Avon Cosmetics Romania, the biggest importer of cosmetics on the domestic market, last year overshot the 100 million-euro mark in terms of turnover. The cosmetics importer, a subsidiary of the US giant Avon, in 2005 posted gross income of approximately 16 million euros, about 50% higher year-on-year.
"The Romanian cosmetics market is maturing. Though major global competitors have been present in Romania for some time, the penetration of daily hygiene products in rural areas and of niche products in urban areas has not reached its full potential," stated Raluca Kisescu, marketing manager with the company.
According to her, the reason behind the rise in sales of the company's business is the high number of products included in the company's portfolio, targeting various consumer segments and able to cover a vast demand. For instance, the company's perfume segment last year rose by 60%.
Avon Romania last year derived turnover worth 120 million dollars (106 million euros), up 18.5% from the previous year. For this year, company officials forecast growth in line with the market pace.
"Another factor that helped Avon take advantage of market growth and boost its profit from the previous year was its uninterrupted investment in the training of beauty advisors, a considerable advantage in terms of competition," she concluded.
The company's products are distributed through direct representatives, in a multi-level-marketing system.
The company sealed contracts with 117,000 representatives countrywide. Of these, not all are authorised individuals (who have the right to resell the products), many are just consumers, who, once included in Avon network, can buy products at lower prices.
The cosmetics market sees annual growth by 10-15% in Romania, with a 20% increase being expected for 2006. By comparison, on Western markets companies operating in this field register growth rates of 2-3%. The domestic market was last year estimated at 200-250 million euros, and Avon Romania is the biggest player on the Romanian cosmetics market.
In May, the company opened a regional distribution centre (near Carrefour Militari), in which it invested 12 million euros. The company plans to open another 3 distribution points in Romania, in Iasi, Craiova, Timisoara and a forth one in Constanta, scheduled for early 2007.
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