It really is! The beauty products market is a real jigsaw puzzle of companies, large and small, Polish and foreign…
About 400 companies dealing in the production of beauty products for a country with 38 million citizens is really a lot. The cosmetics market is a quite a patchwork. We have global corporations in Poland, for whom our market is important twofold. First, sales – after all, this number of consumers generates a lot of revenue. Secondly – many companies in Poland have located production and supplies the entire world with products from there. Beauty products of well-known brands are manufactured In Poland, such as L’Oreal, Avon, Procter & Gamble, which is well known to people in the industry, but not necessarily to the consumers.
We also have powerful local companies that have used the last twenty years to strengthen their position with respect to the giants, not allowing themselves to be marginalized in the market. Their current strong position is the result of many factors – investment in the development of production plants, speed of response to global beauty products trends, years of work on brands and – very important fact – the fondness of Polish consumers for Polish brands. Moreover, the growing export speeds up, which significantly increases the sales opportunities and profits achieved by Polish companies.
Strong private labels
A significant part of the revenues of many modern and extensive production plants is currently generated by private labels – not only the production of own brands of retail chains or products manufactured for foreign customers, but also – which is surprising for many people from outside the industry – production commissioned for beauty stores competitors locally. If it was not the trade secret, many consumers would open their eyes in astonishment to see how many different brands are coming from the same production lines.
Challenges for the smallest market players
We also have small companies that are looking for safer niches where they can survive. It is not easy, bearing in mind who they must compete with and how difficult it is to put their products on the shelves of leading retail chain stores. Waiting strategy is unlikely to succeed. The future of small companies is often uncertain. There are two reasonable solutions: either more investment in the business, for example by an external investor, which will allow the company to get some second wind, or passive persistence with no chance of increasing the scale of business, risking that one day the revenue will cease to cover expenses.
New brands still enter the market
Interestingly, the competition does not deter, and the prospects for development of this branch of the economy seem to be still alluring enough for young companies to enter the market. Some startups, unfortunately, end their lives in the first two or three years, but the rest not only manage to survive, but are also able to create a bit of a stir on the market, entering and making money in the categories where until now the strongest called the shots. According to Nielsen’s study, the growth dynamics of sales for companies from outside the first sixteen is simply the fastest. It probably shows that something changes in general: consumers are increasingly willing to buy boutique brands, they are interested in brands that run social media in an interesting way, speak their language and share their values …