Traditionally Russian women pay a lot of attention to their looks and wear makeup more often than many westerners do. This fact together with rapidly increasing number of specialized cosmetic stores chiefly contributed to better colour cosmetic distribution and impressive sales growth in the past three years. In 2005 makeup products sales may put on 14% to reach $1’230mln. Some experts appear more pessimistic, though, and predict the market to show the first signs of slowing down. Indeed, the major demand seems to be fulfiled. Nevertheless, the market potential is far from being exhausted.
Further development depends much on new megamolls construction, retail proliferation in the regions and innovative formats of trade. Marks & Spenser, Auchan outlets as well as divaricating Arbat Prestige, L’Etoile, Sephora and concept stores like Makeup Station form a sophisticated colour cosmetics offer and fuel both value and volume growth of the segment.
At present 83% of retail sales fall on specialized perfumery and cosmetics stores, while 13.5% of retailed colour cosmetics is distributed through open markets (ACNielsen). At the same time direct sellers are quite strong in the segment. Avon, Oriflame, Mary Kay and Faberlic hold about 45% of the total colour cosmetics market (Euromonitor). Moreover, Oriflame, Faberlic and Avon are the top three most popular massmarket makeup brands (by value of sales). In premium level Christian Dior is the leader by sales volume, while Chanel holds the second place. L’Oreal is the unbeatable leader in middle-price retail segment for the past several years. The fast growth of specialist outlets highly contributed to the growth of premium products, as these are the major distribution channel for exclusive cosmetics.
About 80% of Russian women aged between 16 and 55 regularly use colour cosmetics (Comcon Pharma). Researches indicate that lipstick is still the leading makeup product for Russian women. Lip products are the most significant in colour cosmetics accounting for about 33-41% of value depending on a source. The majority of women (about 60%) prefer moisturising lipstick. Local climatic conditions directly influence this consumer choice. Most women also prefer to use moisturising lipstick rather than a lip balm. Lipstick giving more volume to lips is also popular.
Eye makeup is the second best seller after lip products. Mascara forms the most significant eye make-up and accounts for about 45% of eye makeup value. Over 75% of women wear mascara every day. Most women regularly use mascara even if they do not use any other eye makeup.
Russians love experimenting and are fascinated by everything new. Declaration of innovative technology guarantees consumer interest, though loyalty to new products remains extremely low. For example, double-spiral lip-gloss, actively advertised by many international companies, enjoyed very dynamic development in 2004, though in 2005 its popularity gradually fade. In the period January-September 2005 the Russian market saw over 30 colour cosmetics novelties. The majority of them are of foreign origin. Though Russian companies didn’t stay still. Divage rolled on FleXtreme, a varnish claimed to have stretch feature. Formula containing elastan is positioned to provide special plasticity. CieL Parfume, a Russian manufacturer and direct seller specializing on perfumery, turned to colour cosmetics to spur sales and launched six nail care products. The company claims its nail innovations are made on completely natural basis. Mirra Lux, a skin care manufacturer, for the first time entered the market with a line of decorative cosmetics. The line includes 15 make-up products for the face, eyes, lips, nails and as underlined by the developers, it is an optimal supplement to Mirra Lux skin care line products.
Remarkably, Russian women are not used to makeup foundation. They buy powder but not liquid foundation. This product is practically not manufactured in Russia, while imported foundations are considered to have inappropriate structures and tones for Russian skin. The market is evidently needs time and a series of active educational campaigns to change the situation.
Experts hope facial makeup will see the most dynamic development in future. Liquid foundation will enjoy a better acceptance and less expensive products will become available, boosting consumer interest. Pressed powder is expected to continue to prevail.
Thought lip product and eye makeup will probably remain the lion’s share of colour cosmetics market. Lipstick is expected to remain the most often worn make-up and will remain present not only in younger consumers' make-up bags but also will be often used by older women. Eye makeup growth will be still driven by mascara sales. The slowest to increase will nail products, which will see just over 2% of annual growth.
Direct sales companies are expected to continue to flourish and shape consumer trends. However, other branded products will become more important as consumers become more aware of brand names. Chained specialist outlets will play a crucial role in the growth of premium and upper mass-market colour cosmetic sales.
