Between 2002 and 2003 the Russian market recorded value growth of 14.3 per cent in cosmetics and toiletries sales, with skin care showing the strongest value increase at 30 per cent - the report from Euromonitor International highlights.
But right across the market, growth has been underpinned by the stabilisation of the Russian economy, which has encouraged foreign investment and bolstered consumer spending.
"Rising consumer spending has been central to value growth in the cosmetics and toiletries market in Russia," the reports' author, Leonie Tait said. "Instead of selecting products entirely on price, Russian consumers are starting to make product quality a key criterion in purchasing decisions. The result is that premium products have begun to perform well - a trend that was most evident in the skin care sector, where value sales doubled volume sales."
All the major global manufacturers have been playing a significant part in the growth of the market, with heavy investment in advertising campaigns proving key to success and raising consumers' awareness of higher quality skin products.
In doing this foreign manufacturers have created awareness of different skin types and needs, increasing the scope for the all-important skin care market. Clearasil is a prime example of this, the report says, with Russian teenagers now taking up on the products acne-fighting claims since the product's launch in 2003.
Local manufacturers have also picked up on the trend towards use-specific cosmetics by introducing a full range of skin care products, such as toners, cleansers and moisturisers - an idea originally introduced by foreign firms in the 1990s. This has encouraged more consumers to use a variety of specially designed products in their daily skin care regimes, a development that continues to have a positive impact on growth.
Efforts to raise consumer awareness for firming/anti-cellulite products have also boosted sales in the skin care sector. The report's research shows that firming/anti-cellulite products witnessed the fastest growth in the sector, with an increase of over 49 per cent.
Readily available information on cellulite treatments in the media and media has helped to raise the profile of these products. In fact, nearly every website aimed at women and covering general fashion or cosmetic trends in Russia has a link to further information on cellulite and treatment methods.
New product launches in 2003, including Orlane S.O.S. Conturing Oil by Kélémata SpA and Sisley Phyto Sculptural by Sysley CFEB, also boosted sales in the sector by increasing the availability of these products to the average Russian consumer.
The improvement of distribution networks in Russia is also integral to the cosmetic industry's impressive growth with supermarkets and chained boutiques broadening their product ranges and moving and their geographic range by moving out to smaller cities, giving Russian consumers easier access to cosmetic products.
Direct sales, however, have had the biggest impact on the cosmetics and toiletries industry, particularly in the skin care and colour cosmetics sectors. Euromonitor research shows that direct sales seized a share of 14.2 per cent of total cosmetics and toiletries sales in 2003. The key to success for the major players, Avon, Oriflame and Faberlic, is well-trained consultants promoting a full range of skin care products, from cleansers and toners to moisturisers and body care, the report claims.
Looking to the future, the Russian cosmetics and toiletries market will continue to achieve remarkable growth in the next five years. Euromonitor forecasts 60 per cent overall market growth, with the skin care sector expected to achieve the most dynamic value increase of 98 per cent. With this market potential, there is no question that Russia presents a golden opportunity for both local and foreign manufacturers.