Perfumes (Russian market)

2024: Perfume and cologne production in Russia reached a record of 51.6 million vials

The production of perfume products in Russia reached record levels in the first half of 2024. This became known on August 2, 2024. Perfume and cologne output was 51.6 million vials, the highest in the last four years.

According to RBC, citing statistics from the Center for the Development of Advanced Technologies (CRPT), this figure significantly exceeded the results of previous years. In particular, for the same period in 2023, 39.3 million vials were produced, in 2022 - 34.7 million, and in 2021 - 39.4 million.

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Freepik

The growth of production is observed against the background of a decrease in imports of perfume products. In the first half of 2024, the volume of imports decreased by 10.6%, amounting to 26.9 million vials. This is due to the withdrawal from the Russian market of a number of foreign companies after the start of a special military operation in Ukraine.

The largest volume of production in Russia falls on toilet water - 20.9 million packages in the first six months of 2024. Other categories showed significant growth: the production of cologne, fragrant water and other goods increased by 30.7% to 5.1 million bottles, perfume water - by 29.4% to 13.2 million. The most impressive growth was demonstrated by the production of perfumes, increasing 2.5 times to 12.4 million vials.

The average cost of perfume products in Russia has also undergone changes. The price of a bottle of perfumed water increased by 14% to ₽2,6 thousand, toilet water - by 10% to ₽1,2 thousand, perfumes - by 12.5% to ₽1,8 thousand. At the same time, the cost of fragrant water decreased by 30.1% to ₽348, and the price of cologne practically did not change, amounting to ₽490.

Pyotr Bobrovsky, Executive Director of the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals and Hygiene, noted that there are about 40 enterprises specializing in the production of perfume products in Russia. Most of them work under contract for third-party organizations.^[1]

2023

Imports of perfume oils to Russia for the year decreased by 29% to 10.07 thousand tons

At the end of 2023, the import of perfume oils (non-food fragrances) to Russia amounted to about 10.07 thousand tons. This is 29% less than in 2022, when the volume of import of these products was estimated at 14.16 thousand tons. Such data are given in the BusinesStat study, the results of which were published in mid-September 2024.

It is noted that the Russian market for non-food fragrances is more than 90% represented by imported products. The fact is that European manufacturers have experience in creating high-quality aromas that correspond to market trends, thanks to which they are popular with Russian customers - companies that produce perfumes, cosmetics and household chemicals. Among the significant players in the Russian industry are named Kema Club LLC, Teresa-Inter LLC, Eisisens LLC, Novakom JSC and Scorpio-Aroma LLC.

According to estimates, in 2019, the import of perfume oils to Russia amounted to 12.63 thousand tons. In 2020, the indicator rose by 5%, reaching 13.26 thousand tons. In 2021, a decline of 1.2% followed with a final result of 13.1 thousand tons, and in 2022 there was an increase of 8%. In general, from 2019 to 2022, imports of non-food flavors to Russia increased by 12%. The bulk of supplies came from Germany (37% of total imports), France (12%), Latvia (8%), [[Switzerland 'Switzerland] (7%), Lithuania (6%), the Netherlands (6%) and Poland (6%).

The study says that against the background of the formed situation, the supply of fragrances from Europe in 2023 decreased significantly. At the same time, the demand for such products on the Russian market is growing, and its own production is poorly developed. Under the current conditions, Russian perfumers and manufacturers of household chemicals and cosmetics are forced to look for alternative suppliers of oils in China, Turkey and Japan.^[2]

Lithuania became a leader in the supply of spirits to Russia

At the end of 2023, Lithuania became the main supplier of perfumes to Russia. This was announced on March 17, 2024 by the Prime news agency.

The publication notes that historically the top three importers of perfumes included France, Lithuania and Germany, but Germany was replaced by Spain in 2022, and Poland in 2023.

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Unsplash

The total supply of perfumes to Russia in 2023 amounted to more than $516 million. Lithuania delivered the most in the amount of more than $165 million. The top three also included Poland ($64 million) and France ($58 million). These countries accounted for more than half of the supply of perfume to Russia.

Among the large importers, Italy ($52 million) and Spain ($39 million) can also be noted. The top ten also included Germany ($25.5 million), the Czech Republic ($23 million), Latvia ($19.6 million), Turkey ($17 million) and Kazakhstan ($15.2 million). In total, the ten largest importers accounted for 93% of perfume supplies to Russia for a total of $480 million.

Since 2021, Turkey and Kazakhstan have the highest growth rate in supplies to Russia - their supplies have grown almost 3 times. Italy, Lithuania and the Czech Republic have doubled imports to Russia in two years. In some countries, imports of perfume to Russia fell. The largest share decreased in Germany - 5 times. In addition, supplies from France (by 26%), Spain (by 20%) and Latvia (by 13%) fell.

Of the countries that have not entered the top ten importers, we can note the countries whose imports have grown the most. These are Slovenia (394 times up to $13 million), South Korea, Thailand, Uzbekistan, Armenia, China. The most sharp drop in imports of perfume occurred in Belgium, USA, Azerbaijan, Slovakia, Great Britain, Bahrain, Switzerland, Finland. Imports of the Netherlands fell to almost zero and amounted to $155 thousand, which is 12.5 thousand times less than 2 years ago.^[3]

Reducing the range of perfumes from unfriendly countries

In April 2023, perfume brands from unfriendly countries are running out of Russian beauty stores - Yves Saint Laurent, Lacoste, Maison Margiela and Calvin Klein almost disappeared from the shelves. In the stores "Riv Ghosh," "L'Etoile" and "Golden Apple" almost completely ended the Chanel brand. At the same time, perfumes are freely sold at Ile de Bote points.

In addition to stores, such perfumes are not in duty-free stores, GUM and TSUM. Selling companies are discussing options with parallel imports, supplies of domestic brands or brands from friendly countries.

2022: Perfume sales up 28%, to 85.5 million vials

In 2022, Russians bought 85.5 million bottles of perfume products, which is almost 28% more than a year earlier, when the market volume was measured at 67 million units. This is evidenced by the operator of the Honest Sign marking system.

In money, sales of perfumes during this time increased by 30.1%, to 142.9 billion rubles. The share of online sales in the segment per unit of goods increased from 9.1% in 2021 to 12.3% in 2022, in monetary terms - from 8.9% to 9.5%, respectively.

Sales of perfumes in Russia for the year increased by 28%

The share of Russian perfumes among the consumed segment reached 60.7%, which is 2.5% higher than in 2021. Following the preferences are perfumes from France (15.9%), Spain (7.3%), Poland (5.8%) and Germany (2.4%).

According to Mikhail Burmistrov, General Director of Infoline Analytics, the main sales of perfumes in 2022 fell on the first half of the year, and the restriction of import supplies affected the share of Russian manufacturers.

Alexandra Skorobogatova, executive director of the Russian Perfume and Cosmetics Association, noted that inexpensive Russian perfumes have always been in demand, and in general, demand in 2022 shifted to a cheaper price segment.

The National Council for Perfumes, Cosmetics and Household Chemicals (it includes Faberlic, Arnest, MIXIT, R.O.C.S.) said that domestic manufacturers are looking for and finding the necessary components for the release of products in "friendly" countries and establish their supply, which affects demand in a positive direction.

Honest Sign experts calculated that by the end of 2022, more than 136 million bottles of perfume products were in circulation. These volumes are enough to cover the demand of Russians for more than a year. At the same time, perfume of both domestic and imported production continues to enter the market, they noted.^[4]

2016

In September 2016, the DISCOVERY Research Group marketing agency completed a study of the Russian perfume market.

In the first half of 2016, the market volume of perfumes and cosmetics amounted to 169.3 billion rubles. The volume of the perfume market amounted to 34.5 billion rubles.

Among perfume manufacturers, L'Oreal, LVMH, Procter and Gamble and Estee Lauder Companies remain the leaders in the Russian market in the first half of 2016.

The structure of the perfume market by price category in the first half of 2016 has undergone minor changes compared to the previous period: 48.1% of all sales are in the mass segment, 51.9% are in the premium segment (previously the mass segment prevailed somewhat).

Magnit Cosmetics is the absolute leader in terms of the number of stores: in the first half of 2016, this perfume and cosmetic network owns approximately 1000 stores. This is followed by the L'Etoile chain - about 900 stores in the Russian Federation. Then Yves Rocher follows by a wide margin - about 300 of the chain's stores.

Among the trends and events in the perfume and cosmetics market, the following can be noted: the return of Louis Vuitton fragrances to the perfume market, the management of Alcor & Co for perfumes at Stockmann, the launch of drogery stores in Russia by the Auchan chain, the expansion of L'Oreal products in Russia, the plans of the Golden Apple network to start working in Moscow, the development of the direct sales segment in the perfume and cosmetics market, etc.

2015

The market volume of the perfume market in 2015 amounted to 69,345 million rubles. The largest share in the price segments in the perfume market falls on the premium category. In 2015, the sales volume of the perfume market in this segment amounted to 36,432 million rubles. The same indicator in the mass segment amounted to 32,913 million rubles.

The main distributor in the perfume market in 2014 was retailers specializing in the sale of cosmetics and personal hygiene products. The rapid development of modern retail and advertising activities influenced the development of the premium perfume market in Russia. Thanks to frequent special offers and 50% discounts, consumers have changed their preferences from mass brands to premium ones.

Seldico was the leading manufacturer of the perfume market in Russia with a market share of 16% in 2014. The company has a wide portfolio of brands and mainly operates in the premium price range. Her most popular brands are Bvlgari, Guerlain, Kenzo, ChristianDior and Givenchy. The company's brands are well known and recognized by Russian buyers. In addition, the company invests a lot in promotion, and its brands are sold in the most popular retailers specializing in the sale of cosmetics and personal care products.

Women traditionally remain the main target audience for most manufacturers as they present greater demand for the perfume market. They purchase products not only for themselves, but also for their partners. In addition, women continue to believe that the perfume market is improving their image.

• According to DISCOVERY Research Group, a marketing agency

2013: Market volume 75 billion rubles

According to DISCOVERY Research Group, in 2013 there was a 3% reduction in the market for perfumes and cosmetics. The market volume in this period amounted to 415 billion rubles. The perfume market volume in 2013 amounted to 75 billion rubles. Most of the sales of perfumes in Russia are accounted for by 6 Western companies: L'Oreal, LVMH, Procter and Gamble, Estee Lauder Companies, COTY, Puig Beauty & Fashion Group. Russian companies are outsiders to the perfume market.

In 2013, Christian Dior became the favorite brand of Russians in the category of "perfumes and cosmetics." According to the rating of brands top20brands.ru. Christian Dior won 16.1% of the vote, L'Oreal 14.2%, Chanel came in third with 13.6% of the vote, pushing Nivea into 4th place with 10.7%. It is also worth noting that in 2013, a new Givenchy player appeared in the top ten brands, and flew out of the top ten Max Factor. Among direct sales companies, Russians also prefer Avon.

The share of counterfeit goods in the Russian perfume and cosmetic market is, according to various estimates, from 15% to 30%. Foreign manufacturers, especially manufacturers of elite perfumes and cosmetics, protect their brands with individual packages, various markings, direct supplies to retail chains, sales through their own stores, etc. All these mechanisms lead to a reduction in the share of gray and counterfeit products in offline stores. A new trend in the perfume market is the departure of such products on the Internet, since the lack of control and greater profitability than offline led to an increase in this sales channel.

Key market trends are increased competition between federal retailers, and an increase in the share of online sales of the largest federal chains. In addition, the active growth of drogery networks will continue, since in this segment the level of market consolidation is very low. Also in the medium term, we should expect a reduction in the share of cities of federal significance in the volume of sales of perfumes and cosmetics against the background of an increase in the share of large regional cities in which specialized perfume and cosmetic networks are actively developing.

Among the chains selling perfumes, L'Etoile is the absolute leader in terms of the number of stores: in Russia, the number of stores is more than 800, opened in more than 250 cities, and the network continues to expand into the regions. The closest competitor is the Yves Rocher chain, which has 278 stores. In 2013, all major chains, despite the decline in the market as a whole, slightly increased their sales volumes, taking shares from smaller and regional sellers. Specialty perfume and cosmetic chains strengthen their position through marketing tools such as large-scale loyalty programs and promotions.

Pharmacies as a distribution channel are increasingly moving into the segment of specialized cosmetics. There is also a general trend towards a reduction in uncivilized forms of trade.

Notes