“We believe the VAT cut will stimulate consumer spending on short term and we may also see customers buying upper range brands. There is a positive trend on the market, which will probably continue until the end of the year and lead to a higher consumption per capita than last year,” the Romanian executive says.
Avon operates on the direct sales segment, where its competitors include Oriflame and Amway. Its other competitors on the overall about 3.5 billion lei (EUR784 million) cosmetics and perfume market are hypermarket and supermarket chains, pharmacies, online retailers, specialist retailers and manufacturers’ own stores.
“We expect to see stronger growth in rural areas and a faster-paced growth of the mass-market and premium products.”
Rural areas account for 50% of Avon’s revenue, but growth is higher there.
Avon posted RON474 million revenue in 2014, its highest after 2008 and close to the pre-crisis level. Its revenue went up again last year and Diratian says growth was higher than the overall market’s. (EUR1=RON4.4634)
(English version by Loredana Fratila-Cristescu)