Beauty products
With each year nonpharmaceuticals range of pharmacies in Russia is expanding. On the one hand, it may be explained by market logic, as namely parapharmaceutical goods, with are not accompanied by a limited margin, allow pharmacies to earn more. On the other hand, namely cosmetics with continuously expanding product line can improve customer loyalty, because after getting good advice and making a successful purchase, he will certainly want to return to a specific pharmacy.
In connection with this, new beauty product stands appear annually in pharmacies chains with expanding range of brands and individual lines targeted to address those or other problems. In pharmacy chain “Rigla” there are successfully functioning pharmacies with the centers of active cosmetics, which are now called Beauty Studio. No less actively develop the Studios of Curative Cosmetics CosmeticProject opened in St. Petersburg by pharmacy chain “First Aid”. Pharmacy chain “A5” holds regularly weeks of beauty contributing to the informational promotion of the known and new brands of pharmaceutical beauty products.
Let us look at the situation on the market of pharmaceutical beauty products in numbers. According to the results of 2013, pharmacy beauty products rank third (after drugs and nutritional supplements) in the pharmacy sales structure and first in the structure of parapharmaceutic product groups. The share of this segment amounted to 4% of the total pharmacies sales and 35% of the total parapharmaceutic sales.
In 2013, the volume of pharmaceutical beauty products sales exceeded 24 billion rubles or 200 million units.
We can confidently say that the market of pharmaceutical beauty products is going through a phase of stable growth of demand – sales volume in rubles has significantly exceeded pre-crisis levels. Let us remind that in the period of economic instability the demand for beauty products reduced at most among the whole pharmacy parapharmaceutic product range. According to the results of the last year, the dynamics of pharmaceutical beauty products sales approached the dynamics of drug sales, which also testifies the positive changes in the market. The consumer is gradually turning away from the stereotype that in the pharmacy you can and should buy only medicine. Cosmetics become not only accompanying purchase, but also a key objective of the visit to the pharmacy.
According to the results of 2013, sales growth of pharmaceutical beauty products in rubles amounted to 8.5%. Compared to this, in 2012 a growth was also recorded at the level of 6.3% compared to 2011.
There is no official classification of beauty products in Russia; however, depending on the purpose, effect and price, all beauty products can be divided into three groups: active (medicinal) beauty products, mass market beauty products, and selective beauty products (Premium and Deluxe class). We have to note that the division into these groups is conventional and subjective. Active (medicinal) beauty products are used for treatment and prevention of certain diseases, contain various biologically active substances. Medicinal beauty products include such brands as Sofia (creams and balms), Boro Plus creams, etc.
Mass market beauty products are cosmetics available to most consumers, designed for skin, hair and nails care. They are available both in pharmacies and other retail outlets (supermarkets, specialized stores, etc.)
Such beauty products usually do not include any selective preparations eliminating specific problems, such as acne. Mass market beauty products include the goods of such manufacturers as, for example, Garnier Laboratories, Nivea.
Selective beauty products (Premium and Deluxe class) – elite, prestigious beauty products, in which more often appear cosmetic lines designed to certain skin or hair condition. In general, these products are expensive (approximately from 800 rubles per unit), and are sold mostly only in pharmacies. For example, a manufacturer of selective beauty products is Vichy Laboratories.
Among the three types of goods, only the segment of medicinal beauty products demonstrates the growth both in money terms (+18%) and by units (+4%). For the first time in several years the segment of selective beauty products shows consumption growth: +1% in units and +5% in rubles. Earlier, the premium sector of pharmacy beauty products market has reduced annually. Such a positive trend can be explained by increased customer loyalty exactly to expensive pharmacy beauty products (spread of belief that a highly effective product from the pharmacy can not be cheap) and increased activity on the part of manufacturer (emergence of new cosmetics and product lines, high promotional activity, etc.).
According to the results of 2013, the demand for mass market beauty products decreased by 3% in rubles and by 7% in units. This is also a new trend, as it is the lower priced beauty products sector that grew pretty confident in the previous two years.
Beauty products sold through pharmacies have a wide price range - from cheap costing about 10-15 rubles (soap, wet wipes, cheap domestic hand cream, etc.) to very expensive, which may be priced over 15,000 rubles per unit. According to the results of 2013, the weighted average cost per unit amounted to about 122 rubles (increase +10% compared to 2012). The most significant increase in the weighted average unit cost (from 95 rubles to 108 rubles) was observed in the segment of medicinal beauty products. The segment of selective beauty products showed the growth by 4% (according to 2013, the weighted average cost amounted to 654 rubles), and the mass market beauty products rose by an average of 5% (weighted average cost of unit was 76 rubles).
Proportion of three types of beauty products has experienced a little change – the share of medicinal beauty products segment has increased in value terms and amounted to 48% in 2013 (in 2012 – 44%). The share of mass market segment decreased by 3% over the year and amounted to 26%, and selective beauty products lost 1% of the market (the share of this segment is 26%). In terms of units, the premium and luxury beauty products take only 5% due to the higher price. Market shares of mass-market and medicinal beauty products in unit terms dispensed as follows (41% and 54% respectively).
Production of Russian manufacturers enjoys higher demand than that of foreign companies and covers nearly 66% of real sales volume. However, imported beauty products are observed to prevail in sales value (about 60% of sales).
Within the segments the domestic and foreign beauty products ratio is different. In 2013, selective beauty products are 100% imported beauty products. Domestic companies are not yet able to compete with foreign manufacturers in this segment. In the mass-market segment, as in the past year, the domestic beauty products are ahead of the imported by the number of units sold (62%). Foreign brands retained the advantage by sales value (54%).
In the segment of medicinal beauty products domestic brands are leaders both by sales value (59%) and sales volume (74%).
The pharmacies mainly sell “universal” beauty products designed for any consumer – in sales volume it covers 75% in money and 79% in units. The second place is occupied by children cosmetics, 9% of value and 15% of real sales. The third place belongs to “middle age (after 25 years)” beauty products. In this category, there is a certain advantage of expensive cosmetics (if in money the segment’s share is 6%, in units it is only 2%) – more than 80% of this category accounts for selective beauty products. The fourth place belongs to cosmetics for people older than 45 years (5% in value of consumption and 1% in real sales). According to the results of 2013, the share of beauty products for young and youthful age amounted to 2% – in rubles and 1% – in units. Besides, in comparison with the last year, the share of the male beauty products has decreased significantly.
As in previous years, VICHY brand tops the selective beauty products ranking (Figure 31). Compared to 2012, this brand sales increased by 1%, and its share declined by 2%. Negative dynamics in TOP-10 also shows brand LIERAC (-14). All other brands increased both in volume and in share. We shall note the growth in sales and share of LA ROCHE-POSAY – this mark relates to manufacturer L`OREAL (as well as VICHY). Therefore 2 brands collectively occupy 64% of the market value, which is equivalent to the share covered by the brands in 2012. It should be noted that the third consecutive year LA ROCHE-POSAY is ranked second in the ranking, and according to the results of 2013 the market share covered by beauty products of this French brand rose by 2%, which is a record for TOP-10 leading brands.
Among the brands ranking from 3 to 10, it is worth noting BIODERMA, FILORGA, DUCRAY – compared with 2012 the sales of these brands grew by 20%, 22%, and 20% respectively. Record growth among TOP-10 selective cosmetics brands was demonstrated by NUXE (+48% to the sales level of the previous year).
The composition of ranking in 2013 is different from 2012 by one player. High growth rate allowed NUXE to take the 10th place. At the same time ROC brand has left the ranking – its volume fell by 73% over the year.
Brand LOSHADINAYA SILA stepped to the first place in the ranking of the mass-market beauty products in 2013 (Fig. 32). The brand specializing in cosmetic products for children, JOHNSONS BABY, dropped to the second place. The third place in the mass-market ranking belongs to CONTEX. There are three brands among the domestic brands in the mass-market ranking – NATURA SIBERICA, LOSHADINAYA SILA and KORA. It is noteworthy that in previous years usually only one brand managed to get into TOP-10. All three Russian brands included in the ranking of 2013 showed an increase in sales – LOSHADINAYA SILA added 6% to the sales level of 2012, pharmacy sales of NATURA SIBERICA increased by 4%, while sales of KORA cosmetics increased by 18%.
Besides three domestic brands, sales growth was seen in brands CONTEX and NEUTROGENA (+25 and +17% respectively). The demand for other brands from TOP 10 in mass market segment in 2013 decreased: JOHNSONS BABY (-1%), NIVEA (-10%), UMNAYA EMAL (-10%), STYX (-31%), and FLORESAN (-3%).
The leader has changed in the ranking of medicinal beauty products – domestic brand SOFIA yielded the first place to LOSHADINAYA SILA (Fig. 33). This was contributed by almost two-fold increase in sales of LOSHADINAYA SILA that has three body remedies in the segment of medical cosmetics. The sales of SOFIA also increased in 2013, but much more modest – by 7%. Brand DRY DRY, which includes the remedies from excess sweating, takes the third place in the ranking (sales growth over the year was 26%).
The maximum growth in rubles among the TOP-10 brands is showed by MYCOSAN (more than 1000% growth). Cosmetic set for fungus treatment under the brand MYCOSAN appeared in pharmacies only in 2012, and in 2013 has already entered the TOP-10 of mass market brands.
2013 for pharmacy beauty products passed under the trend of growth in demand for more expensive brands of selective and medicinal cosmetics. The sales of mass-market beauty products in pharmacies have decreased for the first time over the past few years. Domestic brands began to win their consumer by taking an increasingly prominent market shares. It should be noted, however, that this applies only to “low-end” mass-market segment. Exactly the inexpensive beauty products showed notable gains in sales – brands LOSHADINAYA SILA, NATURA SIBERICA, KORA, etc.
The segment of selective beauty products showed strengthened positions of the known brands LA ROCHE-POSAY, BIODERMA, AVENE and others, in the segment of medicinal beauty products the confident leaders are LOSHADINAYA SILA, SOFIA and DRY DRY.