Some thrive in crisis

Postat la 22 aprilie 2009 26 afişări

There is a category of producers which are posting two-digit turnover rises this year. Paradoxically, they are relying on the customers’ lower shopping budgets, as well as on the fact that they will invest - some of them for the first time, in marketing.

Small prices to some degree marginalized Romanian cosmetic products, which consumers with increasingly high incomes were not very keen on buying. In 2009, price should be their trump card, according to Elena Cremenescu, founder of Elmiplant producer, now held by Greek group Sarantis. Cremenescu hopes this crisis will open up new opportunities on the market, referring mainly to the fact that, under the pressure of the devaluation of the Romanian currency, multinationals will increase prices in RON, and this will turn some of the customers towards cosmetics manufactured in Romania, which are cheaper.

Elmiplant has a crisis strategy ready, whose main points entail launching new products (for skincare and bodycare). This year’s launches will boost the group’s products from 80 to over 100, following a half a million-euro investment. Elmiplant’s founder expects a 25-30% turnover increase in 2009, in line with the trend that has already been apparent in January and February. ”It seems a lot, but we are relying for this on all the products we will relaunch and on the advertising budget set aside, of 15% of the turnover,” explains Elena Cremenescu.

Another Romanian player which is expecting growth, but of 10% (to 2.75 million euros), is Gerocossen, whose shareholders however admit that their profit margins now amount to 13%, as opposed to 20-25% last year. The largest Romanian cosmetics producer, Farmec, has a more conservative approach, expecting a 5% turnover rise, from 24.4 million euros last year, in the context of the economic crisis. Mariana Sinitaru, marketing specialist of the company, says the cosmetics industry is less exposed to the effects of the crisis, because consumers are not willing to give up daily care, even though a change in consumer behaviour will be noticeable, in that consumers will migrate to more affordable products.

According to information provided to BUSINESS Magazin by representatives of the producer, Farmec preserved its growth rate last year, reaching comfortable growth rates: 30.3% for cleansing products, 25.7% for face care products and 9% for body care products.

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