“We had a very good start of the year, after consolidating our local e-commerce business and developing the operations in the Republic of Moldova in 2014, a less developed market even on the retail segment,” Razvan Diratian said.
“Our business grew by more than 10% in the Republic of Moldova. Consumption of cosmetics per capita in this country stands at just 25% of the consumption in Romania.”
Whereas Romanian consumers spend $5 to $6 on cosmetics and care products per month, consumers in the Republic of Moldova spend less than $2, according to Avon data. “We are talking an underdeveloped market here, considering Romania, too, is close to the bottom of the ranking in Europe in this department.”
Avon developed a distribution center in Romania that supplies products to the markets in the region, that is Republic of Moldova, Bulgaria, Albania and the Former Yugoslav Republic of Macedonia.
“Local sales generate about 83% of the Romanian business, while exports account for the rest.”
Razvan Diratian, who has been working for the company for about 15 years, says 2014 was the best year after 2008, not just because of the sales but because of the market trends. The market is more predictable and steady, he noticed, while customers are more open to spending money on mid-range and premium products.
“The battle is no longer fought over prices and this is a sign of a healthy market and overall economy for that matter.”
Avon’s sales grew by 5% last year, while the overall market growth rate was 3% to 4%. The upward trend continues.
“Five months into the year, we have no signs of a change for the worse this year.”
Avon’s competitors on the cosmetics and care products segment are direct sales companies Oriflame and Amway, as well as international giants selling their products via retail chains and online, such as L’Oreal and Beiersdorf (Nivea).
(English version by Loredana Fratila-Cristescu)