According to Coty Cosmetics officials, the fact that consumers targeted promotions and are now more careful about choosing products has led to a larger share of less expensive products in terms of sales, which means a decline in gross profitability. The General Manager of the Oriflame Romania direct sales company, Monica Tatoiu, says that the negative impact of the sharp drop in purchasing power reflects in the increase in the market in terms of units, while niche products were purchased by the same clients but in lower quantities.
“The market level remained at the average value of 2007 and 2008, according to the latest estimates. The market was overestimated in previous analyses. The best period was from February to June. September started out with consumers with empty pockets. However, the rebound in the second half of this month is unexpected. Things are starting to bounce back,” Tatoiu added.
The decline in purchasing power is felt differently by the largest local cosmetics producer, Farmec Cluj-Napoca, which said that the current economic context is favouring Romanian products.
“The value of the acquisition has not necessarily dropped, the cosmetics market registered growth on various segments this year, but the consumers are more careful about what they are buying, if they really need the product, if it is a brand which they trust. There is also a favourable context for Romanian products, consumers are rediscovering their quality,” the Marketing and Sales Manager of Farmec Cluj-Napoca, Horea Turdan, told Business Standard.
