Cosmetics retail in Poland is a mature market. It has a lot of players – both domestic and foreign – trading from a variety formats, and consolidation has been slowly progressing.

There is a high level of saturation, particularly in large cities. Yet for all that, the market still has good prospects, thanks to Poles’ rising incomes and their increasing usage of cosmetics, notably those from the mid- and high ends of the product space. The market’s value is projected to grow by 19% between 2018 and 2024, according to a new report from PMR titled Cosmetics retail market in Poland 2019. Market analysis and development forecasts for 2019-2024.”

Booming economy fueled by optimism of consumers

The Polish economy kept expanding at a strong pace in 2018, fuelled chiefly by robust domestic demand. Investment activity perked up, helped by increased utilisation of EU funds, but consumer spending remained the single most important source of GDP growth. A record-low (and falling) unemployment rate, rapid wage growth driven by a tight labour market, and rising disposable incomes, as well as a benign macroeconomic environment all supported a mood of confidence and optimism among households, translating into a higher propensity to spend. As a result, private consumption grew at a strong rate again, if slightly slower than the year before (challenging comparatives from 2017 and the boost from the Rodzina 500+ programme beginning to wear off are two factors that explain that.)

A relatively low inflation rate, at below 2%, contributed to real household disposable income growth in 2018. Although the prices of energy commodities grew markedly compared with 2017, continued subdued price growth in the Euro area and a moderation of food price increases helped put a lid on inflation.

All this made 2018 a good year to be a cosmetics retailer in Poland.

Value (PLN m) and change (%) of the cosmetics retail market in Poland, 2015-2019

  2015 2016 2017 2018e 2019f
Value 20 945 22 051 22 875 23 723 24 485
Change 4.8% 5.3% 3.7% 3.7% 3.2%

e – estimate       f – forecast
Source: PMR, 2019

A market of ongoing changes

The Polish cosmetics retail market has evolved in important ways over the years. It is not just the competitive landscape and market structure that have changed; consumer attitudes have moved on too. Poles are more and more conscious of their needs, and increasingly knowledgeable, inquisitive and demanding about products. A new consumer survey that we carried out as part of the report provides yet more evidence of that.

In one telling finding, as many as 59% of those interviewed said that they often checked out the ingredients of cosmetic products. The proportion was higher among women than men (62% vs. 51%). In terms of age groups, knowing a cosmetic product’s ingredients is especially important for people aged 55 years and older (70%).

High trust to Polish cosmetic brands

Respondents from this latter demographic were also more likely than others to report choosing bigger packaging sizes or glass packaging when buying cosmetics because this is the environmentally responsible thing to do (69%). They were also the likeliest of all to express a preference for Polish brands of cosmetics (68%). They are the group for whom the country of origin of a cosmetic product is most important (58%, against 40% among interviewees aged up to 40 years.)

In other interesting findings, women are readier than men to pay a premium for a cosmetic product that is made from natural ingredients (58% vs. 51%).

Women are also much more likely than men to seek out the opinions of others, or to search for additional information, before deciding to buy a cosmetic product that they have not used before (55%, vs. 41% among men).

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