Russia: developing market for natural and organic cosmetics

The Russian specialist Dr. Kirsten Hüttner from Stuttgart is in no doubt – Russia is an interesting market for natural and organic cosmetics that companies cannot afford to ignore. Over many years, the manufacturers of natural and organic cosmetics, Styx and Weleda, have gained a lot of experience in this market, and Börlind is active in Russia too. Dr. Hüttner chaired the panel discussion at Vivaness that she called “Russia on the move - the advance of natural and organic cosmetics”. (Picture: The panel discussion reported on experience of the Russian market)

Dr. Kirsten Hüttner knows the Russian market for natural and organic cosmetics, and she advises firms that would like to place their products there. In her mind there is no question that these products have a great future in Russia. She had invited Natalie Yarmolenko, Weleda, Michael Lindner, Börlind, and Wolfgang Stix, Styx, to take part in the panel discussion. (Picture: Dr. Kirsten Hüttner sees great opportunities for natural and organic cosmetics in Russia)

The Austrian natural cosmetics company Styx has the longest experience of the Russian market. In the course of 17 years, the owner of the company Wolfgang Stix has succeeded in placing 200 products in 4,500 outlets – mainly pharmacies – and setting up five stores of his own as logistics. Styx supplies the Alpin Derm line to sanatoriums, which accounts for 30 % of his turnover. New markets he recently started trialling are drugstore chains and perfumeries. The Austrians claim to be the market leaders in the natural and organic cosmetics segment in Russia.

Wolfgang Stix’s overall assessment of the Russian market is positive. He says that Russian women have an affinity with nature, both in terms of food and cosmetics. He thinks natural and organic cosmetics have huge potential, even though you are constantly confronted by challenges. Natalie Yarmolenko’s evaluation of the market was similar. She said it is young and dynamic, its character has not yet been shaped by the the big conventional companies, and it is very receptive to new products. Weleda has been represented in Russia for twelve years and is now listed in 1,200 shops. However, Michael Lindner, who has not had contact with the market for as long as the others, said that he finds luxury and glamour to be very dominant in the cosmetics sector. Nevertheless, his view is that the market is interesting for companies marketing natural and organic cosmetics. He said: “The time is ripe for Russia”. (Picture: Natalie Yarmolenko, Weleda, and Michael Lindner, Börlind)

Natalie Yarmolenko reported that a lot of things have happened on the natural and organic cosmetics front in Russia over the last three years. For example, there is more reporting in the media, and the problems surrounding conventional cosmetics are being discussed. She said the country was hit hard by the economic crisis but is now on an upward trajectory that you cannot fail to notice. Since the beginning of this year, Styx has registered a massive rise in demand. Wolfgang Stix’s explanation was that Russian women would rather economise on other things than cosmetics.

This Austrian entrepreneur describes as a challenge the sometimes rapid changes in legislation and the fact that much is controlled by the State. In his view, therefore, it is essential to have a reliable partner on the spot to keep you up-to-date with information, so that you can react flexibly and promptly. He said greenwashing is a problem. Even when they are far from being natural, lots of things in the cosmetics sector are described as natural. So certification and logos are all the more important. He pointed out that customers like to be guided by labels, and they are in general well informed. For this reason, firms have to be ready to respond to detailed enquiries. (Picture: Wolfgang Styx has 17 years experience in Russia)

Practically all the sales channels can be used to market natural and organic cosmetics in Russia: pharmacies currently stock Börlind, Styx and Weleda brands. Perfumeries, department stores, drugstores and specialist shops are further potential outlets. Cosmetics institutes, sanatoriums and specialist shops for babies and children purchase special products. The online trade is regarded by everybody as a sensible addition. Internet presence is vital in particular for rural regions, where access is a problem.

A special feature in Russia is the shop-in-shop system: in pharmacies, for example, you find an article from the product range as a tester in a glass case. The firm works with a sales advisor who shows the products to the customers, explains and takes orders. This system is common and functions well. “The customers don’t mind waiting,” says Wolfgang Stix.