“We set out to grow at double the cosmetics market rate, which we hope will post a 3% to 3.5% increase,” says Gilles Antoine, L’Oreal Romania managing director of four years.
L’Oreal posted growth of 4% in 2015, while the overall market grew by 2%.
L’Oreal Romania’s revenue stood at 278 million lei (EUR62 million) in 2014, according to the latest official data available, which means it should exceed RON300 million at the end of 2016, according to ZF’s calculations. The same legal entity manages, import, distribution and retail in Romania.
L’Oreal adjusted its business model in this country last year, when it added a retail component instead of relying solely on import and distribution. It therefore opened the first two stores of luxury brand Kiehl’s and the first stand of the mass market brand Maybelline. This year it will add a new US professional cosmetics brand, Nyx, whose products are also available to consumers, to its local retail operation.
The expansion strategy for the brand will use two channels: the company’s own stores and online sales. The first store will open this year and the brand will have an online presence, Gilles Antoine says.
Another new brand arriving in Romania this year is Urban Decay, which will be available in Sephora stores only, the executive said.
Gilles Antoine is optimistic about the online segment, because he is seeing online sales rising. The health&beauty segment is the fifth best-selling product category in online stores. L’Oreal estimates the local cosmetics market at RON3.5 billion and online sales contribute 4% to 5% of that. Online sales are rising fast, though, at a rate of more than 20% on a market that grows by a little more than 2%, he added.
(English version by Loredana Fratila-Cristescu)