There were more sunny days in 2011 than in the previous years, both for the summer travellers and the sun care industry. The sales of sun care products in all Balkan countries increased compared to 2010, as the sector slowly carved its way out of the crisis. The main reason for the growth of the sun care sector on the Balkans however remains the large gap in the consumption locally and across other European countries. However, consumers across the region become increasingly educated about the potential threats from the sun rays and are increasingly searching for ways to protect themselves, which have driven most of the markets in the Region up in 2011.

Bulgarian market flourishes because of more foreign tourists

The growth of sun care product in Bulgaria is driven mainly by the tourists – both incoming and domestic. The sales of sun care products remain highly seasonal and concentrated in the large cities (where domestic tourists usually shop before their vacation), and in the Black Sea resorts, where the majority of the foreign tourists spend their holidays. Consequently, because of the good summer touristic season in 2011 the sales growth in the sector, and especially the sun protection subsector, was noticeably faster than the growth in 2009 and 2010, when bad weather conditions and economic uncertainty lined up against the industry.

Main market players are Beiersdorf Bulgaria, L`Oreal Bulgaria, followed by smaller retail players such as Johnson & Johnson Bulgaria and Aroma. Direct sellers like Avon and Oriflame are also holding strong shares within sun care products, with the Avon Bronze line successfully competing with Eucerine and Garnier lines marketed by the market leaders. Overall all products on the market recorded growth, and the fastest growing products were sup protection sprays and creams with high protection factor.

The prices in the category have grown slightly over the review period. The large number of foreign tourists visiting Bulgaria during the summer months was among the main factors maintaining prices' growth. Foreign tourists are an especially strong factor for value sales since they buy relatively expensive and high quality products, such as Nivea Sun (by Beiersdorf) and Delial (a product of L’Oréal) and use significantly more creams and sprays than local tourists. However, all market players are offering active promotional discounts, gifts, etc. in order to attract more consumers, especially from the local consumer base. Moreover, most manufacturers are also trying to escape the seasonal image of their products by conducting educational campaigns, which to promote the usage of sun protection on a year round basis.

Sun care usage in Bulgaria has traditionally been lower than the average in the EU. Therefore, companies had to promote more actively the usage of such products as a whole instead of concentrating on specific products and brands over the review period. However, this trend is beginning to change and in the last couple of years promotions of specific product features started appearing in Bulgarian media and outlets.

Although usage of sun care products in Bulgaria still remains relatively low compared to other countries in the region, the category has significant potential as consumers' habits change to become more in line with the rest of the European Union’ countries. Self-tanning products can be expected to continue their strong performance over the forecast period and this is expected to be the most dynamically developing category. This category is not as highly seasonal and sales are strong all year round, driven by the fashion trends and women’s desire to look better with darker skin, even during the winter.

Note: Data for the year 2013, 2015 is fprecasted.

© Euromonitor International

Serbia is searching for a way out of the crisis

The market in Serbia is driven by different factors than the Bulgarian one. The majority of consumers of sun care products in Serbia are domestic tourists or people, who are planning their vacation abroad. As Serbia has no access to sea, most Serbians spend their summer holidays in Greece or Montenegro, and are usually stocking with local Serbian products, including sun care products, prior to their trips. However, in recent years because of the crisis many Serbians tried to limit their traveling as much as possible, which brought stagnation on the sun care products market. In addition, there are some people in Serbia who purchase sun care as they are aware that during the summer their skin is in danger of over-exposure to the sun’s rays. They are typically people who live in urban areas as the number of those who are health aware is visibly higher than in Serbia’s rural areas.

Overall the sun care products sales recorded impressive current value growth of 15% in 2011. However the major reason for this was the high inflation in the country, rather than organic growth within the category. Volume sales for example grew only modestly and are still remaining on levels well below its peak from 2008. Serbia was hit badly by the global economic crisis and is slow to recover, as it is still considered a risky destination by the majority of investors and had to count on own resources to restore its economic growth.

The market leaders on the Serbian markets remain multinationals such as Beiersdorf or Sarantis. However in recent years the market witnessed the arrival of the first private label products from the drugstore chain DM and the supermarket chain Delta Maxi. Private label products managed to carve a position because of their low unit price, which is the major decision factor for the more price sensitive consumers in Serbia.

The perspectives for the Serbian market are not very bright either. Although the sales will continue to grow in future, the rate of increase will be much slower than the growth witnessed in the 2006-2011 period. Serbian consumers have low purchasing power, standing at 35% of the European average, so it is less likely that they will increase their cross-border trips much in the coming five years. Consequently the local purchases of sun care products can increase dramatically only in case of a rapid increase of everyday usage of such products within the country, which is not very likely to happen.

Romanians in search for cheaper and healthier products

Although the sales of sun care products were somewhat immune to the effects of the crisis, the decreasing purchasing power of the Romanians had its negative effect on the sales growth. The major obstacle for the fast growth of the market in Romania was the fact, that with their disposable incomes stagnating or decreasing, many Romanians reconsidered their expensive trips abroad, and the traveling Romanians are still remaining the largest consumer group for the sun care products. Romanians trust more the local market as they are usually purchasing their sun creams from pharmacies where they can get a professional advice, and are usually stocking on such products before they departure to their destinations. Therefore with the reduced traveling the sales of sun care products also slowed down in the last year.

Overall the sun care market slowed down significantly in the last 3 years and even declined slightly in volume in 2011, compared to the double digit growth experienced before the crisis hit in 2008. According to the main market players in the country the main effect of the crisis were that consumers became more price-sensitive and are searching for better ration between price and quality. The fastest growing on the Romanian market were the products with high protection factor (30+). The demand for healthier, close to nature and preferably organic products is also increasing. Unlike other markets in the Region, the Romanians are searching for more products, which can provide care and hydration before and after exposure to the sun, therefore after sun sector is growing faster there than for example in Bulgaria or Serbia.

As a result of the change of consumer preferences towards more economy brands, the average consumer prices in Romania declined in constant value terms in 2011 compared to 2010. The main market players, and especially Beiersdorf, Farmec and Avon, launched a lot of awareness campaigns, and tried to counter the negative effects of the decreasing number of local tourists in short term by promoting year-long usage of their products. Many companies are also using Internet promotions and social networks such as Facebook to further increase the brand loyalty of their consumers.

Despite the current slowdown, it can be anticipated, that the market would fast recover over the coming five years, and the sales will grow by a compound growth rate of 5% until 2016. The main drive for the growth is again expected to be the local tourists, who are going to renew their vacation trips to the Bulgarian seaside, Greece or Turkey.

Ivan Uzunov

Euromonitor International