At present, L’Oreal’s revenue stands at some EUR60-65 million. The leader of the market is Avon, which has a different, direct sales-based, business model.
At the end of 2012, the company’s revenue had advanced by 7%, to 235 million lei (EUR53 million).
In 2013, the cosmetics producer saw its revenue advance by almost 5% on a challenging and unpredictable market. The overall increase was bigger, though, as L’Oreal Romania less than one year ago took over the distribution of products in the company’s luxury unit.
At the moment, the company said the unit would come to account for 8-10% of revenue, meaning, according to ZF estimates, the overall revenue hit almost EUR60 million at the end of 2013.
“The biggest weight in total revenue is held by mass-market products, with under 50%, followed by dermo-cosmetics and professional and luxury products”.
Gilles Antoine says L’Oreal has covered almost the entire modern retail, but there is still room for growth in traditional retail.
2013 was a challenging year, more challenging than 2012, according to Antoine, who states, though, that he hopes things will change in 2014, and players launch new products, so that at yearend high-penetration product categories should return to growth.
The overall cosmetics market in 2013 rose by 0.9% by value to around EUR670 million, according to L’Oreal data. The company expects a 1.4% advance for 2014.
A Romanian spends on average EUR40 per year on cosmetics and personal care products, compared to EUR130-150 in the case of an Italian or French. “Romania has a long way to go to catch up with Western states. The key is to bring onto the market products adapted to the local income level, otherwise the market is not aided to grow”.
Gilles Antoine says product prices are higher in the West, but the price gap is not as wide as in the case of incomes.
“It’s hard to make growth predictions for the domestic market, but considering the global market is rising by 4%, in Romania the advance should go beyond this mark and there is potential for a 5%-10% annual plus”.
Of all the segments of the market, the luxury one has felt the crisis the least, but Gilles Antoine says that in the industry, irrespective of the segment, it is not only price that matters, as consumers also look at products and brands.
In 2014, L’Oreal is set to launch two new brands in the domestic luxury unit, Victor&Rolf and Clarisonic.
For this year, L’Oreal forecasts faster growth compared to 2013.
(English version by Catalina Apostoiu)