Hungary's cosmetic and toiletry market to grow
grow by a further 33 per cent, predicts Euromonitor. Accession into
the European Union this week and increased capacity for consumer
spending will boost the country's sales, writes Louise
According to the report, each area of the market experienced positive value growth in 2003 but performance varied due to different levels of dynamism.
Information collated during the review showed that colour cosmetics and skin care products expanded significantly, by 12 per cent or more in constant value terms during 2003. Deodorants also saw high constant value growth in 2003 due to greater usage among men, achieved in part by extensive TV and billboard advertising campaigns. Baby care products, sun care and hair care, however, performed relatively poorly, with constant value growth of five per cent or less in the same year.
Growth in dynamic categories such as skin care and colour cosmetics were characterised by consumers trading up from economy to upper-mass ranges and growing demand for premium products in more affluent areas. Visiting upscale perfumeries on a weekly basis is popular among Hungarian women, especially in urban areas.
There were no significant changes in terms of market positions and the order of the leading companies. The top five players in the market, Unilever, Avon, Procter & Gamble, L'Oréal, and Beiersdorf, accounted for 50 per cent of overall value sales between them in 2003, creating a relatively competitive environment in the majority of product areas.
In 2003, as over the review period, Unilever was the leading player in the cosmetics and toiletries market in Hungary, and gained share on the previous year. Unilever's dominant position was due mainly to its strong presence across most product areas, wide brand portfolio and very strong advertising support. Image and brand awareness were especially characteristic of cosmetics and toiletries; Western players and their products dominated sales throughout the market. Foreign companies accounted for more than 90 per cent of total value sales at the end of the review period, and the share of most local companies declined steadily between 1998 and 2003.
For the first time over the review period, supermarkets/hypermarkets surpassed the pharmacies/drugstores channel as the single most important retail channel in the distribution pattern of cosmetics and toiletries.
Large grocery outlets registered the largest increase, due mainly to the fast expanding network of hypermarkets, while the share held by department stores showed significant decline. Pharmacies and drugstores ranked second in the distribution pattern of cosmetics and toiletries at the end of the review period.
Direct sales consolidated its position, and companies offering relatively high-quality goods at competitive prices expanded their product ranges and entered new areas of the market. Specialist stores such as Douglas, Marionnaud, Yves Rocher and Lush Cosmetics are playing a greater role, with their share increasing, especially in colour cosmetics, fragrances and skin care.
The cosmetics and toiletries industry has a bright future in Hungary due to increased consumer spending capacity and changing lifestyles. Hungary has just joined the European Union and plans have already been laid for the country's entry to the Eurozone in 2008, which should give a further boost to the economy.