Avon Romania invests $7m in distribution centre

Avon Romania, the local branch of the American cosmetics group concluded last year with $67.8 million turnover, up 40% from 2002, Srdjan Mijuskovic, Avon’s general manager for SE Europe said. The growth calculated in euros was 15%.

“We expect significant growth this year, albeit it will probably slightly lower than last year, as the market has reached maturity,” he added.

The constant increase in sales over the last few years has prompted the company to consolidate its position in Romania, so that it will begin a 7 million euro investment in a distribution centre in Bucharest in a matter of months.

“We’ve noticed an improvement in the purchasing power of the consumers, even though some companies or statistics say otherwise. We’ve seen both the number of clients and the average value of the purchase per consumer go up in the big cities. Moreover, due to our sales system that employs representatives, we have successfully improved rural presence,” Mijuskovic says.

Out of all the countries comprising Avon Central and Eastern Europe, Russia was the only one to outrun Romania in terms of growth in 2003, Mijuskovic specified.

Avon, which uses the direct sales approach, at the end of last year had come to total about 80,000 representatives in Romania and estimates to have more than 100,000 this year. Besides representatives, Avon Romania is currently employing 260 people directly, 50 more than early in 2003.

Avon’s products sold in the SE European countries like Romania are made in Poland, Germany, UK or Italy. The products for Romania are supplied by the branch in Poland and the IT services come from Hungary. Avon South-Eastern Europe has about 1 million representatives and sales of more than 1 billion euros.

Avon’s data show the cosmetics market in Romania amounts to 200 million euros a year. Half of this amount is derived from makeup, skin care and perfumery products and the other half from personal care products like shampoo or shower gel.

“The personal care products market has a tremendous potential in Romania and we intend to focus on this segment in the near future,” Mijuskovic says.

The company will pay more attention to the jewellery segment this year, where it is to launch new product lines, and on the male care product segment.

Mijuskovic says he has noticed an increase in sales over the Internet lately. “Orders placed via the web in Romania have come to account for 14% of the total and are constantly going up,” he specified.
georgiana.stavarache@zf.ro