The area recorded weaker sales in 2013 than the year preceding it: this compares unfavourably with the strong recent growth seen in Western Europe, which is helping in particular to fuel the global rise of the affordable luxury category.
Disquiet in Ukraine has been called up as feeding into the recent instability for the region, with the European Bank for Reconstruction and Development (EBRD) stating recently that the tension is now; “threatening to slow down the recovery in the wider EBRD region – or even bring it to a complete halt.”
Despite the recent slowdown though, while the coming year’s growth will be modest, the forecast ahead for cosmetics in Central Europe is promising, according to the study’s analysts: “In 2014 the growth rate should increase to 2.8%, while in the following years the market is predicted to develop at a pace of 4-5%.”
Spotlight on the region
The report revealed that within Central Europe, the Czech Republic boasts the most developed cosmetic market with the highest market share, and Bulgaria the least.
Sales in the region are driven by consumer enthusiasm for international brands, with dm and Rossmann highlighted by the report as customer favourites; domestic brands currently do not fare particularly well, with only the Czech Republic and Bulgaria listing a domestic brand among their top three.
Opportunities for growth
The analysts highlight that there are multiple avenues opening up which the industry can look to exploit, stating that within retail, “sales of cosmetics should be driven by the expansion of cosmetics chains, the growing popularity of online sales, new product launches.”
The report also highlighted an “ageing society that requires more advanced products”, and “growing demand for natural cosmetics” as two key growth drivers.
Discounts are seen as a key element in retail choices for consumers in the region, the report notes, signalling that consumer demand for luxury brands is still a way off.