2-in-1 was also a significant new launch in men's pre-shave. Razors
also accounted for significant launches of Astor and Bic twin blades.
Razors and blades
There was no research concerning the split between razors and blades. While disposable
razors were preferred especially by young people, the majority of the older generation
tended to stick to traditional blades.
Usage of electric razors was limited to very high-income categories of the population due
to their price but also to the lack of tradition in their usage. Demand for electric razors is
expected to remain low in the future and will not influence sales of traditional razors and
blades. There was no official data concerning imports and manufacturing of electric razors.
Table 41 Retail Sales of Men's Grooming Products by Subsector: Value 1998-2003
Leu billion
1998
1999
2000
2001
2002
2003
Men's
Men's
Men's
Men's
Men's
Men's
Men's
Men's
pre-shave
razors and blades
post-shave
bath and shower
deodorants
hair care
skin care
grooming products
27.2
44.3
91.3
162.8
32.5
59.8
135.8
228.1
46.9
84.4
1.0
0.6
168.3
301.3
66.7
116.7
3.5
1.3
198.2
386.4
85.3
148.1
9.6
2.1
233.4
478.5
102.9
174.3
13.4
2.9
277.9
571.4
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 42 Retail Sales of Men's Grooming Products by Subsector: % Value Growth
1998-2003
% current value growth
2002/03
Men's
Men's
Men's
Men's
Men's
Men's
Men's
Men's
pre-shave
razors and blades
post-shave
bath and shower
deodorants
hair care
skin care
grooming products
20.6
17.7
39.6
38.1
19.1
19.4
1998-03
CAGR
30.5
31.5
24.9
28.5
1998/03
TOTAL
278.2
293.2
204.5
251.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 43 Men's Grooming Products Company Shares 2001-2003
% retail value rsp
Company
Gillette Romania SRL
Bic (Romania) Marketing & Distribution SRL
Unilever Romania SA
Colgate-Palmolive Romania SRL
Beiersdorf Romania SRL
Henkel Romania SRL
Coty Cosmetics Romania SRL
Farmec SA
Mirato Nuova SpA
Manetti & Roberts & C SpA
Avon Cosmetics Romania SRL
Oriflame Cosmetics Romania SRL
Pfizer Inc
Gerovital Cosmetics SA
Romira Cosmetics SRL
Others
Total
2001
20.4
13.3
13.8
11.2
6.4
9.1
3.6
2.1
2.3
1.6
0.2
0.7
2.4
0.3
0.5
12.1
100.0
2002
23.7
14.1
13.2
10.9
8.0
7.6
3.0
2.7
2.6
1.6
0.6
0.9
0.9
0.3
0.4
9.4
100.0
2003
25.2
14.2
13.3
10.1
8.9
6.0
3.0
2.9
1.9
1.5
1.0
0.8
0.5
0.2
0.2
10.2
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 44 Men's Grooming Products Brand Shares 2001-2003
% retail value rsp
Brand
Company
2001 2002 2003
Gillette
Bic
Gillette Series
Nivea for Men
Rexona
Fa Men
Mennen
Palmolive for Men
Axe
Denim
Astor
Athos
Crossmen
D'Amaris
Malizia
Neutro Roberts
Cobalt
Brut
Oriflame
Schick
8x4
Uomo
Intesa pour Homme
Friktion
Hattric
Maxim
Blue for Him
Wilkinson Sword
Scipio
Avon Pro Sport
Estes
Others
Total
Gillette Romania SRL
Bic (Romania) Marketing &
Distribution SRL
Gillette Romania SRL
Beiersdorf Romania SRL
Unilever Romania SA
Henkel Romania SRL
Colgate-Palmolive Romania SRL
Colgate-Palmolive Romania SRL
Unilever Romania SA
Unilever Romania SA
Bic (Romania) Marketing &
Distribution SRL
Farmec SA
Coty Cosmetics Romania SRL
Colgate-Palmolive Romania SRL
Mirato Nuova SpA
Manetti & Roberts & C SpA
Coty Cosmetics Romania SRL
Unilever Romania SA
Oriflame Cosmetics Romania SRL
Pfizer Inc
Beiersdorf Romania SRL
Avon Cosmetics Romania SRL
Mirato Nuova SpA
Avon Cosmetics Romania SRL
Henkel Romania SRL
Romira Cosmetics SRL
Avon Cosmetics Romania SRL
Pfizer Inc
Gerovital Cosmetics SA
Avon Cosmetics Romania SRL
Gerovital Cosmetics SA
13.9
10.3
14.9
12.0
14.4
12.0
6.5
6.0
5.0
8.9
4.5
4.3
5.7
2.4
3.0
8.9
7.5
5.8
7.4
5.3
3.7
3.7
2.9
2.1
10.8
8.6
6.7
5.7
5.5
3.0
3.0
2.6
2.3
1.3
1.7
2.1
1.7
1.5
1.6
2.4
2.0
1.5
1.9
2.2
1.5
1.6
1.6
1.5
1.9
1.6
1.4
0.7
0.9
1.0
0.7
0.9
0.8
1.5
0.6
0.4
0.4
0.4
0.4
0.1
0.3
0.4
0.4
0.4
0.4
0.1
0.1
0.2
0.2
0.2
0.2
0.5
0.4
0.2
0.1
0.2
0.2
0.9
0.2
0.2
0.2
0.2
0.1
0.0
0.0
0.1
0.2
0.1
0.1
12.9 10.4 11.1
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 6 Men's Grooming Products New Product Developments 2002-2003
Brand name
Company
Product type
Nivea for Men
Mennen Avalanche 2-in-1
Gillette Series
Beiersdorf
ColgatePalmolive
Romania
Gillette
Denim
Astor Twin
Unilever
Bic
Bic Twin
Bic
Glacier Face Wash
Oriflame
Roll on, anti-transpirant
Men's grooming, shave
foam &cream, with
vitamin E
Men's pre shave, no
alcohol
Shaving Foam
New disposable razor,
with twin blades
Disposable razor, with
two blades
Skin care product for
men
Launch
date
July 2003
July 2003
January
2003
May 2002
May 2002
February
2002
2002
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
9.2 Forecast Sector Performance
Euromonitor expects men's grooming products to be worth Leu 643.7 billion in 2008,
which represents an expected growth of 12.7% in constant value terms on 2003.
Perceived more and more as basic products, used on a daily basis, the low purchasing
power of the population will lead to a continuous decrease in prices, while volume sales will
grow. Price is expected to be the main factor in the buying decision.
Positive changes in disposable income will have a lesser impact, as men's grooming
products will be perceived as satisfying basic needs. Changes in lifestyle, the increased
usage of more sophisticated pre-shave products, the presence of new products such as
anti-perspirants and anti-transpirants and new added-benefit bath and shower products
which help sales to grow. New product launches will stimulate demand as long as the
quality/price ratio appeals to the majority of potential customers. The leading
manufacturers Gillette, Bic, Unilever and Colgate-Palmolive are expected to improve their
shares due to significant presence in the largest subsectors, deodorants, razors and blades
and men's pre shave.
Smaller subsectors, post-shave and bath and shower will continue to be the most dynamic
over the forecast period due to their perception as better products in terms of more
intensive protection, moisturising and new scent effect. Men's post shave is expected to be
the most dynamic due to the increased acceptance of the concept amongst Romanian
consumers although competition from fragrances will remain very strong.
In percentage terms, men's deodorants will account for more than 50% of total value
sales. It is likely that the main demand will remain concentrated on deodorants, as they
will provide also long-lasting protection. Gel as a new concept for men's grooming – preshave, post shave and deodorants- is expected to improve its share over the forecast
period.
Table 45 Forecast Retail Sales of Men's Grooming Products by Subsector: Value
2003-2008
Leu billion
Men's
Men's
Men's
Men's
Men's
Men's
Men's
Men's
pre-shave
razors and blades
post-shave
bath and shower
deodorants
hair care
skin care
grooming products
2003
102.9
174.3
13.4
2.9
277.9
571.4
2004
106.5
176.2
15.7
3.3
286.8
588.5
2005
109.1
175.0
17.8
3.7
298.0
603.6
2006
111.1
172.7
19.7
4.1
309.9
617.5
2007
112.6
168.6
21.1
4.4
323.8
630.4
2008
113.8
163.7
22.3
4.6
339.4
643.7
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 46 Forecast Retail Sales of Men's Grooming Products by Subsector: %
Value Growth 2003-2008
% constant value growth
Men's
Men's
Men's
Men's
Men's
pre-shave
razors and blades
post-shave
bath and shower
deodorants
2003-08
CAGR
2.0
-1.2
10.7
9.5
4.1
2003/08
TOTAL
10.6
-6.1
66.3
57.5
22.1
Men's hair care
Men's skin care
Men's grooming products
2.4
12.7
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
10. ORAL HYGIENE
10.1 Sector Performance
2003 headlines
 Tooth paste continues to retain the highest share but registers value decline due to
consumption reduction
 As a consequence of low purchasing power, sales of oral hygiene products decline,
driven by the perception of satisfying a basic need
 Romanian consumers remain reluctant to accept emerging concepts, perceived as luxury
 Undisputable leadership of multinationals Colgate-Palmolive and Procter & Gamble
Tooth paste continues to retain the highest share but registers value decline due to price
reduction
With estimated sales of Leu 11,479.1 billion in 2003, toothpaste dominated by far oral
hygiene, accounting in the same year for a 91.9% value share. The presence of the large
multinational Colgate-Palmolive, which manufactured locally some versions of its Colgate
brand, was the main determinant for the launch onto the market of quality products at
lower prices.
Due to its daily usage, tooth paste registered the lowest decline rate over the review
period within the whole sector. The constant value decline of toothpaste, by 23%, over the
review period reflected more a decline in price than a decline in volume sales. However,
volume sales also decreased due to the low purchasing power of the population and
diminished consumption. Cheap products appealed mainly to low-income consumers and
to those attracted more by low prices than by benefits. For many consumers, taste
remained the main sought after attribute. Added benefits appealed mainly to higher
income, better-educated consumers, in large urban areas. Advertising remained a tool for
new launches in order to create awareness for more sophisticated versions. Most
advertising focused on new added benefits, growing herbal and vitamins content, and 3 in
1 versions and new packaging, but substitution of cheaper brands was limited by the low
interest in purchasing oral hygiene products.
Types of toothpaste
Ordinary cheap brands of toothpaste, fighting cavities, were the most successful. Despite
their higher share, new versions with herbal content gained significant recognition and
share.
Colgate-Palmolive dominated toothpaste in 2003, with a 46% share of the oral hygiene
market. Its brands Colgate was the leading toothpaste and Super Cristal benefited from
traditional usage before the 90's, when it was manufactured by Norvea Brasov.
Manufactured now by Colgate-Palmolive at Norvea, it was targeted to lower income
segments of the population, benefiting from its brand name, availability and high
penetration rate in rural areas. It benefited also from a new launch, Super Cristal Herbal,
marketing its natural content.
Procter & Gamble's Blend-a-Med was also the champion of new launches. Blend-a-Med
Complete +White was a response to the new launch of Colgate-Palmolive's Colgate Total +
Whitening and they also launched Mineral Action, Dual Action White and Complete Herbal,
which led to share gain.
SmithKline's Aquafresh changed its positioning as a premium expensive brand in 2003,
when it launched Aquafresh Family, larger 75 ml toothpaste packaging, targeting the
whole family with lower prices. It also launched Aquafresh Total Care, heavily advertised
on TV and expected to compete against Colgate-Palmolive' Colgate Total and Procter &
Gamble's Blend-a-Med.
As a consequence of low purchasing power, sales of oral hygiene products decline, driven
by their perception as satisfying a basic need
With value sales of Leu 1,609.3 billion in 2003, oral hygiene products was perceived as a
basic sector, where it was not worthwhile to paying more for daily usage products. The
sector registered a decline of 28.1% over the review period, in constant value terms, and
also lost share due to the dramatic drop in the purchasing power of the population.
The oral hygiene sector was dominated by sales of toothpaste and toothbrushes over the
review period, with several sectors within oral hygiene either negligible or not present at
all. Accounting for the bulk of sales, toothpaste dictated the sector evolution over the
review period. Even though most consumers did not ignore the need for oral hygiene,
disposable incomes declined by a high rate, which led to diminished usage. As a
consequence, most households used the same toothpaste brand for the whole family, sales
of products for kids being very reduced and loyalty for a brand was reduced, price being
the main determinant for the purchase decision. The same low purchasing power was a
determinant for the low usage of large packages, when the lower expenditure for one
purchase was often preferred to time saving.
Toothbrushes accounted for the second largest subsector. The significant drop in sales for
this second largest subsector was determined by the economic depression and the
decrease in purchasing power. The market was expected to decline further, chiefly in
volume terms rather than value terms. Despite dentists' advice not to exceed three
months' use for a toothbrush, in many cases consumers ignored this advice and regular
replacement of a toothbrush was considered a luxury. The high price of quality
toothbrushes made them unaffordable for regular replacement, so low quality but cheap
products were preferred.
Sales of power brushes remained negligible over the review period. Colgate-Palmolive
launched Colgate Motion and Colgate Actibrush but the attempt proved unsuccessful due
to its perception as an expensive luxury product, limited availability to large urban areas
and lack of awareness.
Romanian consumers remain reluctant to accept emerging concepts, percived as luxury
Mouthwashes/dental rinses registered the highest decline rate over the review period.
Brand awareness of this subsector was very low and it accounted for less than 1.0% of
total sector value sales. Brand awareness for mouthwashes, however, increased over the
review period but they registered significant decline rates in the latter years of the review
period due to their perception as luxury products and high selling prices.
The concept of mouth fresheners was new to Romanian consumers over the review period.
Consequently, product awareness was virtually absent by the end of the review period
and, with no advertising support, products remained unfamiliar to the majority of the
population, which was still used to receiving this type of product from their dentists.
Dental floss was also a new concept for the Romanian. Most Romanians still used
toothpicks in place of dental floss, which had negligible awareness. Its high price would not
be an impediment to emergence but its presence on the shelves passed unnoticed because
the purpose was practically unknown to most consumers. For the same reason, retail sales
of denture care remained non-existent in Romania over the review period.
Mouthwash/dental rinses
Sales of mouthwash/dental rinses were very low due to the lack of awareness and
availability but also due to low level of education. Aquafresh 3-in-1 was the main brand
present on the market. It stayed on the market after the withdrawn of other brands
present in the first years of the review period due to low perceived profits.
Oral-B maintained its share due to its presence in the more sophisticated channels such as
hypermarkets/ supermarkets. The launch of Colgate-Palmolive's Colgate was expected to
compete against the leaders but the low size of the market and lack of awareness cannot
provide good estimation of the future development of the category, highly influenced by
education.
Undisputable leadership of multinationals Colgate-Palmolive and Procter & Gamble
Colgate-Palmolive dominated by far the oral hygiene sector in 2003 and its brand Colgate
was the leading brand in the same year. Colgate-Palmolive also led by far toothbrushes
due to lower prices and strong availability in all retail channels. Its offer consisted of a high
number of versions, ranging from low to high prices. Manufacturing locally at Norvea
Brasov, Colgate-Palmolive had the competitive advantage of quality at lower prices for its
most common brands. It also launched in 2003 Colgate mouthwash, which gained share
soon after the launch due to the small size of the category and its increased availability.
Procter & Gamble's Blend-a-Med increased its share due to the increased number of
versions, increased availability and strong advertising. Very strong in the largest subsector
toothpaste, it had a reduced presence in the second largest subsector, toothbrushes.
SmithKline's Aquafresh accounted for significant share over the review period, advertised
as a complex of benefits for the whole mouth care not just toothpaste. It had also a
noticeable share in toothbrushes and led the small subsector mouthwash with its
Aquafresh 3-in-1 brand. Astera also gained share in the last year due to the aggressive
penetration in the low margin distribution channels with its 100 ml packaging and lowerpriced toothbrushes.
Table 47 Retail Sales of Oral Hygiene by Subsector: Value 1998-2003
Leu billion
Toothpaste
Manual toothbrushes
Mouthwashes/dental
rinses
Denture care
Mouth fresheners
Dental floss
Oral hygiene
1998
475.5
66.4
8.5
1999
667.5
72.8
8.5
2000
956.1
96.6
7.3
2001
1,255.9
108.1
7.0
2002
1,418.1
114.7
8.2
2003
1,479.1
120.7
9.5
550.4
748.7
1,060.1
1,371.0
1,541.0
1,609.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 48 Retail Sales of Oral Hygiene by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Toothpaste
Manual toothbrushes
Mouthwashes/dental rinses
Denture care
Mouth fresheners
Dental floss
Oral hygiene
4.3
5.2
15.9
4.4
1998-03
CAGR
25.5
12.7
2.2
23.9
1998/03
TOTAL
211.1
81.7
11.6
192.4
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 49 Oral Hygiene Company Shares 2001-2003
% retail value rsp
Company
Colgate-Palmolive Romania SRL
Procter & Gamble Marketing SRL
GlaxoSmithKline SRL
Astera Romania SRL
Henkel Romania SRL
Unilever Romania SA
Block Drug Co Inc
Gillette Romania SRL
Ferfelis Line SA
Gerovital Cosmetics SA
Others
Total
2001
45.8
23.6
8.5
3.1
1.2
5.6
0.6
0.3
0.5
0.5
10.2
100.0
2002
47.4
27.0
6.2
3.7
2.2
2.9
1.0
0.6
0.7
0.8
7.4
100.0
2003
46.6
29.8
7.2
4.8
1.6
1.3
0.6
0.6
0.5
0.4
6.7
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 50 Oral Hygiene Brand Shares 2001-2003
% retail value rsp
Brand
Colgate
Blend-a-Med
Super Cristal
Aquafresh
Astera
Vademecum
Maxam
Sensodyne
Oral-B
Dental Academy
Gerovital
Others
Total
Company
Colgate-Palmolive Romania SRL
Procter & Gamble Marketing SRL
Colgate-Palmolive Romania SRL
GlaxoSmithKline SRL
Astera Romania SRL
Henkel Romania SRL
Unilever Romania SA
Block Drug Co Inc
Gillette Romania SRL
Ferfelis Line SA
Gerovital Cosmetics SA
2001 2002 2003
36.3 38.1 37.6
23.6 27.0 29.8
9.4
9.3
9.0
8.5
6.2
7.2
3.1
3.7
4.8
1.2
2.2
1.6
1.8
1.2
0.8
0.6
1.0
0.6
0.3
0.6
0.6
0.5
0.7
0.5
0.5
0.8
0.4
13.9
9.2
7.2
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 7 Oral Hygiene New Product Developments 2002-2003
Brand name
Company
Product type
Aquafresh Family
Super Cristal Herbal
Colgate Total + Whitening
Blend-a-med
Complete+White
Blend-a-med Complete+
Herbal
Blend-a-med Mineral
Action
Blend-a-med Dual Action
GlaxoSmithKline
Colgate-Palmolive
Colgate-Palmolive
Procter & Gamble
Srl
Procter & Gamble
Srl
Procter & Gamble
Srl
Procter & Gamble
Tooth
Tooth
Tooth
Tooth
paste
paste
paste
paste
Launch
date
2003
2003
2003
2003
Tooth paste
2003
Tooth paste, with
mineral additives
Tooth paste, with
August
2003
June 2003
White
Colgate Extra Clean
Aquafresh Total Care
Astera Anti Periodontitis
Astera Soft Flex Active
Srl
whitening effect and
protection
Colgate-Palmolive New tooth brush,
August
effectively sweeps away 2003
plaque
GlaxoSmithKline Tooth paste
August
2003
Astera AD
Tooth paste, antiOctober
periodontitis
2002
Astera AD
Toothbrush
August
2002
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
10.2 Forecast Sector Performance
Euromonitor forecasts the oral hygiene sector to be worth Leu 1.349.2 billion by 2008,
lower by 16.2% on 2003, in constant value terms. Positive changes in the disposable
incomes of the population after continuous growth of GDP are expected to be spent for
durable goods and housing, with basic products still negatively affected by the perception
of the products as satisfying basic needs.
In percentage terms, toothpaste will continued to concentrate more than 90% of value
sales. It will also perform the highest decline rate, 16.5%, in constant value term as the
main demand will focus on cheaper products, no matter their added benefits or natural
content.
Mouthwashes are expected to account for a small constant value growth rate of 9% over
the forecast period due to increased awareness and acceptance within high-income
consumers in large urban areas. Availability will remain negligible in small urban areas and
rural areas.
Table 51 Forecast Retail Sales of Oral Hygiene by Subsector: Value 2003-2008
Leu billion
Toothpaste
Manual toothbrushes
Mouthwashes/dental
rinses
Denture care
Mouth fresheners
Dental floss
Oral hygiene
2003
2004
2005
2006
2007
2008
1,479.1 1,363.7 1,283.3 1,234.5 1,219.7 1,235.5
120.7
111.6
106.7
103.4
102.2
103.3
9.5
9.6
9.8
9.9
10.1
10.4
1,609.3 1,485.0 1,399.8 1,347.9 1,332.0 1,349.2
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 52 Forecast Retail Sales of Oral Hygiene by Subsector: % Value Growth
2003-2008
% constant value growth
Toothpaste
Manual toothbrushes
Mouthwashes/dental rinses
Denture care
Mouth fresheners
2003-08
CAGR
-3.5
-3.1
1.7
-
2003/08
TOTAL
-16.5
-14.4
9.0
-
Dental floss
Oral hygiene
-3.5
-16.2
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
10.3 Power Brush Performance
Sales of power brushes remained negligible over the review period. Colgate-Palmolive
launched Colgate Motion and Colgate Actibrush but the attempt proved unsuccessful due
to its perception as an expensive luxury product, limited availability to large urban areas
and lack of awareness.
Table 53 Retail Sales of Toothbrushes by Type: Value 1998-2003
Leu billion
- Manual toothbrushes
- Power toothbrushes
-- Battery toothbrushes
--- Battery toothbrush
units
--- Battery toothbrush
replacement heads
-- Electric toothbrushes
--- Electric toothbrush
units
--- Electric toothbrush
replacement heads
Manual and power
toothbrushes
1998
66.4
-
1999
72.8
-
2000
96.6
-
2001
108.1
-
2002
114.7
-
2003
120.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66.4
72.8
96.6
108.1
114.7
120.7
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 54 Retail Sales of Toothbrushes by Type: % Value Growth 1998-2003
% current value growth
2002/03
- Manual toothbrushes
- Power toothbrushes
-- Battery toothbrushes
--- Battery toothbrush units
--- Battery toothbrush replacement heads
-- Electric toothbrushes
--- Electric toothbrush units
--- Electric toothbrush replacement heads
Manual and power toothbrushes
5.2
5.2
1998-03
CAGR
12.7
12.7
1998/03
TOTAL
81.7
81.7
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 55 Manual and Power Brush Company Shares 2001-2003
% retail value rsp
Company
Colgate-Palmolive Romania SRL
GlaxoSmithKline SRL
2001
52.0
15.0
2002
58.2
13.8
2003
60.7
14.4
Gillette Romania SRL
Astera Romania SRL
Others
Total
3.0
30.0
100.0
5.7
4.1
18.2
100.0
6.3
4.5
14.1
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 56 Manual and Power Brush Brand Shares 2001-2003
% retail value rsp
Brand
Colgate
Aquafresh
Oral-B
Astera
Others
Total
Company
Colgate-Palmolive Romania SRL
GlaxoSmithKline SRL
Gillette Romania SRL
Astera Romania SRL
2001 2002 2003
52.0 58.2 60.7
15.0 13.8 14.4
3.0
5.7
6.3
4.1
4.5
30.0 18.2 14.1
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
10.4 Power Brush Forecasts
Power brushes are estimated to remain negligible over the forecast period. Awareness will
remain low and sales negligible due to high prices compared to low purchasing power.
Trials will increase in the coming years in high income households, perceived more as a
new toy, but it is very difficult to estimate if they will be accepted or not. Mass sales are
excluded over the forecast period, when even manual toothbrushes are expected to decline
by 14.4% in constant value terms.
Table 57 Forecast Retail Sales of Toothbrushes by Type: Value 2003-2008
Leu billion
- Manual toothbrushes
- Power toothbrushes
-- Battery toothbrushes
--- Battery toothbrush
units
--- Battery toothbrush
replacement heads
-- Electric toothbrushes
--- Electric toothbrush
units
--- Electric toothbrush
replacement heads
Manual and power
toothbrushes
2003
120.7
-
2004
111.6
-
2005
106.7
-
2006
103.4
-
2007
102.2
-
2008
103.3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120.7
111.6
106.7
103.4
102.2
103.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 58 Forecast Retail Sales of Toothbrushes by Type: % Value Growth 20032008
% constant value growth
- Manual toothbrushes
2003-08
CAGR
-3.1
2003/08
TOTAL
-14.4
- Power toothbrushes
-- Battery toothbrushes
--- Battery toothbrush units
--- Battery toothbrush replacement heads
-- Electric toothbrushes
--- Electric toothbrush units
--- Electric toothbrush replacement heads
Manual and power toothbrushes
-3.1
-14.4
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
11. FRAGRANCES
11.1 Sector Performance
2003 headlines
 Premium fragrancies are the most dynamic, with a small but loyal customer base
 Low purchasing power limits price growth, leading to better performance in volume
rather than value terms
 Direct sales companies fuel sales of mass products, meeting the increased demand for
quality at affordable prices
 Strong fragmentation of fragrancies, with Avon and multinationals holding the
supremacy.
Premium fragrancies the most dynamic, with a small but loyal customer base
The Romanian fragrances market was worth Leu 1,837 billion in 2003. As a proportion of
the total fragrance sector, sales of premium brands accounted for about 37.7%. Premium
fragrance's share increased over the review period due to impressive growth of both
premium women's and premium men's, 175% and 146% respectively, in constant value
terms. An explanation stands in the changes in life style and also increased availability not
only in specialists but also in lower margin distribution channels such as supermarkets.
The main players on the premium market were present with a strong, diversified offer.
However, premium products appealed to a small number of customers, mainly in large
cities. They belonged to a wealthy segment of the population and remained loyal over the
review period. Most sales were registered in Bucharest, which accounted for the highest
disposable incomes and also for the lowest unemployment rates. The large multinationals
present in Romania had a strong contribution in the development and diversification of the
domestic market but not the least in the education of the consumers and the rise of the
demands for valuable products and brands. Being perceived as helpful to emphasise one's
own personality, quality products were preferred, leading to the share gain and significant
growth rate.
If usage of premium women's was more an attribute of life style and emphasising one's
personality, the perception of men's fragrances suffered in the past from the 'macho'
culture inherent in Romania. However, the diversified offer in the latter years of the review
period did much to boost sales. Despite low purchasing power, sales of premium products
increased by a high rate due to the existence of a loyal segment of high-income
consumers. Consumption in rural and small urban areas remained negligible.
Low purchasing power limits price growth, leading to better performance in volume rather
than value terms
Fragrances was the second largest sector within the cosmetics and toiletries market. It
also performed the second highest growth rate, after depilatories, resulting from an
impressive growth rate for premium fragrances.
After a period when the sector was highly segmented between heavy users of lower quality
mass products and a small segment of loyal users of premium fragrances, the number of
users of cheap products declined and a switch to better quality, branded products, was
noticed in the mass sector, having as a result excellent growth rate over the review period
and in 2003.
Despite declining purchasing power, a switch to quality products occurred, shaking out
fakes and no-name brand products. Although competition and low purchasing power led to
a lower value growth compared to volume growth, the trend towards quality and longer
lasting products, was strong amongst urban consumers. Premium brands performed at
excellent growth rates, higher than volumes due to the low, loyal customer base.
Meanwhile, mass fragrances took the lion's share of the market, as the availability of
premium fragrances was very limited to large cities and unaffordable to large segments of
the population. This growth of mass fragrances in volume terms led to a smaller growth in
value terms as they targeted mainly lower and medium income consumers, more price
sensitive than wealthy people.
With about 16.4% share in 2003, mass men's was the only subsector to decline over the
review period although it recorded positive volume growth rate over the same period. The
decline also continued in 2003 although by a lower 1.1% rate, in constant value terms.
Aftershave products accounted for the largest share of the subsector. Changes in shaving
habits by older people and increased usage of these products by teenagers and adults
resulted in volume growth but competition and price decline affected also the lower value
growth compared to volume. According to some studies, education does not influence the
purchase of fragrances but price does, showing that the share of higher-income consumers
who buy fragrances was about two times higher than the share of the lower-income
segment of the population.
The concept of unisex products was very new to Romanian consumers and future
prospects for success remain dependent on continued growth in purchasing power and an
increase in product awareness. The main purchasers of these products were expected to
be women, as the perception of these products amongst males remained very
conservative. The 'macho' culture prevails. Sales of premium unisex fragrances were
negligible over the review period due to their prohibitive price and the low public
perception of these products.
The fact that about 40% of the buyers in urban areas, which clearly accounts for the bulk
of sales, made their purchase of fragrances to offer them as a gift also led to the lower
value growth compared to the higher volume rate, with focus on packaging and
presentation rather than price.
Direct sales companies fuel sales of mass products, meeting the increased demand for
quality at affordable prices
Direct sales made progress after 1996, when the establishment of the large multinationals
Oriflame and Avon helped this channel to gain value share. Together with others, the
channel proved the most dynamic over the review period due mainly to the perception of
Oriflame and Avon products as premium at mass prices. Time saving was also a significant
issue for the development of the channel. Sales on credit and professional advice also
helped direct sales to perform excellent growth compared to other traditional channels.
Most competitors were concentrated in the mass subsector where Avon and Oriflame were
present with excellent brand recognition. According to recent studies, the preference of
Romanians for this channel had at least two causes: one, the specifics of the product led to
consultation and trials being valued and, secondly, very significantly, their growing
presence in small urban and rural areas, where distribution of fragrances through
specialists and other channels was reduced. Bucharest was different, with consumers here
preferring to make their purchases in supermarkets and hypermarkets due to their higher
number and consistent offer.
Department stores accounted for the second largest share in 2003. They lost significant
ground over the review period and lost the leading position due to the rapid growth of
direst sales. They maintained significant shares in mid-sized cities, where they continued
to represent a traditional channel.
Strong fragmentation of fragrancies, with Avon and multinationals holding the supremacy
The fragrances sector was fragmented between a large number of manufacturers. Most of
them were multinationals, with a very low share for domestics Farmec and Gerovital
Cosmetics.
Avon dominated fragrances by far, with shares increasing year by year due to strong
penetration in small urban and rural areas, which were generally avoided by multinationals
due to lower purchasing power in comparison to Bucharest and other large cities. Oriflame
accounted for the second leading position but its share declined slightly over the review
period, when Avon took the leadership. The leading position of Avon and Oriflame confirm
the strong growth of direct sales companies in this highly fragmented sector, making the
same quality mass products available and affordable to consumers in all the regions. Their
products continued to be perceived by most consumers as premium at mass prices. Mass
women's accounted for the bulk of sales as men purchased cheap after shave brands,
under 100,000 Leu, which was out of the price range of Avon and Oriflame.
After a period of strong growth, Coty, supported by heavy advertising and promotions, it
started to loose share against direct sales companies, Chanson and Prêt-à-Porter were the
company's main brands, benefiting also from strong presence in deodorants. L'Oréal also
retained a leading position although far behind the leader. Its leading brands within mass
women, Vanderbilt, Reverie Pure, Naf Naf, were perceived as premium brands, too
expensive for medium and low income consumers. That was the reason why L'Oréal lost
share. However, in 2003, L'Oréal tried to reposition its Vanderbilt brand towards a mass
product by expanding its distribution also to lower margin channels as independent food
stores and outdoor markets.
A group of premium brands manufacturers followed, which consisted of the strong
Christian Dior, Chanel, Rochas, Givenchy, Estée Lauder, Hugo Boss, accounting for the
main shares of premium fragrances. The offer was very rich, with all the brands present on
the international markets, but sales were limited to Bucharest and a few other large cities,
with specialists accounting for the bulk of sales. Supermarkets also increased their share
but only for those customers loyal to some brands and searching for lower prices
compared to specialists. The premium subsector was the champion of new launches,
following immediately the new launches on the international markets, but they passed
unnoticed by the large public. Launch of premium new products was successful because
they were not influenced by the decreasing purchasing power of the population All the
large premium manufacturers launched at least two to three sub-brands each year but
only very wealthy, heavy consumers, were aware of it.
Unilever, Gillette, Henkel, Beiersdorf, Colgate-Palmolive were also multinationals which
accounted for lower shares due to lower prices for their mass men's fragrances. Their offer
consisted mainly of after shave fragrances, which were perceived as basic products, for
which price was the main determinant for the purchase decision. Nivea for Men, Axe,
Denim, Mennen, Fa Men, and Gillette Series were the main brands, enjoying recognition
and intensive usage.
Although its value share was very small, Antonio Puig was one of the strongest advertisers
of its Diavolo de Antonio Banderas and the newly launched Mediterraneo de Antonio
Banderas, for which shares were expected to grow fast in the coming period.
The main domestic manufacturers Farmec and Gerovital Cosmetics were also active and
improved their product quality and diversified product lines, but the low prices led to a
small value share compared to multinationals. Their most significant advantages were
price, increased quality and availability through developed distribution networks.
Concentration
There was little information on further breakdown of fragrances. There was still a lot of
confusion among consumers between Eau de Toilette, Eau de Cologne, Parfum de Toilette
with no perceived differences between them. According to store checks and offers, eau de
Toilette retained the bulk of sales, with small shares for Eau de Cologne and Parfum de
Toilette. Eau de Parfum was negligible, while Perfume was generally premium, very high
priced and it appealed only to a much reduced segment of wealthy people. Its sales can be
considered as negligible.
Eau de toilette accounted for the largest share of value sales of both mass and premium
women's while aftershave accounted for significant sales of mass men's. Combinations of
after shave/ eau de toilette started to be considered by men but the share remained low
due to higher prices. Eau de toilette was preferred within premium men's.
Fragrances: men's premium fragrances
Men's premium fragrances was the smallest sector over the review period and it suffered
in the past from the 'macho effect', reducing consumption of men's fragrances to mass
aftershave. Premium men's were considered luxury but the lack of products on the market
also led to this low share. However, in the latter years of the review period, multinationals
improved their offer of premium fragrances with brand extensions for men of premium
women's brands, trying to benefit from brand recognition, or even launched men brands
which proved very successful as Dior's Fahrenheit and Eau Sauvage, Hugo Boss' Hugo and
Loris Azzaro's Chrome. Chrome and Hugo were the leading brands in 2003 due to the
perception of providing an excellent quality-to-price ratio and significant outdoor and
indoor advertising.
Fragrances: women's premium fragrance
Women's premium fragrances was much more developed than men's premium.
Multinationals were exclusively accounting for sales but distribution was limited to
specialists and supermarkets in Bucharest and a few large cities. Famous manufacturers
were present on the Romanian market, with the same products as on international
markets. The offer was very sophisticated and diversified although demand remained low,
with a small but loyal segment accounting for the majority of sales. Despite the presence
of new brands or versions of existing brands of premium products, demand remained
concentrated on established premium brands such as Rochas' Madame Rochas, Dior's
Dune, Givenchy's Organza, Lancôme's Magie Noire and Ô de Lancôme, Chanel's Chanel
No5, Kenzo's Eau par Kenzo. Other multinationals were also present on the market but
they had to make financial efforts in order to gain awareness and share due to their late
entry on the market. Examples are Italians Bulgari, Dolce & Gabana, Versace, Armani,
Laura Biagiotti and Ungaro.
Table 59 Retail Sales of Fragrances by Subsector: Value 1998-2003
Leu billion
Premium fragrances
- Premium men's
fragrances
- Premium women's
fragrances
- Premium unisex
fragrances
Mass fragrances
- Mass men's fragrances
- Mass women's
fragrances
- Mass unisex fragrances
Fragrances
1998
59.8
10.1
1999
104.7
17.4
2000
171.0
27.8
2001
284.8
47.1
2002
453.3
71.4
2003
664.4
101.2
49.7
87.3
143.2
237.7
381.9
563.2
-
-
-
-
-
-
244.7
87.0
157.7
311.2
106.5
204.7
438.9
156.8
282.1
643.3
214.2
429.1
901.2
266.4
634.8
1,172.6
306.3
866.3
304.5
415.9
609.9
928.1
1,354.5
1,837.0
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 60 Retail Sales of Fragrances by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Premium fragrances
- Premium men's fragrances
- Premium women's fragrances
- Premium unisex fragrances
Mass fragrances
- Mass men's fragrances
- Mass women's fragrances
- Mass unisex fragrances
Fragrances
46.6
41.7
47.5
30.1
15.0
36.5
35.6
1998-03
CAGR
61.9
58.6
62.5
36.8
28.6
40.6
43.3
1998/03
TOTAL
1,011.0
902.0
1,033.2
379.2
251.9
449.5
503.3
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 61 Fragrances Company Shares 2001-2003
% retail value rsp
Company
Avon Cosmetics Romania SRL
Oriflame Cosmetics Romania SRL
Coty Cosmetics Romania SRL
L'Oreal Romania SRL
Christian Dior SA, Parfums
Chanel SA
Rochas SA, Parfums
Givenchy SA, Parfums
Unilever Romania SA
Farmec SA
Tamaris SA (Parfums Kenzo)
Estée Lauder Romania SRL
Yves Rocher SA
Hugo Boss Parfums
Cacharel & Cie, Parfums
Gillette Romania SRL
Laura Biagiotti SpA
Henkel Romania SRL
Yves Saint Laurent Parfums
Jacomo SA
Gerovital Cosmetics SA
Romsar Cosmetics SA
Revlon Manufacturing UK Ltd
Loris Azzaro SA, Parfums
Mirato Nuova SpA
Colgate-Palmolive Romania SRL
Manetti & Roberts & C SpA
Boucheron Parfums
Guy Laroche SA
Paco Rabanne - Groupe Puig SA
Karl Moran, Parfums
Cofci, Groupe (Parfums Salvador Dali)
Others
2001
21.7
12.2
8.8
5.1
3.2
1.8
2.8
2.0
3.9
4.0
2.7
1.9
1.3
1.4
1.3
2.5
1.2
2.1
1.1
0.8
1.7
2.4
0.5
0.4
0.9
0.5
0.7
0.2
0.3
0.2
0.3
0.2
9.9
2002
28.0
10.7
7.4
4.3
3.2
2.5
2.9
2.5
3.2
3.2
2.6
1.9
1.5
1.7
1.6
1.8
1.3
1.6
1.0
0.9
1.2
1.5
0.6
0.5
0.6
0.4
0.4
0.2
0.2
0.2
0.2
0.1
10.2
2003
31.5
10.3
6.2
3.9
3.3
3.3
2.9
2.8
2.7
2.6
2.5
2.1
2.0
2.0
1.8
1.4
1.4
1.2
1.1
1.0
1.0
0.8
0.5
0.5
0.5
0.4
0.2
0.2
0.2
0.2
0.1
0.1
9.1
Total
100.0
100.0
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 62 Fragrances Brand Shares 2001-2003
% retail value rsp
Brand
Oriflame
Individual Blue
Rare Gold
Far Away
Pink Suede
Treselle
Yves Rocher
Chanel N°5
Gillette Aftershave Splash
Chanson
Dune
Madame Rochas
L'Eau par Kenzo
adidas
Magie Noire
Prêt-à-Porter
Organza
Axe
Fa Men
Denim
Intrigue
Uomo
Amarige
Ô de Lancôme
Obsesie
Boss Woman
Crossmen
Cobalt
Laura Biagiotti Roma
Athos
Friktion
Vanderbilt
Noa
Charlie
Brut
BU
Anaïs Anaïs
Chrome
Tarr
Pleasures
Poison
Extravagance d'Amarige
Allure
Miss Miraj
Hugo
Private Collection
Mennen
Kenzo Jungle
Fleurs de Diva
Company
Oriflame Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Yves Rocher SA
Chanel SA
Gillette Romania SRL
Coty Cosmetics Romania SRL
Christian Dior SA, Parfums
Rochas SA, Parfums
Tamaris SA (Parfums Kenzo)
Coty Cosmetics Romania SRL
L'Oreal Romania SRL
Coty Cosmetics Romania SRL
Givenchy SA, Parfums
Unilever Romania SA
Henkel Romania SRL
Unilever Romania SA
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Givenchy SA, Parfums
L'Oreal Romania SRL
Farmec SA
Hugo Boss Parfums
Coty Cosmetics Romania SRL
Coty Cosmetics Romania SRL
Laura Biagiotti SpA
Farmec SA
Avon Cosmetics Romania SRL
L'Oreal Romania SRL
Cacharel & Cie, Parfums
Revlon Manufacturing UK Ltd
Unilever Romania SA
Romsar Cosmetics SA
Cacharel & Cie, Parfums
Loris Azzaro SA, Parfums
Farmec SA
Estée Lauder Romania SRL
Christian Dior SA, Parfums
Givenchy SA, Parfums
Chanel SA
Gerovital Cosmetics SA
Hugo Boss Parfums
Estée Lauder Romania SRL
Colgate-Palmolive Romania SRL
Tamaris SA (Parfums Kenzo)
Rochas SA, Parfums
2001 2002 2003
12.2 10.7 10.3
4.1
6.2
6.6
6.1
6.7
5.6
3.3
4.4
4.8
2.6
3.4
4.6
0.7
3.2
1.3
1.5
2.0
0.8
1.2
1.7
2.5
1.8
1.4
1.9
1.5
1.3
1.3
1.2
1.2
1.0
1.1
1.2
1.0
1.3
1.1
1.3
1.3
1.1
0.8
0.9
1.0
1.5
1.3
1.0
0.8
0.8
1.0
1.6
1.1
0.9
1.4
1.1
0.9
0.9
1.1
0.9
0.4
0.5
0.9
0.4
0.8
0.8
0.8
0.8
0.8
0.6
0.8
0.9
0.8
0.7
0.3
0.5
0.7
0.9
0.9
0.7
0.9
0.7
0.7
0.5
0.6
0.6
0.7
0.6
0.6
0.3
0.6
1.2
1.1
0.6
0.3
0.5
0.6
0.5
0.6
0.5
0.9
0.6
0.5
1.4
1.0
0.5
0.3
0.3
0.5
0.3
0.4
0.4
0.7
0.5
0.4
0.5
0.5
0.4
0.8
0.5
0.4
0.3
0.5
0.4
0.2
0.4
0.6
0.5
0.4
0.2
0.3
0.4
0.3
0.3
0.4
0.5
0.4
0.4
0.5
0.3
0.3
0.3
0.4
0.3
Vanilla Fields
Hattric
Malizia
Masumi
Symbol
Aura for Women
Aramis
Fahrenheit
Cristalle
Dolce Vita
Hugo Deep Red
Miraj
Kenzo Jungle pour Homme
Neutro Roberts
Obsession for Men
Byzance
Opium
Intesa
Farmec
Alchimie
Eden
Drakkar Noir
Paco Rabanne pour
Homme
Loulou Blue
Poême
Silences
Laura Biagiotti Roma
Uomo
Jaïpur Homme
Ninety-Nine
Rêverie Pure
Karl Moran
Abyss
Opium pour Homme
Ashaya
Coco Chanel
Tocade
Eau Sauvage
Naf Naf
Jazz
Bucur
Laura Biagiotti Venezia
Others
Total
Coty Cosmetics Romania SRL
Henkel Romania SRL
Mirato Nuova SpA
Coty Cosmetics Romania SRL
Farmec SA
Jacomo SA
Estée Lauder Romania SRL
Christian Dior SA, Parfums
Chanel SA
Christian Dior SA, Parfums
Hugo Boss Parfums
Gerovital Cosmetics SA
Tamaris SA (Parfums Kenzo)
Manetti & Roberts & C SpA
Unilever Romania SA
Rochas SA, Parfums
Yves Saint Laurent Parfums
Mirato Nuova SpA
Farmec SA
Rochas SA, Parfums
Cacharel & Cie, Parfums
Guy Laroche SA
Paco Rabanne - Groupe Puig SA
0.7
0.7
0.5
0.6
0.4
0.3
0.2
0.1
0.3
0.3
0.3
0.1
0.3
0.7
0.2
0.3
0.3
0.5
0.5
0.5
0.3
0.3
0.2
0.4
0.5
0.4
0.4
0.4
0.3
0.3
0.2
0.3
0.3
0.3
0.2
0.2
0.4
0.2
0.3
0.2
0.3
0.2
0.3
0.2
0.2
0.2
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Cacharel & Cie, Parfums
L'Oreal Romania SRL
Jacomo SA
Laura Biagiotti SpA
0.3
0.3
0.3
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.1
Boucheron Parfums
Romsar Cosmetics SA
L'Oreal Romania SRL
Karl Moran, Parfums
Gerovital Cosmetics SA
Yves Saint Laurent Parfums
Tamaris SA (Parfums Kenzo)
Chanel SA
Rochas SA, Parfums
Christian Dior SA, Parfums
L'Oreal Romania SRL
Yves Saint Laurent Parfums
Gerovital Cosmetics SA
Laura Biagiotti SpA
0.2
0.2
0.1
0.6
0.3
0.1
0.4
0.2
0.1
0.3
0.2
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.3
0.2
0.1
0.3
0.3
0.1
0.3
0.2
0.1
0.2
0.1
0.1
0.4
0.1
0.1
0.1
0.1
0.1
0.2
0.1
0.1
0.1
0.1
0.1
25.7 25.2 24.9
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 8 Fragrances New Product Developments 2002-2003
Brand name
Company
Product type
Mediterraneo by Antonio
Banderas
Dream Life
Fresh Cologne
Antonio Puig
Eau de Cologne
Launch
date
June 2003
Avon
Oriflame
Eau de toilette
Eau de cologne
2003
2003
Omnia
Bulgari
Versus
Versace
Profumi
Agua Brava
Antonio Puig
SA
Avon Blue for Her, for Him Avon
Treselle
Blu for Men
Davidoff for Men
Avon
Bulgari
Parfums
Davidoff
Eau de Toilette, premium 2003
women's
Eau de Toilette
2003
Eau de cologne
May 2002
Eau de Toilette, men's,
women's
Eau de Toilette, women's
Eau de toilette
After shave
2002
2002
2002
2002
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
11.2 Forecast Sector Performance
Euromonitor forecasts the Romanian fragrance market to be worth Leu 2,635 billion in
2008, up by 43% on 2003, in constant value terms.
Premium women's fragrances will see the most dynamic growth over the forecast period.
Sales are expected to grow by 97% in constant value terms, stimulated by the growth in
disposable incomes and the increasing trend towards fashion and individualisation which is
seen in other sectors. High profile product launches and the expansion of boutiques will
also boost growth. Mass women's will continue to register significant growth due to the
strong presence of direct sales companies, very successful in sales of mass women's but
accounting for small sales of mass men's.
Premium men's fragrance will see dynamic growth over the forecast period, with sales
growing by 61% in constant value terms. Mass men's is forecast to be the single category
to decline. This has two significant causes: firstly, increasing disposable incomes due to
preparations for integration into the EU by 2007 and, secondly, the strong competition in
mass men's, focused on aftershaves, with price decline due to strong perception of the
products as basic.
Table 63 Forecast Retail Sales of Fragrances by Subsector: Value 2003-2008
Leu billion
Premium fragrances
- Premium men's
fragrances
- Premium women's
fragrances
- Premium unisex
fragrances
Mass fragrances
- Mass men's fragrances
- Mass women's
fragrances
- Mass unisex fragrances
Fragrances
2003
664.4
101.2
2004
796.8
116.5
2005
2006
2007
2008
927.7 1,052.8 1,174.6 1,277.7
128.9
139.9
151.2
163.2
563.2
680.3
798.7
-
-
-
912.9 1,023.4 1,114.5
-
-
-
1,172.6 1,200.6 1,233.9 1,269.1 1,311.8 1,357.7
306.3
300.5
293.3
282.4
268.9
252.2
866.3
900.1
940.6
986.7 1,042.9 1,105.5
1,837.0 1,997.4 2,161.5 2,321.9 2,486.4 2,635.4
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 64 Forecast Retail Sales of Fragrances by Subsector: % Value Growth
2003-2008
% constant value growth
Premium fragrances
- Premium men's fragrances
- Premium women's fragrances
- Premium unisex fragrances
Mass fragrances
- Mass men's fragrances
- Mass women's fragrances
- Mass unisex fragrances
Fragrances
2003-08
CAGR
14.0
10.0
14.6
3.0
-3.8
5.0
7.5
2003/08
TOTAL
92.3
61.3
97.9
15.8
-17.7
27.6
43.5
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
12. SKIN CARE
12.1 Sector Performance
2003 headlines
 Emerging firming/anti-cellulite the most dynamic in 2003
 Volume growth outperforms value growth due to increased competition from domestic
manufacturers
 Perceived as providing excellent skin care attributes, facial moisturisers are the most
commonly used products but other categories also perform well
 Avon was the indisputable leader, with multinationals and domestic players competing
closely in a growing market
Emerging firming/anti-cellulite the most dynamic in 2003
The Romanian skin care market was worth Leu 1,451 billion in 2003, with growth in sales
at a rate of 6.7% in constant value terms over the review period.
Facial cleansing wipes was the most dynamic subsector over the review period, having
grown by 114% in constant value terms, consequence of changes in life style and the
perception of cleansing wipes as providing better benefits than ordinary cotton wool,
traditionally used for make-up removal. Despite this impressive growth, facial cleansing
wipes remained small, with make-up removal as its main purpose. Its share increased
rapidly in large cities, appealing to higher-income consumers, while in rural areas and
small urban areas, women continued to stick to traditional cotton wool. Beiersdorf
dominated facial cleansing wipes due to its excellent image in skin care. The perception of
the product as providing skin care attributes was the main determinant for Nivea's success
within facial cleansing wipes. Sisma's Cotoneve also increased its share due to extended
distribution also in lower margin channels.
Increased concern for facial appearance determined the higher growth rate for facial skin
care products compared to multifunctional single products such as body care, used in the
past in place of facial moisturisers and even hand care. Towards the end of the review
period, consumers became more aware of the functions of products in different subsectors.
Facial skin care was the largest subsector in 2003, with facial moisturisers accounting for
more than half of the subsector value sales in the same year. Facial skin care was also the
most dynamic over the review period, due mainly to the excellent performance of facial
moisturisers, whose sales grew by 9% in constant value terms over the review period.
Nourishers/anti-agers, very dynamic in 2003, had no history to be registered over the
review period but contributed significantly to the growth in sales of facial care products. It
became significant in 2000 and since then performed at excellent growth rates due to the
novelty effect and increased awareness of specialised products.
The same as nourishers/anti-agers, firming /anti-cellulite products had no history over the
review period, emerging as significant in 2002. Due to its novelty effect, it was the most
dynamic in 2003 but sales were limited to wealthy people in Bucharest and a few large
cities due to its low awareness and the perception of a luxury product. Even though the
educational level for usage of special purpose products remained low, purchases made by
high-income well educated segments of the population helped the nourishers/anti-agers
and firming/anti-cellulite products to register impressive growth rates even though they
started from a very low base.
Volume growth outperformed value growth due to increased competition from domestic
manufacturers
The skin care sector as a whole benefited from extensive advertising as well as product
development and availability over the review period. The influx of a number of foreign
brands over the review period stimulated demand, which led to positive growth rates over
the review period due to increased preference for quality products.
During the latter years of the review period, domestic manufacturers increased their
shares due to improved offer, with already well-known brands and new brands, offering
better quality at affordable prices. This better performance of local manufacturers such as
Farmec, Elmi Prodfarm, Gerovital Cosmetics and Gerocossen, led to value growth at a
lower rate than volume growth although penetration rate remained small in small urban
and rural areas. However, the active presence of direct selling companies Avon and
Oriflame led to increased awareness of benefits delivered by skin care products also in
rural areas and small urban areas, which took the advantage of being offered the same
products as in large cities. At the same time, low purchasing power limited sales of more
expensive products but created awareness of benefits, which led to volume growth of the
sector at a higher rate than value growth due to expanded presence of local manufacturers
with lower prices but quality products.
Body care and hand care also registered significant drops in sales over the review period
mainly due to their perception as basic products and increased price sensitivity. The
presence of domestic manufacturers on the market, with better quality but cheaper
products, determined also the decline rate. If the hand care products kept their perception
as basic product and price sensitivity remained high, the presence of new products in the
body care subsector, especiaVy anti-cellulite, led to increased usage and price increase,
leading to a higher positive growth rate within the sector.
At the same time, there was still confusion among consumers about usage of different
specific products. It seems there was a certain resistance for assimilation of novelties and
this fact was expected to remain so in the future. Educational levels were still very low for
an acknowledged usage of facial care products. At the same time, there was extremely low
awareness of products used against skin ageing, skin protection and maintenance. This
lack of knowledge determined a focus on colour cosmetics and fragrances more than on
skin care products.
Perceived as providing excellent skin care attributes, facial moisturisers are the most
commonly used products but other categories also perform well
Facial moisturisers was the largest subsector within skin care, representing 35% of skin
care value sales. It also registered significant value growth due to common usage by most
women, by 9% in constant value terms over the review period. The ageing rate of the
population increased in the last decade due to low birth rate and high emigration rate of
young people, which led to a higher number of elderly women, some of them increasingly
concerned about their appearance. Facial moisturisers, more than other subsectors,
became a category capable of enhancing one's self-image, which caused its volume
growth. The presence of direct sales companies had a significant role in the education of
women not only in large urban areas but also in smaller cities and even rural areas.
Facial cleansers also performed at an excellent growth rate, 12% in constant value terms
over the review period, due mainly to the increased presence of good quality colour
cosmetics, which needed specialised products for efficient and healthy cleansing.
In constant value terms, toners and especially facemasks performed at good growth rates
although sales remained low, due mainly to the low educational level and their perception
as luxury products. Although product awareness remained low, their perception as
revitalising products made them register positive growth rates over the review period and
in 2003.
Hand care registered a drop in sales over the review period of 19% in constant value
terms. This was mainly due to its perception as a basic product and increased price
sensitivity. The presence of domestic manufacturers on the market, with better quality but
cheaper products, also determined the decline rate. Body care also has a high level of local
manufacturers offering low cost reasonably priced goods. However, the arrival of new,
value- added products in the body care subsector, especially anti-cellulite, led to an
increased usage but also a price increase, leading to positive growth over the review
period. Both subsectors registered positive growth rates in 2003 due to growing awareness
and presence in small cities and rural communities.
Avon is the undisputable leader, with multinationals and domestics competing closely in a
growing market
With almost 31% share of value sales in 2003, Avon retained the leadership of the sector
due to active presence in all the regions, professional advice and good paying terms. Avon
was also a heavy advertiser on TV, with its newly launched Anew Clinical. Its presence in
malls and shopping centres increased, contrary to Oriflame, which continued to stick to
traditional direct sales. Both Oriflame and Avon also continued to launch every year new
brands or new improved versions of their existing brands. Anew Clinical and Anew Ultimate
Eye, together with new versions of Avon brands in the large hand care and body care as
Hand Cream with Liposomes, Firming Body Lotion with Liposomes and Multivitamin Body
Lotion. Oriflame was also present with its new product line Ocean Algae, based on marine
herbs.
Farmec had the largest share within domestic manufacturers and also ranked second in
2003 although far behind Avon, with a 13% share of the market. Its brands Gerovital Plant
and Gerovital H3 were important leading brands, benefiting from strong customer
recognition due to the formula invented by Ana Aslan, which became famous in the
communist era, considered excellent for fighting signs of ageing. The company launched in
2002 its Aslavital product line, present in all subsectors. Its new formula based on clay
represented an innovation on the Romanian market, according to the company's
executives. Gerovital Cosmetics was also a significant local manufacturer over the review
period. It had a license to produce the same Gerovital brand as Farmec, which created
confusion among consumers, leading to its significant decline in the latter years of the
review period. However, in 2003 it started manufacturing the same Gerovital H3 as
Farmec, in order to compensate for share loss. Both products were present mainly in
pharmacies/drugstores and specialists.
Elmi Prodfarm and Gerocossen were also local manufacturers active on the skin care
market with broad product lines. Elmiplant and Gerocossen were the main brands. The
increased demand for cheaper but quality products helped the domestic manufacturers
gain share over the review period by virtue of offering a large range of brands for different
subsectors. They all ranked among the top ten manufacturers of skin care products.
Multinationals Beiersdorf and L'Oréal ranked among the top five manufacturers, based on
high quality products and excellent brand awareness. Their presence across the whole
sector led to their excellent performance. Nivea Visage and Nivea Soft, Garnier Synergie
and L'Oréal Plénitude were the main brands, accounting for the highest shares. Beiersdorf
was responsible also for the Atrix brand to target lower-to-medium income consumers but
awareness and sales remained limited to large urban areas. L'Oréal also launched its Pure
Zone product line but awareness was low despite advertising on TV. Both Beiersdorf and
L'Oréal were heavy advertisers on TV.
Colgate-Palmolive with Palmolive, Henkel with Fa and Unilever with Ponds were other
significant manufacturers on this rather fragmented sector. They had significant presence
in the so called basic general body care and hand care, appealing mainly to lower-tomedium income consumers, lass aware of specialised products.
Skin care: facial moisturisers
Facial moisturisers was the largest subsector within skin and very concentrated. The top
five manufacturers, Avon, Oriflame, Farmec, Beiersdorf and L'Oréal accounted together for
81% of total value sales. Avon was the indisputable leader, with 29.1% share, followed at
a distance by Farmec, with 16.1%. Perceived as capable of enhancing one's self-image,
facial moisturisers were less sensitive to price. Professional advice and good payment
terms promoted direct sales by Avon and Oriflame, together with increased penetration in
traditional lower income areas such as small cities and communities, leading to significant
share gain for these companies. Farmec also held a significant leading position due to
strong availability, lower prices and good brand recognition, based on Ana Aslan's antiageing formula.
Skin care: nourisher/anti-agers
Relatively new on the skin care market, nourishers/anti-agers benefited from strong
information and educational campaigns conducted by Avon and Oriflame but also by the
large players Beiersdorf and L'Oréal. Avon, L'Oréal, Oriflame and Beiersdorf were the main
actors on this small subsector, accounting together for an 84.1% share. Avon was the
leading manufacturer in 2003 and its share increased rapidly since the emergence of the
subsector in 2000 due to information campaigns and professional advice. L'Oréal and
Beiersdorf were heavy advertisers on TV, supporting consumers' education, but their sales
were limited to highly-educated consumers, in large cities.
Skin care: body care
Body care was perceived as a basic sector and it was affected by price sensitivity.
Traditional brands such as Fa and Palmolive progressively lost share due to the increased
presence of direct sales companies in small cities and communities. Improved formulas
also led to share gain for these companies, especially as they were also the main players
in the small but highly dynamic firming/anti cellulite body care subsector. Avon accounted
alone for a 42.7% share in 2003 due in part to advertising and also to its presence with
stands in shopping centres and malls.
Table 65 Retail Sales of Skin Care by Subsector: Value 1998-2003
Leu billion
Facial care
- Facial moisturisers
- Nourishers/anti-agers
- Facial cleansers
-- Liquid/cream/gel/bar
cleansers
-- Facial cleansing wipes
- Toners
- Face masks
- Lip moisturisers
Body care
- Firming/anti-cellulite
body care
- General purpose body
care
Hand care
Skin care
1998
205.4
117.4
79.3
68.1
1999
311.4
168.9
2.8
126.2
97.5
2000
407.9
215.3
5.9
166.2
119.7
2001
550.8
290.5
12.2
219.6
155.7
2002
747.1
395.4
21.9
293.6
210.9
2003
960.0
521.1
33.4
362.3
264.7
11.2
5.1
3.6
67.3
-
28.7
7.7
5.8
74.4
-
46.5
10.9
9.6
98.9
-
63.9
14.4
14.1
163.7
2.8
82.7
18.4
17.8
228.4
8.2
97.6
22.4
20.8
287.7
15.2
67.3
74.4
98.9
160.9
220.2
272.5
61.9
334.6
80.4
466.2
105.8
612.6
131.5
846.0
165.1
1,140.6
203.9
1,451.6
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 66 Retail Sales of Skin Care by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Facial care
- Facial moisturisers
- Nourishers/anti-agers
- Facial cleansers
-- Liquid/cream/gel/bar cleansers
-- Facial cleansing wipes
- Toners
- Face masks
- Lip moisturisers
Body care
- Firming/anti-cellulite body care
- General purpose body care
Hand care
Skin care
28.5
31.8
52.5
23.4
25.5
18.0
21.7
16.9
26.0
85.4
23.8
23.5
27.3
1998-03
CAGR
36.1
34.7
35.5
31.2
54.2
34.4
42.0
33.7
32.3
26.9
34.1
1998/03
TOTAL
367.4
343.9
356.9
288.7
771.4
339.2
477.8
327.5
304.9
229.4
333.8
Source: Official statistics (INSSE), trade press (Capital, Ziarul Financiar, Adevarul
Economic, Cosmetica Activa), company research, store checks, trade interviews,
Euromonitor estimates
Table 67 Skin Care Company Shares 2001-2003
% retail value rsp
Company
Avon Cosmetics Romania SRL
Farmec SA
Oriflame Cosmetics Romania SRL
Beiersdorf Romania SRL
L'Oreal Romania SRL
Elmi Prodfarm SRL
Colgate-Palmolive Romania SRL
Gerovital Cosmetics SA
Unilever Romania SA
Gerocossen SRL
Henkel Romania SRL
Sisma SpA
Mega Disposables SA
Copimex NV SA
Johnson & Johnson Romania SRL
Ipek Idrofil Pamuk Sanayii
Romsar Cosmetics SA
Florena Cosmetic GmbH
Others
Total
2001
17.7
14.7
12.4
10.9
8.8
2.4
4.7
2.6
3.0
1.2
2.2
1.5
0.6
1.4
0.1
15.8
100.0
2002
25.0
13.8
12.1
10.1
8.3
2.8
3.4
2.3
2.4
1.4
1.6
0.8
1.2
0.7
0.8
0.4
0.4
0.1
12.2
100.0
2003
31.0
13.3
11.9
10.0
8.2
3.1
2.5
2.3
1.8
1.3
1.1
0.9
0.9
0.7
0.5
0.5
0.4
0.1
9.6
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 68 Skin Care Brand Shares 2001-2003
% retail value rsp
Brand
Oriflame
Avon Naturals
Avon
Nivea Visage
L'Oréal Plénitude
Gerovital Plant
Gerovital H3
Avon Skin-So-Soft
Synergie
Aslavital
Elmiplant
Palmolive
Anew
Avon Solutions
Avon Hand Care
Nivea Body
Pond's
Gero F2
Avon Clearskin
Fa
Nivea Soft
Cotoneve
Pom Pon
Avon Soluions
Pell Amar Dr Ionescu
Calinesti
Gerovital F2
Lisa
Doina
Farmec
Nivea Crème
Gerocossen
Johnson's pH 5.5
Bio
Ipek
Tokalon
Ecovital
Avon Anew
Vanilla Line
Avon Body
Dove
Norvea
Atrix
Florena
L'Oréal Dermo-Expertise
Sanopil
Others
Total
Company
Oriflame Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Beiersdorf Romania SRL
L'Oreal Romania SRL
Farmec SA
Farmec SA
Avon Cosmetics Romania SRL
L'Oreal Romania SRL
Farmec SA
Elmi Prodfarm SRL
Colgate-Palmolive Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Avon Cosmetics Romania SRL
Beiersdorf Romania SRL
Unilever Romania SA
Gerovital Cosmetics SA
Avon Cosmetics Romania SRL
Henkel Romania SRL
Beiersdorf Romania SRL
Sisma SpA
Mega Disposables SA
Avon Cosmetics Romania SRL
Gerocossen SRL
2001 2002 2003
12.4 12.1 11.9
5.5
7.1
8.9
4.4
5.7
6.6
7.2
6.6
6.5
5.6
5.3
5.0
6.3
5.7
4.9
4.8
4.5
3.8
2.0
3.1
3.7
3.2
3.0
2.9
0.2
1.2
2.7
2.1
2.4
2.6
4.1
3.1
2.3
0.3
1.1
2.2
0.8
1.6
1.7
0.8
1.2
1.7
2.0
1.8
1.7
3.0
2.2
1.5
1.5
1.3
1.3
0.8
1.0
1.1
2.2
1.6
1.1
1.0
1.0
1.1
0.8
0.9
1.5
1.2
0.9
0.6
0.5
0.8
0.4
0.7
0.7
Gerovital Cosmetics SA
Copimex NV SA
Farmec SA
Farmec SA
Beiersdorf Romania SRL
Gerocossen SRL
Johnson & Johnson Romania SRL
Elmi Prodfarm SRL
Ipek Idrofil Pamuk Sanayii
Romsar Cosmetics SA
Farmec SA
Avon Cosmetics Romania SRL
Gerovital Cosmetics SA
Avon Cosmetics Romania SRL
Unilever Romania SA
Colgate-Palmolive Romania SRL
Beiersdorf Romania SRL
Florena Cosmetic GmbH
L'Oreal Romania SRL
Gerovital Cosmetics SA
0.5
0.6
0.7
0.6
0.7
0.7
0.7
0.7
0.6
0.8
0.7
0.6
0.6
0.5
0.6
0.8
0.7
0.6
1.4
0.8
0.5
0.2
0.5
0.5
0.4
0.5
0.4
0.4
1.1
0.5
0.3
0.1
0.2
0.3
0.5
0.4
0.3
0.1
0.2
0.3
0.3
0.3
0.6
0.3
0.2
0.1
0.2
0.2
0.1
0.1
0.1
0.1
0.2
0.1
0.0
19.0 16.3 13.9
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 9 Skin Care New Product Developments 2002-2003
Brand name
Company
Product type
Launch
Apidermin
Anew Clinical
Complex
Apicol SA
Avon
Planet SPA
L'Oréal Revitalift
Fa Wellness
L'Oréal Pure Zone
Avon
Avon
L'Oréal
Henkel
L'Oréal
Avon
Oriflame Ocean Algae
Oriflame
Anew Ultimate Eye
Aslavital
Avon
Farmec
Avon Solutions
Avon
date
2003
Facial moisturisers
New nourishers /anti-agers,
with collagen
Body care, with olive oil
Anti-wrinkles product
General purpose body cream
Tonesr, moisturisers, cleansers
Hand Cream with Liposomes,
Firming body lotion with
liposomes, Multivitamin Body
Lotion
New product line: moisturisers,
toners, nourishers, cleansing
wipes
Nourishers, anti-agers
New line: moisturisers,
cleansers, masks (clay, new
formula), toners
New product line
2003
2003
2003
2003
2003
2003
2003
2002
2002
2002
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
12.2 Premium versus Mass
Premium products were sought mainly by very high-income consumers, a small but loyal
segment. Due to low purchasing power, these were perceived as 'super luxury' products.
Quality, not price, was very significant for the growth of this segment, with consumers
highly attracted to luxury brand names. Low purchasing power did not affect sales of
premium products and their share increased mainly due to price growth as volume
remained about the same.
Perceived as premium brands at the beginning of the review period, Garnier Synergie and
L'Oréal Plénitude were repositioned by improved availability in lower margin channels but
also through heavy advertising. However, they were still perceived as premium by lower
income consumers, who were very price sensitive.
The mass market segment was the largest and included upper mass brands (in the
Romanian context), which dominated this sector, such as Oriflame, Avon, Nivea and
products that targeted low income segments of the population, such as Gerovital, Fa,
Palmolive, Elmiplant, Gerocossen but which allowed good returns due to volume growth,
consequence of the low purchasing power.
Table 69 Skin Care Premium vs Mass Analysis 1998/2003
% retail value rsp
Premium
Mass
Total
1998
1.5
98.5
100.0
2003
2.5
97.5
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
12.3 Forecast Sector Performance
Euromonitor forecasts the skin care products market to grow by a rate of 30% in constant
value terms over the forecast period due to an increase in disposable incomes. Income
growth over the forecast period will affect also skin care, which is expected to grow
following the new perception of the products as providing health attributes and also as
tools for enhancing self-image. Value growth will continue to be influenced by low
purchasing power but higher education levels for usage of more specific products and
product usage on a more regular basis are estimated to lead to positive growth rates over
the forecast period.
Table 70 Forecast Retail Sales of Skin Care by Subsector: Value 2003-2008
Leu billion
Facial care
- Facial moisturisers
- Nourishers/anti-agers
- Facial cleansers
-- Liquid/cream/gel/bar
cleansers
-- Facial cleansing wipes
- Toners
- Face masks
- Lip moisturisers
Body care
- Firming/anti-cellulite
body care
- General purpose body
care
Hand care
Skin care
2003
2004
2005
2006
2007
2008
960.0 1,037.3 1,130.8 1,222.5 1,301.9 1,370.0
521.1
577.4
649.6
718.4
776.6
825.5
33.4
42.2
51.5
59.9
67.0
71.1
362.3
373.3
384.2
397.9
411.4
425.9
264.7
270.3
276.7
287.3
299.3
313.1
97.6
22.4
20.8
287.7
15.2
103.1
23.1
21.3
291.7
15.4
107.5
23.7
21.7
296.4
15.7
110.6
24.3
22.0
302.1
16.1
112.1
24.7
22.2
309.2
16.5
112.8
25.1
22.4
318.2
17.1
272.5
276.3
280.7
286.1
292.6
301.1
203.9
209.8
214.2
217.0
214.4
209.0
1,451.6 1,538.8 1,641.4 1,741.6 1,825.4 1,897.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 71 Forecast Retail Sales of Skin Care by Subsector: % Value Growth 20032008
% constant value growth
Facial care
- Facial moisturisers
- Nourishers/anti-agers
- Facial cleansers
-- Liquid/cream/gel/bar cleansers
-- Facial cleansing wipes
- Toners
- Face masks
- Lip moisturisers
Body care
- Firming/anti-cellulite body care
- General purpose body care
Hand care
Skin care
2003-08
CAGR
7.4
9.6
16.3
3.3
3.4
2.9
2.3
1.5
2.0
2.4
2.0
0.5
5.5
2003/08
TOTAL
42.7
58.4
112.9
17.6
18.3
15.6
12.0
7.5
10.6
12.5
10.5
2.5
30.7
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
13. DEPILATORIES
13.1 Sector Performance
2003 headlines
 Women's razors and blades the most dynamic, consequence of the novelty effect
 Impressive growth of depilatories, following the need for convenience
 Indisputable leadership of Gillette, holding the highest share in the fastest growing
subsectors, women's pre-shave and razors and blades.
Women's razors and blades the most dynamic, consequence of the novelty effect
With 7.4% constant value growth, women's razors and blades was the most dynamic
subsector in 2003 but starting from a low base. As a consequence of its recent launch into
the market, there was no history for it over the review period. Products targeted highincome consumers and were expected to increase in sales share in the near future
following the recovery of the economy, income growth and awareness caused by
advertising. Electric depilatories, present on the market at high prices, were expected to
increase sales share and threaten the growth rate of razors, blades and pre-shave
products.
Impressive growth of depilatories, following need for convenience, leads to price decline
Depilatories registered value sales of Leu 88.6 billion in 2003 and they accounted for the
smallest sector within the cosmetics and toiletries market. The small size of the sector can
be explained mainly by the fact that product usage was almost exclusively limited to urban
areas, where tradition of self-usage prevailed, most Romanian women preferring to apply
wax as a depilatory.
The growing cost for attending beauty salons and the need to save time by most working
women was the main determinant for the sector to be the most dynamic over the review
period. Its value share almost tripled over the review period due to the launch of more
sophisticated products, better quality and also more expensive than the traditional cheap
wax. The presence of imported products and price increases were also determinant for
depilatories' growth.
However, low purchasing power led to the increased usage of hair removers/bleaches,
which accounted in 2003 for 47% of depilatory value sales. Value sales remained steady
over the review period and declined by 7.2%, in constant value terms, in 2003 due to
increased usage of cheaper waxes, manufactured locally.
Indisputable leadership of Gillette, holding the highest share in the fastest growing
subsectors, women's pre shave and razors and blades
Gillette was the leading manufacturer in 2003 due to its indisputable dominance of the
women's pre-shave and women's razors and blades. The new concept, the low starting
base, the novelty effect and higher prices made Gillette perform better in value terms than
the well established manufacturers of the more widely used hair removers/bleaches.
After the launch of Gillette Sensor Excel for Women, women's razors and blades emerged
and grew at a high rate. The high initial price and the next following expenditure for
replacements made sales decline. The launch of Gillette Satin Care disposables was well
received by the market due to the low prices and increased awareness due to similitude
with the well-established disposable men razors. Bic also launched in 2003 Bic Twin Lady
disposable razor, competing with Gillette in this fast-growing subsector. The low prices of
disposables led to significant volume growth which in turn led also an increasing growth
rates in 2003 on 2002, by 15% in constant value terms.
If Gillette was leading by far the newly emerged women's pre-shave and women's razors
and blades subsector, the hair removers/bleaches was more competitive, with several
multinationals and domestic producers active on the market. Multinationals accounted for
leading positions in 2001, with Sara Lee's Depilzero and Reckitt's Veet as the leading
brands but they started to loose share in the coming years to domestic players, perceived
as providing good quality at lower prices. Farmec succeeded to take the leadership in hair
removers/bleaches due to strong availability and lower prices compared to imports.
Domestic players were well represented in the subsector, with Gerovital Cosmetics, Miralon
and Gerocossen also accounting for significant shares due to good quality at lower prices
and availability in all the distribution channels. Despite the strong competition from
domestic players, GlaxoSmithKline launched its Strep brand in 2003, but availability
remained limited to supermarkets in large urban areas.
Table 72 Retail Sales of Depilatories by Subsector: Value 1998-2003
Leu billion
Women's pre-shave
Women's razors and
blades
Hair removers/bleaches
Depilatories
1998
-
1999
4.2
6.2
2000
8.5
7.4
2001
15.4
9.6
2002
22.1
12.1
2003
26.4
15.1
11.5
11.5
16.5
26.8
26.4
42.3
36.9
61.9
43.7
77.9
47.1
88.6
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 73 Retail Sales of Depilatories by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Women's pre-shave
Women's razors and blades
Hair removers/bleaches
Depilatories
19.5
24.8
7.8
13.7
1998-03
CAGR
32.6
50.4
1998/03
TOTAL
309.3
669.9
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 74 Depilatories Company Shares 2001-2003
% retail value rsp
Company
Gillette Romania SRL
Farmec SA
Sara Lee Corp
Reckitt Benckiser Romania SRL
Gerovital Cosmetics SA
Miralon Industries SRL
Bic (Romania) Marketing & Distribution SRL
Gerocossen SRL
So.Di.Pro SRL
GlaxoSmithKline SRL
Romira Cosmetics SRL
Cosmetic Plant srl
Genmar Cosmetics SRL
Others
Total
2001
37.1
10.1
13.1
11.3
7.2
4.8
3.0
1.2
0.6
0.6
0.6
10.4
100.0
2002
41.6
10.8
11.6
9.1
6.6
5.1
2.5
2.4
1.0
0.7
0.4
8.2
100.0
2003
40.3
10.7
9.8
9.2
5.1
4.2
3.4
2.1
2.0
1.1
0.8
0.5
0.4
10.5
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 75 Depilatories Brand Shares 2001-2003
% retail value rsp
Brand
Gillette Satin Care
Farmec
Depilzero
Veet
Gillette Sensor Excel for
Women
Depilocrem
Lon
Bic Twin Lady
Gerocossen
Depilsoap
Strep
Royal
Cosmetic Plant
Lovely
Others
Total
Company
Gillette Romania SRL
Farmec SA
Sara Lee Corp
Reckitt Benckiser Romania SRL
Gillette Romania SRL
Gerovital Cosmetics SA
Miralon Industries SRL
Bic (Romania) Marketing &
Distribution SRL
Gerocossen SRL
So.Di.Pro SRL
GlaxoSmithKline SRL
Romira Cosmetics SRL
Cosmetic Plant srl
Genmar Cosmetics SRL
2001 2002 2003
22.4 32.0 34.1
10.1 10.8 10.7
13.1 11.6
9.8
11.3
9.1
9.2
14.7
9.7
6.2
7.2
4.8
-
6.6
5.1
-
5.1
4.2
3.4
3.0
2.5
2.1
1.2
2.4
2.0
1.1
0.6
1.0
0.8
0.6
0.7
0.5
0.6
0.4
0.4
10.4
8.2 10.5
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 10 Depilatories New Product Developments 2002-2003
Brand name
Strep
Depilatory Wax
Company
GlaxoSmithKline
Gerta Prod
Product type
Depilatory Cream
Depilatory Wax
Launch date
2003
2003
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
13.2 Forecast Sector Performance
Euromonitor forecasts depilatories to be worth Leu 89.3 billion by 2008, down by 0.8% on
2003. Decreasing prices are estimated to cause this decline. Meanwhile, the expected
integration into the EU by 2007 will also produce changes in disposable incomes, which in
the case of depilatories will lead to a growing attendance of beauty salons by medium and
higher-income consumers. At the same time, products available in retail channels will
continue to appeal to lower-income women and thus maintain the demand for locally
manufactured cheaper products.
Table 76 Forecast Retail Sales of Depilatories by Subsector: Value 2003-2008
Leu billion
Women's pre-shave
Women's razors and
blades
Hair removers/bleaches
Depilatories
2003
26.4
15.1
2004
28.4
15.7
2005
30.1
16.3
2006
31.7
16.8
2007
32.7
17.1
2008
33.1
17.4
47.1
88.6
44.5
88.6
42.6
89.0
40.9
89.5
39.7
89.5
38.8
89.3
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 77 Forecast Retail Sales of Depilatories by Subsector: % Value Growth
2003-2008
% constant value growth
Women's pre-shave
Women's razors and blades
Hair removers/bleaches
Depilatories
2003-08
CAGR
4.6
2.8
-3.8
0.2
2003/08
TOTAL
25.4
15.0
-17.6
0.8
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
14. SUN CARE
14.1 Sector Performance
2003 headlines
 Despite positive growth, the most dynamic subsector, self-tanning, remains small,
appealing mainly to high-income Romanians
 Value salesof sun care products decline due to increased presence of cheap locally
manufactured products
 Beiersdorf maintains the leading position but looses share to direct sales companies and
domestic players.
Despite positive growth, the most dynamic subsector, self-tanning, remains small,
appealing mainly to high-income Romanians
With an estimated growth rate of 4.1% over the review period, in constant value terms,
self-tanning products was the fastest growing subsector. Starting from a very low base, its
growth was also determined by high prices. Perceived as a luxury product, it appealed to a
very small but loyal high-income segment of the population and sales were limited to very
wealthy people in large urban areas. Awareness remained negligible for most Romanians.
All the brands present on the market were upper-mass or premium because of the low
interest of mass consumers for such products.
Value sales of sun care products decline due to increased presence of cheap locally
manufactured brands
With value sales of Leu 158.9 billion in 2003, sun care was a small sector within the
cosmetics and toiletries market. Although it declined by 12.8% over the review period, in
constant value terms, it performed at a rate of 4.1% in 2003 due to the switch from
multifunctional milks and creams to specialised sun products. The increased presence of
locally manufactured products, cheaper than imports and sold during the summer season
mostly via low margin street stalls on the seaside, led to value decline over the review
period. However, the launch of new diversified protection factor improved formulae also by
domestic players, together with growing perception of sun care products as necessary for
efficient protection led to value growth in 2002 and 2003.
The sea-season for tourism in Romania was still short, starting at the end of June and
ending at the end of August, which was a real problem for the development of the sector.
The absence of advertising was the consequence of the short period for summer holidays,
which cannot create an incentive for manufacturers to spend significant amounts on
advertising, leaving room for small local producers to enter the market with cheap
products.
Sun protection was the largest subsector and better formulae products replaced the
doubtful no-name products especially in this subsector as most consumers started to
consider that it was better to prevent than to cure. As a result, sun protection performed
at a 6% growth rate in 2003, in constant value terms, but sales remained low despite wide
availability and increased awareness of the risks associated with sunbathing.
Beiersdorf maintains the leading position but looses share to direct sales companies and
domestic players
Beiersdorf maintained its leading position in 2003, although its share declined, due to the
high perceived quality of its products, additional features and increased number of
versions with added benefits that customers value. Competition from direct sales and local
companies also strengthened due to the launch of new improved versions, more active in
terms of protection and hydrating features. L'Oréal also had a good presence. New
versions of Nivea Sun from Beiersdorf and Garnier Ambre Solaire from L'Oréal, with
increased protection features led to the good performance of the multinationals in the
latter years of the review period but awareness was very low due to the low interest in
usage of a specific product and brand. Direct sales companies also performed very well but
sales were limited by the short season and low purchasing power.
Farmec, with its Gerovital Plant brand and Elmi Prodfarm with Elmiplant were the most
prominent domestic manufacturers. While Farmec lost some share due to less aggressive
penetration, Elmi Prodfarm performed very well, with share gain, following the launch of
brand extensions with more protection factors and being perceived as providing high
quality at affordable prices.
Other Romanian manufacturers active in sun care- Ariel'91 with Class, Cosmetic Plant, and
Gerovital Cosmetics with its Gerovital H3- performed well due to the fact that low
purchasing power made most imported products unaffordable to large categories of the
population. Although many Romanians still considered that sunbathing was better without
the use of lotions and creams, they generally followed medical advice and protected their
skin, especially in the first days of sun exposure. Price remained the priority in the buying
decision but protection factors and hydrating features contributed to sales growth of
quality products.
Direct sales companies also gained significant shares due to aggressive penetration and
the fact that the direct sellers can emphasise the importance of using these products.
At the end of the review period there was a wide variety of products available, from fakes
to famous brands in a number of presentations; however, there was also a big difference
between availability and demand. This can be explained by the fact that small domestic
companies had good turnovers and profits on short terms and worked according to
seasonality while multinationals were present in this small sector with extensions of their
product lines. Price, purchase and consumption habits and availability prevailed in the
acquisition of a certain brand. Brand loyalty, except for premium brands, was very low.
Sun protection by factor
No significant studies were available for estimations of retail sales of sun care products by
protection factor. All the protection factors were available on the market during the
summer, from IP2 to IP60. Vitamin E, Aloe Vera and Alfa Flavon were the main active
components. All manufacturers recommended that in the first days of sunbathing a higher
protection factor was used, followed by lower. IP2, 4 and 8 were recommended all the time
because of the hydrating effect. Children were recommended to use in the first days of sun
exposure IP 25. The new Garnier Ambre Solaire for Men had IP12.
Sun protection by formulation
There was no study available for estimation of sun care by formulation. Caroten and Alfa
Flavon were present in low protection factors, providing excellent hydrating effects,
Vitamin E was recommended for higher protection, especially for children while aloe vera
formulation was a component of after-sun products.
Table 78 Retail Sales of Sun Care by Subsector: Value 1998-2003
Leu billion
1998
1999
2000
2001
2002
2003
Sun protection
Aftersun
Self-tanning
Sun care
37.1
6.2
1.5
44.8
43.7
8.1
1.7
53.5
62.9
12.4
2.8
78.0
85.4
16.6
3.9
105.9
107.2
19.1
5.1
131.4
132.1
20.4
6.4
158.9
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 79 Retail Sales of Sun Care by Subsector: % Value Growth 1998-2003
% current value growth
2002/03
Sun protection
Aftersun
Self-tanning
Sun care
23.2
6.8
25.5
20.9
1998-03
CAGR
29.0
26.7
33.5
28.8
1998/03
TOTAL
256.5
226.7
323.3
254.6
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 80 Sun Care Company Shares 2001-2003
% retail value rsp
Company
Beiersdorf Romania SRL
Avon Cosmetics Romania SRL
Farmec SA
Elmi Prodfarm SRL
Oriflame Cosmetics Romania SRL
Ariel '91 Laboratories
L'Oreal Romania SRL
Cosmetic Plant srl
Gerovital Cosmetics SA
Dr Soleil Prod Cosmetice SRL
Johnson & Johnson Romania SRL
Estée Lauder Romania SRL
Europharm SA
Genmar Cosmetics SRL
Others
Total
2001
23.4
7.4
13.5
7.1
7.7
4.6
4.1
3.7
2.9
3.2
2.4
0.5
1.3
0.2
17.9
100.0
2002
22.7
8.5
14.2
7.9
6.3
4.8
4.1
4.0
2.3
2.4
1.0
0.6
0.9
0.1
20.3
100.0
2003
20.4
13.6
12.6
10.4
5.2
5.0
4.5
4.2
2.0
1.3
0.6
0.6
0.4
0.1
19.1
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 81 Sun Care Brand Shares 2001-2003
% retail value rsp
Brand
Nivea Sun
Avon Bronze
Gerovital Plant
Elmiplant
Oriflame
Class
Ambre Solaire
Cosmetic Plant
Dr Soleil
Gerovital F2
Company
Beiersdorf Romania SRL
Avon Cosmetics Romania SRL
Farmec SA
Elmi Prodfarm SRL
Oriflame Cosmetics Romania SRL
Ariel '91 Laboratories
L'Oreal Romania SRL
Cosmetic Plant srl
Dr Soleil Prod Cosmetice SRL
Gerovital Cosmetics SA
2001 2002 2003
23.4 22.7 20.4
7.4
8.5 13.6
9.4 10.4 11.0
7.1
7.9 10.4
7.7
6.3
5.2
4.6
4.8
5.0
4.1
4.1
4.5
3.7
4.0
4.2
3.2
2.4
1.3
1.5
1.3
1.2
Creola
Johnson's Sun Care
Clinique
Ephelle
Herbagen
Others
Total
Gerovital Cosmetics SA
Johnson & Johnson Romania SRL
Estée Lauder Romania SRL
Europharm SA
Genmar Cosmetics SRL
1.4
1.0
0.8
2.4
1.0
0.6
0.4
0.5
0.5
1.3
0.9
0.4
0.2
0.1
0.1
22.0 24.2 20.8
100.0 100.0 100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Summary 11 Sun Care New Product Developments 2002-2003
Brand name
Company
Product type
Elmiplant 25
Elmi
Prodfarm
L'Oréal
Emulsion total screen IP 25,
suitable also for children
Sun protection, IP12
Garnier Ambre Solaire for
Men
Launch
date
2003
2002
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews
14.2 Premium versus Mass
Premium products were sought mainly by very high-income consumers, a small but loyal
segment. Due to low consumer purchasing power, they were perceived as 'super luxury'
products. Quality, not price, was very significant for the growth of this segment, with
consumers highly attracted by luxury brand names. Estée Lauder, Bourjois, Givenchy and
Guerlain were the main premium brands on the market.
Upper-end mass included products that target the population with above-average incomes
and were represented by multinationals such as L'Oréal, Beiersdorf with Nivea Sun, Lab
Avene and Johnson & Johnson. Most premium products were self-tanning and sun
protection products.
The traditional mass market segment was the largest and included products that targeted
medium and lower income consumers, manufactured by local companies. There was low
brand loyalty within mass products due to the short season and high price sensitivity.
Table 82 Sun Care Premium vs Mass Analysis 1998/2003
% retail value rsp
1998
3.1
96.9
100.0
Premium
Mass
Total
2003
1.9
98.1
100.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 83 Premium Sun Care Brand Rankings 2003
Rankings
Brand
Clinique
Company
Estée Lauder Romania SRL
2003
1.0
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
14.3 Forecast Sector Performance
Euromonitor forecasts the sun care sector to be worth Leu 217.1 billion by 2008, up by
36.6% on 2003, in constant value terms. The expected integration into the EU will lead to
positive changes in the disposable incomes of the population, that in turn will affect the
sector towards increased usage of better quality products, providing increased protection.
The long sunny periods during the year favour natural tanning and should foster the
development of sun protection products, which were forecast to perform at the highest
value growth rate. Usage of self-tanning products will continue to appeal only to wealthy
people and they are estimated to record the second highest growth rate.
The forecast real growth will be determined more by growth in value terms rather than in
volume terms.
Table 84 Forecast Retail Sales of Sun Care by Subsector: Value 2003-2008
Leu billion
Sun protection
Aftersun
Self-tanning
Sun care
200 200 200 200 200 200
3
4
5
6
7
8
132 141 153 165 178 189
.1 .6 .4 .8 .2 .6
20. 19. 19. 18. 19. 19.
4
7
1
9
1
5
6.4 6.8 7.2 7.6 7.8 8.0
158 168 179 192 205 217
.9 .1 .7 .3 .2 .1
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
Table 85 Forecast Retail Sales of Sun Care by Subsector: % Value Growth 20032008
% constant value growth
Sun protection
Aftersun
Self-tanning
Sun care
200 200
3- 3/0
08
8
CA TOT
GR AL
7.5 43.
5
-0.9 -4.5
4.6 25.
3
6.4 36.
6
Source: Trade press (Capital, Ziarul Financiar, Adevarul Economic, Cosmetica Activa),
company research, store checks, trade interviews, Euromonitor estimates
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