Seminar Professional cosmetics market in new environment held during INTERCHARM professional in Moscow in April painted the picture of Russian beauty salon industry and added a real value to the exposition.

Below are some main tendencies prevailing in the market:

• According to Euromonitor, professional cosmetics market equals to 10% of the total Russian perfum-ery and cosmetics market – some USD1.3 bln and will demonstrate positive growth in the next years;
• Russian salons’ clients still believe in better quality of foreign brands. 90% of the market accounts for import products. But Russian manufacturers started to put on the market qualitative professional cosmetics which can compete with foreign brands. INTERCHARM professional presented these progressive brands;
• Irregular growth of the sector in Russian regions in 2011: from 0.8% in Central District to 22.4% in North Caucasus District;
• Unsatisfied demand in professional skin care at reasonable prices;
• The word-of-mouth promotion is traditionally high, thus most beauty salons’ clients purchase professional products advised by their master to use at home.

Like no other event, INTERCHARM professional helps the staff of beauty salons, clinics and distributing companies to grow professionally. In fact, the event is not just an exhibition of products for health and beauty and a number of associated activities: the event has its own infrastructure, its own platform on which all the achievements of the industry are based.

39 239 of cosmetologists, dermatologists, nail service specialists, hairdressers, masseurs and had the unique opportunity to plunge into the universe of Russian and foreign innovations in the industry within the three days of spring INTERCHARM professional – the leading event of salon industry in Russia and the CIS, which took place on April 19-21 in Moscow Crocus Expo.

One of the recent surveys showed that 83% of visitors expected this exhibition to present new products, new suppliers, and new ideas for further professional growth. According to visitors, many of them trust new products and services only after visiting the exhibition. 400 exhibitors, who presented some 2,500 brands of professional cosmetics, numerous free workshops, shows, free presentations, and demonstrations of new procedures and techniques, provided all the necessary information to the professional community. Visitors’ satisfaction with show results grew by 9% and reached 77%. 64% of specialists established new business contacts with exhibitors.

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Male grooming sector has been climbing up sharply over the past two years.  Russian men tend to pay more and more attention both to traditional cosmetic products and special products for skin or hair care.  Currently, all mass cosmetic brands offer special man series.  Global international players have been exploring this segment for a long time; therefore they are often trend-setters for innovation.

Face of Male Consumer

“Some time ago Russian men used makeup very scarcely, believing than it was a woman “job”, - states Eugenia Pudikova, Head of Marketing and PR Department in Eco-cosmetics (distributor of Lavera organic cosmetics). – Today, more and more cosmetic companies roll out special series for men.  Men began to care for themselves, basically on the wave of media push and advertising campaigns.  Mass media has eliminated the psychological barrier in man’s brain and now more and more Russians look for cosmetics.  Whereby five years ago men were interested just in shower gels or colognes, now the preferences of the stronger half vary: they need creams for the hands/feet, cream for/after shave, lotions, balms, scrubs or toners”.

Actually male grooming products became a separate market segment in early 2000s.  In 2010, ac-cording to RBC data, it accounted for 10.1% (including sales of razors and blades).  Worth noting that in 2010, sales of man perfume totaled to approx. $670 million, or 25.4% of the aggregate sales.

The Russian male is more conservative versus his European mates.  However, in recent years, the preferences of Russian men tend to match the global trends, whereby the Russian consumer be-comes more particular about his preferences.  Over the past five years Russia has seen an upturn in male cosmetics segment, averaging to 10-13% per year.

Main choice drivers in Russia signal a new emerging consumer culture of middle-class.  The top places are strongly occupied by the fragrance factor (85-90% of choice is based on product aroma within all product groups), formula (60-75%) and brand awareness (70-75%).

Luxury Splendor

Most Russian men are reluctant to spend big money on cosmetics, however when choosing skin-care aids, they prefer more expensive imported products.  In this regard experts assert that the main surplus in coming years will be gained thanks to middle-up and luxury market segments.

Today, male premium cosmetics is extremely popular with anti-age agents in the lead, particularly those that can eliminate traces of busy life: dark circles or puffiness under eyes.  Men of 35 or younger are the most agile cosmetic consumers.  The selective cosmetics market for men is enlarging with new players.  On top of Biotherm, Lancome and Shiseido men series, such exclusive brands as Nickel and Thalgomen have won a firm stand here in Russia.  However, these are niche brands whose marketing is focused at specific sector of male audience.

The Russian market of male beauty is young; therefore, huge advertising budgets and aggressive PR-campaigns are absolutely essential to enter it so as to build customer loyalty and to develop relevant consumer culture.  Although it should be noted that the background for market devel-opment has been laid already, and manufactures understand the novelties that it is waiting for. 

Luxury cosmetic for men is stand alone category; perfume and cosmetics stores dedicate whole departments or corners for male brands.  Today, practically all cosmetics brands have their own series, whereby cosmetic and perfumery stores combine these series into individual stands to facilitate shopping for men.
 
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In 2012, the Federal Service of Russian Federation on Customers’ Rights Protection and Human Well-being Surveillance (“Rospotrebnadzor”) plans large-scale monitoring of all nano-cosmetic products being on sale within Russia.

The anti-aging cosmetics containing nanoparticles, whose effect is being discussed and sometimes challenged, caused reasonable and close attention on the part of the above service. Currently, 367 nano-patents are registered with over one thousand state-of-the-art cosmetics products on sale. Till now, there were no targeted clinical studies for such products in Russia. Hence, dishonest manufactures could freely and illegally tag their products with “nano” in order to push their sales up.

Tatiana Puchkova, Master of biological science, Board Chairman of Perfumery and Cosmetics Association of Russia acknowledged that some companies successfully rename their cosmetic products containing small liposomes into nano-creams. Another serious challenge - numerous fakes imported from China.

As early as in summer 2012, we can expect a new regulation for nano-cosmetics mandating laboratory attestation of such products efficiency and safety.

According to past year results, otoplasty for European eyelid reshaping has become the most popular plastic surgery trend in Kirghizia.

With reference to Musa Mateev, cosmetic surgeon of a Bishkek clinic, the information agency «KirTAG», asserts that Asian women’s anxiety to change their natural eye shape is triggered by celebrity worship syndrome and desire to imitate so that to match international beauty standards.

European eye reshape otoplasty costs RUB 35-40 thousand in Kirghizia. Depending on each particular case, experts employ either blepharoplasty, canthopexia (eyelid lifting) or canthoplasty (eye reshaping by correction of corners).

The fashion for blepharoplasty has come to Kirghizia from China where the boom for the European appearance burst out several years ago. The demand for such cosmetic surgery is attributed to higher living standards and striving for better appearance.

According to retail audit of Dietary Supplements (DS), volume of DS sold in retail at drugstores as per results of 2011 three quarters, reached USD440 mln in terms of wholesale prices and USD599 mln in terms of retail prices.

On the average, the Russians spent USD 4,37 on DSs over the period (versus USD 3,66 YoY 2010).

Evalar company remains to be the DS market leader as per results of first 9 months of 2011 (+9%), with 23,2% share of sales.

Aside from the leader, one manufacturer managed to preserve its positions won earlier -  Ferrosan (+10%), with 5^th rating.

Gradual migration from cheap cosmetics products to more sophisticated and hence more expensive one is now seen as a trend at the Russian personal care market.

According to Euromonitor forecasts, in 2010, the market volume of bath & shower products totaled to 27 765,8 million Rubles (USD 925 500), whereby in 2011, this figure is set to climb to 28 756.2 million Rubles (USD 958 540).  Therefore, the behavior of segment would vary in the region of 3.3%.  According to ana-lysts' forecasts, by 2013, the market capacity will top 30 million Rubles (USD 1 mln.).

Every second an average Russian uses some kind of bath & shower product: that kind of consumption is typical for the people of 20-44 age segments.

Every third consumer of this category is a man (according to 1-3 COMCON Synovate Study Wave of the Russian index of target groups for 2010).

Avon and Palmolive brands are on the leading edge of the market.  In average, every fourth customer pre-fers these products.  They are followed by the group of brands with consumption share of 15-18%, i.e. Dove, Nivea, Timotei and Oriflame (according to 1-3 COMCON Synovate Study Wave of the Russian index of target groups for 2010).

Customers of this category tend to buy personal care products in super/hypermarkets, in specialized stores or minimarts.  Ever sixth consumer prefers shopping through individual consultants of direct marketing companies such as Avon, Oriflame, Faberlic, etc (according to 1-3 COMCON Synovate Study Wave of the Russian index of target groups).

Soap belongs to the most popular personal hygiene product for the Russians, thus it holds the largest share of this market.  According to the survey, 98% of the Russians use soap, whereby on the average, approx. 50% of the households tend to buy over four soap bars within three months.

According to Academia Service Research Company, in 2010, the share of Russian-made soap accounted for 67%; this figure remains stable in the Russian market for the past three years.  At present, domestic manu-facturers are oriented at medium and low price segments predominantly.

Observers expect even higher growth in the market of liquid soap in quantitative and monetary terms ac-companied by a decline of soap bars consumption.  Over a half of the liquid soap export from Russia goes to Ukraine; hard toilet and laundry soap – to Kazakhstan.

The consumers increasingly buy soap in pharmacies, minimarts or soap boutiques.  Supermarkets are seen as the most popular places to buy so as well.

The increasing demand for handmade soap is a pronounced feature of recent years stipulated by the drive to natural and ecologically sound environment.

According to opinion polls, the most popular soap brands are “Baby soap”, Dove, Safeguard, Absolute and Fa.  Normally, the Russians buy soap once a month.

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