“I was expecting the crisis to manifest itself earlier in our sector, the cosmetics market fell more strongly than we expected at the end of 2010,” says Razvan Diratian, 35, commercial manager of Avon for Romania and the Republic of Moldova.
Diratian adds that a consumption decline continues to be felt. “More and more people are going for ‘value’ products (the lower-priced segment – editor’s note). However, customers still buy cosmetics.
According to the Avon manager, the crisis has also affected traditional customers. Although they buy the same number of products, they go for cheaper ones.
“Avon’s clients tend to be women. Eight out of ten women buy at least one Avon product per year. As for social status and age, we have customers from all categories. But our focus is on the young population, with a large part of offers being for people aged between 18 and 30.
Diratian, who has been running Avon Romania operations for around two years, says Avon has introduced increasingly more promotional offers, price cuts and value products in its catalogue.
The number of sales reps has remained relatively steady (140,000) in the first six months of the year, and so has the number of products sold, but their overall value has declined.
“This is because we have kept our prices the same or even cut them.”
At present, more than half (52%) of the products sold by Avon are mass market products (medium-priced). However, value products (lower-priced ones) are increasingly gaining ground, reaching 42% of the sales volume. Premium products make up the remaining six percent.
The company’s previous or planned product launches target mass market and premium products – a sign that Avon, a company with a 125-year history, is expecting the situation to improve. Avon is one of the leading companies on the cosmetics market, with EUR114 million in turnover last year, up by around 2% against 2009.
As for when we will see consumption rebound, Avon’s commercial manager says it is difficult to make predictions.
“Projections have radically changed. Research company Euromonitor says the market will record marginal growth this year. I expect a lower decline, but it’s hard for me to believe we will see a radical change.”
Moreover, he says the decline has deepened in the last few months.
“We are cautious after we have seen the decline deepen on the market. Uncertainty still reigns in the economic sector.”
(English version by Daniela Stoican; Editing by Radu Bostan)