Ukraine hair care market reports strong growth
more reason for the increasing importance that emerging
markets such as this are playing in
international cosmetic manufacturer's strategies.
According to a review by cosmetic expo media the overall hair care representation at the recent fifth international perfumery and cosmetics InterCharm Ukraine event was strong - highlighting the growing emphasis that is being placed on this sector of the personal care industry there. Data from Euromonitor International has shown that the growth rate of salon hair care market alone increased approximately 11.6 per cent from 2004 to 2005, with the sales volume of hair care products being sold reaching $1,406m in 2006. The main driver of exports to the professional hair care market in this region is in fact Italy, with the country representing 35 per cent of the overall market. Following Italy is Germany and France, which allegedly make up 15 per cent. L'Oreal Professional, Wella Professional and Schwarzkopf Professional have taken the leading positions in terms of representative offices in the region. The Ukraine was a significant region for L'Oreal in its Q1 sales report, helping to drive the boom in the Eastern Europe segment, which reported a huge 30 per cent like-for-like sales increase from €214mn to €289mn. Likewise for the company's 2006 report stated that the strongest growth was found in the Eastern European region, where sales increased 22 per cent to reach €850m. This figure was driven by an exceptionally strong performance in Russia, supported by the company's newly created Ukraine subsidiary. The recorded sales growth is no doubt thanks in part to the increased consumer power of the region, which is being driven by a thriving economy and increasing GDP. Gwenael Joseph, company analyst for Euromonitor told CosmeticsDesign-Europe, "In Russia, according to official statistics, consumer expenditure is expected to continue growing by seven to eight per cent every year, while average wages are expected to rise by an annual ten to twenty per cent." However, despite the reported importance of the large multinationals in this emerging market, industry expects are warning them to 'local' with marketing campaigns in order to maintain consumer loyalty. Market analysts Euromonitor has stated that in order to maintain a strong lead within the emerging markets, multinationals should continue looking for local investments - benefiting from the cultural knowledge and consumer loyalty these brands bring. Joseph said, "Fierce competition in the emerging markets is leading large multinationals to not only launch their existing brands into new markets, but also to acquire successful local brands".