Cosmetics And Toiletries in Croatia
Euromonitor International's Cosmetics And Toiletries in Croatia market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 13 | Publication date: Nov 2006
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Executive summary
Purchases exceed available income
Even though most global brands of all sectors are available on the market, low priced products such as private label saw increased demand last year. Despite this, the market for cosmetics and toiletries saw an overall value increase of 11% in 2005. Growth varied in different sectors, mostly due to the fact that the market is not saturated and there is still room for growth, as in most transition economies. When looking at the country as a whole, Croatia’s low purchase of cosmetics and toiletries, of HRK352 per person each year, comes as a shock. When looking at some of the shopping trends of the people, especially in the capital, Zagreb, and its small, but privileged class of wealthy people, the picture is quite different. The fact that the purchase of cosmetics and toiletries is higher than official statistics show is also evident by the fact that the total market’s value in 2005 was HRK1,565 million, higher than in many transition economies. Such a high value cosmetics and toiletries market can be explained by the fact that the premium segment accounts for around 11%, which relatively is high for such a small and economically unhealthy market. It is also attributable to the trend of consumers buying more than they can afford, a habit of many Croatian consumers, in a population that is heavily indebted.
However, this is still not representative of the entire country and around 20% of the population can still only afford the cheapest and most basic products. The future of all markets, including cosmetics and toiletries, depends on the country’s economic development, which was in the doldrums at the end of the review period. Unemployment and high prices, combined with low wages and a lack of investment, will remain a problem over the forecast period. This may change when the country accedes to the EU. In the meantime, Croatian people, on the whole, will continue to purchase relatively low amounts of cosmetics and toiletries. However, the fact that Konzum, the biggest Croatian supermarket chain, established throughout the review its own cosmetics and toiletries chain, Kosmo, promises some growth over the forecast period.
Direct sales companies continue to be popular
The main reason for the success of direct sales is that these companies have very good distribution systems and easy access to consumers in remote places, especially companies such as Avon and Oriflame. As opposed to the main towns, some places in Croatia do not have a well-developed distribution and access to cosmetics and toiletries, especially on the islands, and in the less developed towns. Direct sales companies reach their consumers in every village or island, and at a fast pace, as well offering much lower prices. In such areas, very often the consumers of Avon and Oriflame become their sales people, which, in times of high unemployment in such areas, increase direct sales companies’ popularity. Croatian consumers consider Avon to be stronger in skin care and fragrances than in colour cosmetics, where Oriflame is considered to offer better choice.
New suburban supermarkets increase private label demand, but share still low
The top three supermarket chains, in order of number of visitors, are Konzum, Getro, and Kaufland. These are at the same time the three cheapest brands, and offer private label. The most popular cosmetics and toiletries shop, Drogerie Markt, was the first chain in Croatia with private label such as Balea and Baby Love. In 2005, according to the industry estimates the share of private label on the market for cosmetics and toiletries was around 5%, due to large supermarket chains, all of which introduced private label by the end of the review period, overtaking independent shops. However, this is very low compared to Western European countries. This is because consumers are still sceptical of the quality of private label and prefer purchasing products they have tried and know to be effective. However, it is noticeable that private label is available in all sectors, including oral hygiene and deodorants.
Premium brands grow despite economic difficulties
Consumers must still visit numerous perfumeries and high class shops in order to purchase premium products and fragrances, which are almost exclusively reserved for a wealthier class in the main towns. There are a high number of premium perfumeries, which include Limoni, Iris, Muller, Estetic Uvema and Martinex, with a high turnover and high sales targets. These shops represent all main premium brands, the most important sectors being skin care, colour cosmetics, and fragrances. The most popular brands include Chanel, Christian Dior, L’Oréal and new premium brands such as Sisley and La Prairie became popular over the review period.
There is no brand loyalty in skin care and colour cosmetics
Premium colour cosmetics and skin care are reserved for women aged 30–50, however the upper age limit is expected to extend to 60. Premium colour cosmetics and skin care are still not well developed, and women often shift from brand to brand in order to satisfy curiosity and find the best product or brand, as opposed to the mid range – economy pricing segment consumers - who are less prone to shifting brands after finding a good product. Consumers, especially female, often switch from brand to brand in order to try something new, or because they are not sure what type of skin they have, which is a result of untrained sales people, lack of consumer knowledge, or hurried shopping. Lancôme seems to have most customer loyalty because their products are suitable for all skin types. Shops where staff receive training to find the most suitable product for their consumers will gain popularity over the forecast period, and by training staff and consumers, premium brands will be able to gain market share.
Table of contents
COSMETICS AND TOILETRIES IN CROATIA : MARKET INSIGHT
1. EXECUTIVE SUMMARY
2. COSMETICS AND TOILETRIES SALES
2.1 Market Performance
Table 1 Retail Sales of Cosmetics and Toiletries by Sector: Value 2000-2005
Table 2 Retail Sales of Cosmetics and Toiletries by Sector: % Value Growth 2000-2005
2.2 Competitive Environment
Table 3 Cosmetics and Toiletries Company Shares by Retail Value 2001-2005
Table 4 Cosmetics and Toiletries Brand Shares by Retail Value 2002-2005
2.3 Leading Company Profile – Avon Kosmetika doo
Summary 1 Avon Kosmetika doo Operational Indicators 2004
2.4 Leading Company Profile – Beiersdorf AG
Summary 2 Beiersdorf AG Operational Indicators 2004
2.5 Leading Company Profile – Johnson & Johnson Inc
Summary 3 Johnson & Johnson Inc 2004
2.6 Leading Company Profile – Procter & Gamble Co, The
Summary 4 Procter & Gamble Co, The: Operational Indicators 2004
2.7 New Product Launches
Summary 5 Major New Product Launches 2004-2005
2.8 Retail Distribution
Table 5 Retail Sales of Cosmetics and Toiletries by Distribution Format: % Analysis 2000/2005
Table 6 Retail Sales of Cosmetics and Toiletries by Sector and by Distribution Format: % Analysis 2005
2.9 Retailer Activity and Private Label Trends
2.10 Forecast Market Performance
Table 7 Forecast Retail Sales of Cosmetics and Toiletries by Sector: Value 2005-2010
Table 8 Forecast Retail Sales of Cosmetics and Toiletries by Sector: % Value Growth 2005-2010