Eastern Europe fails to deliver in 2009: Euromonitor

By Katie Nichol

- Last updated on GMT

Related tags: Eastern europe, Personal care

Eastern Europe was one of the ‘major disappointments’ for the beauty industry in 2009, according to market researcher Euromonitor International.

‘Global trends highlights 2009’ revealed that despite the region achieving value growth of 11 per cent in 2008, this dropped to growth of 4 per cent the following year.

Central and Eastern Europe had been tipped as a market with great potential due to large economic growth in the region and rising consumer interest in increasingly sophisticated cosmetics and personal care products.

Many companies including Beiersdorf, Oriflame and Avon have expanded their footprint in Eastern Europe over the last few years, yet 2009 performance in the region proved disappointing for many.

Despite things looking up in the fourth quarter of last year, Avon recorded a 13 per cent drop in annual sales in the CEE region. Beiersdorf fared slightly better, with its consumer business segment posting slight growth of 1.7 per cent in Eastern Europe, yet this region was significantly outperformed by all of the company’s other strategic growth markets.

According to Euromonitor, the dip in sales growth of cosmetics and personal care products across Eastern Europe in 2009 was mainly caused by decline in discretionary beauty spending in the Russian and Ukrainian markets, which were particularly hard hit during the recession.

Eastern Europe is expected to achieve ‘modest’ levels of growth over the next five years, the company said.

Japan slow to recover from recession

Japan also experienced a drop in sales growth in 2009, with the categories of skin care and colour cosmetics being particularly affected.

Euromonitor said that the decline in percentage terms the country experienced last year is expected to continue, with a decrease of $2bn (€1.54) predicted between 2009-14.

The US market for cosmetics and personal care also suffered in 2009, particularly in the prestige sector, and Euromonitor expects it to stagnate in terms of absolute growth over the next four years, achieving growth in the region of just $7m.

Brazil and China are star performers

Despite the tough economic climate, several markets posted sales growth, with Brazil and China topping the list, according to Euromonitor.

One of the fastest growing beauty industries in the world, and the third largest globally, Brazil’s sales increased 14 per cent in 2009 to hit an estimated $29bn. Driving sales is a rise in disposable income reflected by a new breed of middle-class consumers, the market researcher stated.

Fragrances and sun care are among the fastest growing sectors in a market that is expected to be worth over $35bn by 2014, Euromonitor predicted.

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