Russia has huge potential for manufacturers to tap into this growth, and according to a report from market researchers RNCOS, this potential extends to both domestic and foreign cosmetic manufactures.
The report Russian Cosmetics Markets Forecasts 2008 – 2012, highlights the fact that the cosmetics industry is currently registering one of the highest growth of any industry segment in the country.
Tapping into huge growth
This is highlighted by the fact that the beauty industry registered growth of 11 per cent during 2007, compared to growth of just 3 per cent in the more developed Western European market.
Indeed, the report highlights the fact that this rate of growth is set to surge even further, providing average market growth of 13.2 per cent during the period 2008 to 2012.
Of course these estimates are dependent oncurrent global economic conditions, but if current conditions prevail RNCOS estimates that the industry will continue to benefit from the growing consumer spend on beauty products, which will be accentuated by a growing presence of foreign companies.
Foreign players dominate the high-end
Although domestic companies still have a substantial hold over the mass-market and middle-market brands, it is the high end where foreign players are continuing to carve out an increasingly large slice of the market.
This falls in line with growing consumer affluence and spending power, which is also tied in with the fact that more expensive foreign beauty brands are highly revered in a society that has become extremely brand conscious.
But RNCOS also notes that foreign manufacturers have not been restricted entirely to high-end brands, and are increasingly showing potential for success in mass and middle market positions too.
Foreign players tapping into all categories
Indeed, the increasing presence of foreign players in these two market positions is expected to lead to a lot more competition in this area, particularly as foreign players are expected to have an advantage to commercialise new technologies and get them to market quicker.
The market report says that the fact that foreign companies are now moving into all segments of the beauty market in Russia is also being driven by the fact that western concepts of beauty and well being are also filtering into the market, helping to drive sales of foreign brands.