Oriflame Romania, the local branch of the Swedish cosmetics producer, had great expectations for 2003, as it planed to grow 30% in real terms. However, the company hit a nine-year record-low, as the growth estimated for 2003 will only amount to 3%.
"According to our market research, consumers shifted to durable goods and to the real estate market, as the commercial banks started granting more credits. This shift has hurt Oriflame, as 2003 was the first year with less than 10% growth, since the company's establishment. We have seen small growth this year and we expect the same for the next," the company's general manager Monica Tatoiu said. The company's sales are estimated to amount to 19.2 million euros this year. Sales accounted for 18.7 million euros in 2002, while losses totalled 358,000 euros, according to the Finance Ministry.
"We have noticed an increase in the number of consumers, but the individual acquisition value dropped: more buyers purchased fewer products. The consumer goods market will not grow, considering the anti-inflation policies, which lie at the core of next year's budget," Tatoiu also said.
However, things may not be as bad as they seem at first sight. Even though the euro's appreciation has upset the plans of the consumer goods producers operating on the Romanian market, they still noted certain cases when the purchasing power actually increased.
For instance, Procter & Gamble Romania officials stated the company's business had grown 20% this year, chiefly due to the growth of the purchasing power.
claudia.covaci@zf.ro
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