Poland holding up Central European cosmetics market

09-Sep-2013 - Last updated on 10-Sep-2013 at 10:46 GMT

The Central European cosmetics market has bucked the uncertain economic situation of the region to post 2 per cent growth, according to a report by Companiesandmarkets.com.

The report by the market research firm shows that Poland was the star performer, growing 3 per cent year-on-year, whilst the Czech Republic posted the lowest growth at negative 0.8 percent.

While the 2 per cent increase reflects a growth rate which has slowed by 0.3pp, the industry as a whole is considered “stable.”

Cosmetics markets are expected to pick up in 2013, with growth of 2.6 percent boosted by the Polish market.

Jarosław Frontczak, Head Retail Analyst at PMR, commented: “Poland is the largest cosmetics market in the region with more than a half of the market share of total CE sales. The second-ranked country is the Czech Republic and Bulgaria is the smallest market.”

An economic problem

Central Europe is currently suffering from slow growth related to the Eurozone crisis. Poland and Slovakia were the only countries which posted higher growth rates than the year before.

Hungary’s growth was under 1 per cent, whilst the four other countries reported results ranging from 1.3 per cent in Bulgaria to 3.1 percent in Poland.

However, the region has also been partially insulated from the currency collapse which has affected other emerging markets.

Companiesandmarkets.com analysts believe that the area will return to posting respectable growth towards the end of 2013, with only Slovakia predicted to have a lower rate of increase than 2012.

They also anticipate a more stable situation most economies, with the majority improving their situations and leaving consumers in a better position.

Changes in consumer spending

Despite consumers needing to carefully manage their household budgets the cosmetics market remains relatively buoyant, which analysts attribute to several factors.

Major elements include household owners tending to save and pay off their loans, which has given them a sense of security which allows them to increase their household expenditures on purchases which could not be made in previous years.

Cosmetics, being one of the cheapest consumer items available, are often the first things to be purchased.