The Shift in Russian Cosmetics Market: Evolving Preferences Post-Pandemic
The preferences of Russian consumers in the cosmetics industry have experienced a significant shift in the aftermath of the pandemic. Over the past year, there has been a notable decrease of 17.5% in the demand for decorative cosmetics, while personal care products and vitamins have gained preference among consumers. Moreover, an interesting development is the increasing number of men purchasing cosmetics.
Market Trends in the Cosmetics Industry
According to TEBIZ GROUP, the cosmetics market size witnessed a 7% decline in 2020. While sales of decorative cosmetics like lipsticks and cream foundations experienced a downturn, there was an increased demand for personal care products, masks, and body lotions. Online sales of cosmetics have seen significant growth during this period, following the trend observed in other product categories. “In 2020, 69% of customers made their purchase decisions online,” notes Tamara Shokareva, President of the Direct Selling Association. “In 2018, this figure stood at only 53%.” Marketplaces have also observed a boom in cosmetics sales. Wildberries, for example, reported that residents of Russia purchased twice as much cosmetics, perfumes, and care accessories from January to April 2021 compared to the previous year.
Marketplace sales are currently experiencing explosive growth, with people preferring to make smaller purchases on these platforms (with an average transaction value of 1,150 rubles). On the other hand, direct sales have not witnessed such intensive growth, with a 7.4% increase in goods purchased across all categories by the end of 2020 compared to the previous year. However, it should be noted that consumers are willing to make significant-budget purchases as well. A third of customers place orders ranging from 500 to 1,500 rubles, another third falls in the range of 1,500 to 3,000 rubles. Only 8% of customers make small purchases worth up to 500 rubles.
Another interesting trend in the market is the growing popularity of cosmetics among men. From January to April, men purchased 15 times more diverse products and four times more shaving tools from Wildberries, with the demand for colognes nearly doubling. The popularity of various styling and care products for beards and mustaches is also on the rise.
Overall, the Russian cosmetics market has witnessed a significant transformation in consumer preferences post-pandemic, with a notable shift towards personal care products, increased online sales, and the growing acceptance of cosmetics among men.
Segmentation of the Cosmetics Market
In 2020, the cosmetics market witnessed a significant segmentation, with the category “Skin care products, skin protection products, other makeup products” emerging as a key segment, comprising nearly a third of the market’s revenue (28.2%), according to TEBIZ GROUP. The Direct Selling Association reported a 6.8% increase in sales of beauty products, while the demand for perfumes also experienced growth, with a 10.7% increase in purchases. Of particular interest among consumers are skin patches for the eye area, with purchases of these products seeing a remarkable growth of 257% since the beginning of the year.
The Rise of the Online Cosmetics Market
Research conducted by Data Insight in collaboration with Arvato Rus reveals the size and impact of the online cosmetics market. In 2020, online cosmetics stores recorded 83 million orders amounting to 95 billion rubles in sales, with an average order value of 1,150 rubles. Online cosmetics stores witnessed a significant surge in orders, experiencing a 158% increase compared to the previous year. In terms of sales volume, online sales grew by 99% in rubles during the same period. However, the average order value saw a decline of 23%. Online orders from cosmetics stores accounted for 10% of all orders placed among the Top 1000 retailers, contributing to 4% of the total sales volume in rubles.
Top Online Cosmetics Sales Leaders in Russia 2020
Wildberries.ru emerged as the frontrunner among Russian online retailers in the cosmetics category, capturing a significant share of 37% in terms of online sales volume among online cosmetics stores in 2020. Ozon.ru secured the second position, while L’Etoile, an online store specializing in cosmetics and perfumery, ranked third.
Geography of Online Cosmetics Stores in Russia
Among the online cosmetics stores listed among the Top 1000 online retailers, a considerable portion of 82% is concentrated in Moscow and St. Petersburg, including their respective regions. The remaining 18% of stores are spread across other regions in the country.
Traffic and Conversion of Online Cosmetics Stores
In the online cosmetics store segment, the conversion rate in 2020 reached 5.1%. This figure is closely aligned with the conversion rates of online book stores (5.9%) and online stores offering clothing, footwear, and accessories (4.5%). The traffic composition in the online cosmetics store segment is generally consistent with average values observed in the broader eCommerce market. However, it is worth noting a threefold higher share of advertising clicks (10% compared to the average of 3%) and a slightly increased proportion of “organic” traffic sources.
Social Media Engagement in the Cosmetics Segment
Instagram holds the top position as the most popular social network in the cosmetics segment. A significant 91% of stores have established their communities on this platform, with 68% of them boasting more than 10,000 subscribers. Following closely behind, VKontakte (VK) emerges as the second most popular social network in the segment. Approximately 89% of stores maintain communities on VK, with 63% of them amassing over 10,000 subscribers. While only a quarter of stores maintain accounts on the Odnoklassniki social network, all of them have garnered more than 1,000 subscribers. Remarkably, every fifth store has gained over 100,000 subscribers on Odnoklassniki.
To Summarize
In 2021, the transition of cosmetics customers from offline to online channels is expected to continue as a prevailing trend. Therefore, if you are seeking to promote a cosmetic brand in the Russian market, it is crucial to ensure maximum online presence, including a well-developed website, active engagement on social media platforms, and strategic utilization of marketplaces and other relevant digital channels.