Avon Cosmetics Romania, the domestic branch of the US cosmetics giant, concluded the 2005 fiscal year with 128 million dollars (106m euros) in turnover, an increase of 18.5% on the previous year.
Angela Cretu, the company”s general manager, stated this increase was due to the expansion of the product range, investments in advertising, dynamic changes in terms of the products sold, as well as to the rising number of distributors.
The company”s representative anticipates the firm”s turnover will grow in line with the overall cosmetics market this year.
“The market will grow by at least 20% in 2006. The increase is considerably higher than in the West, where there is a tighter focus on retail rather than direct sales,” the Avon representative explained.
Some players estimate that the cosmetics market was worth around 200-250 million euros in 2005, having seen an annual growth rate of up to 15% in recent years, and the entry of several international players onto the Romanian market.
“The market is growing. Perfumes alone have gained 60%.
“Fantastic growth is foreseen for this category in 2006,” the Avon representative stated.
Moreover, Angela Cretu noted, Romanian customers are more open to new things, considering that 60% of orders logged last year were placed through the Internet.
In comparison, just one quarter of orders registered on the French market were made in this manner last year.
Westerners prefer hypermarkets to direct sales, increasingly shunning time consuming socialisation.
“We have instant market response, we have direct contact with customers and we are able to feel what direction our strategy needs to take,” says Cretu.
At the end of last year, the company had 117,000 representatives, an increase of 16% year-on-year.
The company also plans to open three distribution outlets in Romania – in Iasi, Craiova, Timisoara and a fourth one in Constanta in early 2007.
Avon has recently finalised a 12m-euro investment in a regional distribution centre located in Chiajna, near Bucharest.
The sum accounts for around 10% of the company”s 2005 turnover and is the biggest investment Avon has made on the domestic market.
The warehouse will service Romania, the Republic of Moldova, Bulgaria, Albania and Macedonia. The centre covers an area of 11,000 square metres, is located near Carrefour Militari and will become functional as of next month.
Avon products are manufactured in Germany, England and Poland.
Cretu says the firm plans to focus on the youth segment this year.
Avon”s rivals on the domestic market are Nivea, Max Factor, L”Oreal and Oriflame. andreea.groenendijk@zf.ro