Shift to mass-market products paid off for growing Russian cosmetic industry

LONDON —Russia is one of the favorable destinations for cosmetic industry investments among emerging cosmetics markets worldwide, thanks largely to an economic recovery, rising consumption levels and a positive outlook on consumer purchasing power, according to a recent research report on the Russian market.

According to the “Russian Cosmetics Market Forecast (2008-2012)” report from CompaniesandMarkets.com, the Russian cosmetic and perfumery industry witnessed 10.3% annual growth in 2008, with total industry sales value surpassing US$9 billion for the first time.

It is expected that the cosmetic industry will see a slight slowdown in growth because of contracting purchasing power in 2009, but a shift to mass-market products will pay off.

“The shift in consumer preference from luxury and branded products to mass-market segment products will rescue the industry from negative growth and demand contraction. Consumers will diversify their single spending on luxury products to multiple mass-market products and will still continue with their preference for cosmetic products, despite the declining purchasing power,” the report stated.

By the beginning of the second half of 2010, the industry is expected to recover, driven by economic recovery, rising consumption levels and positive outlook on consumer purchasing power.

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