Premium Beauty and Personal Care in Croatia

PROSPECTS

Consumers appreciate premium products

Croatian consumers traditionally show an affinity for premium products – although they sometimes tend to overstretch themselves by going above their budgets. This is good news for manufacturers of premium beauty and personal care products, which are taking advantage of the situation.

The premium segment sees the best historical results, but is not stopping

As opposed to mass beauty and personal care, premium beauty and personal care has seen its value sales reach unprecedented levels – it has even surpassed the benchmark of 2008, which was the year with the highest spending before the credit crunch kicked in. The fact that buyers of premium products are usually from the higher-income group, which did not have to adjust their spending as much, resulted in a smaller downwards trend for premium beauty and personal care over the review period compared with mass, which suffered much more.

Twofold driving forces behind premium products

There are two groups of consumers which are leaning towards purchasing premium products. The first (and much bigger) group is concerned about status and social relations, and buys for prestige.

COMPETITIVE LANDSCAPE

Local manufacturers have something to offer

Exactly in the spot where brave new ethical buyers have appeared is the hunting ground of new emerging local companies. They have recognised their frame of opportunity in the returning trend of going retro.

L’Oréal builds its strength in the premium segment

The overall leader in beauty and personal care in Croatia in value terms, L'Oréal Adria, has built its overall market approach on leading in the respective categories in which it is active. With undisputed leadership in the premium categories in which it is present, the company has managed to gather enough share to hold the overall lead in value terms, because of the high prices of premium beauty and personal care products.

The competitive landscape moves towards consolidation

With the above-mentioned lack of competition in premium beauty and personal care, potential new entrants are not motivated to enter the fight, but are rather discouraged by the already cemented positions of the existing players and the current level of consolidation. This means that the leaders are able to squeeze the remainder of players even further out of the game.

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