The market for beauty and personal care products in the Balkans has been developing under the mark of the economic crisis during the last five years. Sales in most of the countries in the region entered stagnation, and manufacturers relied entirely on price discounts in order to maintain their sales. Consumers on other hand reacted to the crisis by lowering the frequency of their purchases and also getting fixated to the low prices and the discounts. The smaller markets in the region were more affected by the crisis because of the low disposable income of the local consumers. However, those were also the markets to first get out of the crisis during the course of 2011.

The situation was even grimmer in the sector of men’s grooming products. Balkan men are more conservative than their counterparts form Western Europe, and are more willing to give up the purchase of cosmetics in the time of economic uncertainty. Thus the category, which was enjoying double digit growth in all the countries in the region prior to the crisis, suffered larger current value decline than the overall beauty and personal care sales. The recovery in 2010 and 2011 was also somewhat slower. The value decline was fuelled further by the declining unit prices of the main products in the category.

There are important differences between the different countries in the region, however. While in Bulgaria the population is highly concentrated in cities, with 72.5% are living in urban areas, in Serbia and Romania this percent is around 60%.  The profile of the consumers of men’s grooming products in Bulgaria, Romania and Serbia is also changing rapidly over the last five years. People in urban areas are increasingly experimenting with new products and brands, which creates dynamic market with low levels of brand loyalty and hunger for new product launches. On other hand in rural areas consumers remain highly conservative and are purchasing only products nessesary for the main cosmetic procedure for men – shaving.

Note: Data for the year 2011-2015 is forecasted.

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Serbia

Men’s grooming in Serbia experienced strong growth in 2011, around 12% in average, which was a result of economic recovery in the country. The category is very sensitive to purchasing power contractions for two reasons: while their disposable income is decreasing, consumers quickly down trade to cheaper brands, and start using unisex or women’s skin care, hair care and bath and shower products. As 2011 is a year in which full recovery of the market was on its way, growth rates for all men’s grooming categories reached double-digit values after negative growth in 2009 and only slight increase in 2010.

Leader on the market in 2011 was Beiersdorf doo with its Nivea portfolio, accounting for 13% of value market share, followed by Colgate-Palmolive Co and Gillette Co, The with respective market shares of 9% and 7%. One of the most important developments in terms of new product launches is recent release of the Balea private label by dm Drogeriemarkt. Even though consumers are still showing high brand loyalty in men’s grooming, it can be expected that private label products will gain on significance over the forecast period due to general trend of growing popularity of private label in Serbia across virtually all industries.

Furthermore, premium men’s grooming brands are limited as mass ones remain by far dominant in the Serbian market. It is expected that this will not change in the near future due to the fact that most Serbian men are satisfied by the current offer of mass men’s grooming products. It is also important to state that of all razors and blades for men sold in Serbia, almost three quarters are disposables, speaking in value terms. This type of razor/blade is traditional in Serbia and in the past this was only available format. Systems razors account for around 15% of the Serbian razors and blades market by value, while refill blades for systems razors account for 10%. The systems format has been present in the Serbian razors and blades market for a much shorter period of time and it is expected that its share will rise as systems razors are popular among younger men.

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Bulgaria

The men grooming products category in Buglaria has not been performing very well over the review period. Companies have only seen some success in their marketing efforts over the last couple of years as many Bulgarian men are still not convinced of the need and benefits of using specialized grooming products. In spite of major players' investments in new product developments, the category is still underdeveloped and the variety of products remains small in comparison to women’s products. Also, men’s grooming products are not yet well segmented.

Men’s shaving was the category's backbone over the review period. The majority of the sales are generated by disposable shaving products as they are much cheaper and offer more convenience. This trend continued during the review period. However, more innovative systems such as refill blades are gaining popularity as new products are developed more frequently. Men’s skin care was also among the categories that showed good overall performance over the review period. Men’s bath and shower products and men’s skin care are purchased mostly by men less than 35 years of age, usually from larger cities. They are influenced not only by advertisements but also by the global ‘metro sexual’ trend.

Due to the small size of the category and the relatively low usage of men’s grooming products, premium brands do not yet have significant presence on the Bulgarian market. The relatively low popularity of men’s grooming products is the main reason for the lack of premium brands and the category is dominated by the multinational brands such as Gillette (distributed in Bulgaria by The Gillette Co) and Nivea for Men (property of Beiersdorf Bulgaria EOOD) – both positioned in the middle market segment.

The men’s grooming sector is likely to see positive growth over the forecast period as men's habits in regard to cosmetics are changing and Bulgarian men are starting to use more grooming products, in addition to the traditional razors, blades and post-shave products. New product launches, particularly by multinationals, will continue to raise the quality standard of products. Local companies are likely to follow the general trends and develop similar offers during the forecast period, offering cheaper alternatives to popular multinationals' brands.

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Romania

The sales of men grooming products grew 2,6% in 2011. The main driver of growth was the recovery of sales in urban areas, where advertising campaigns and lifestyle magazines have popularised further the concept of skin care for men. The urban consumers in Romania are usually young professionals with above-average income, who care more about their appearance and take an interest in the cosmetics they use. In addition to this, the expansion of retail chains stimulates sales of certain grooming products in the rural environment.

Premium and high-end products such as face creams and lotions were present on the market for quite a few years now, but their popularity remained low. Currently, products in the premium segment account for only a very small volume share, and it is expected to see moderate growth over the forecast period. However, this segment contributes to overall growth in value terms, with loyal customers who are willing to test new products and are interested in their personal appearance.

Men’s products are gradually becoming more sophisticated, and advertising in this category is increasing in all media. There were numerous launches in men’s grooming, ranging from new edge-design razors to face balms and creams. Advertising for most men’s products stresses the dynamism of the consumer, youth, outdoor lifestyles and a unique experience. However, there are still products which need to be introduced to urban areas because men are not yet fully familiar with them. Others have become familiar to consumers in urban area, but need to be introduced to their rural counterparts. Hence, adjusting promotions/advertising to location is essential for a successful campaign and to achieve higher sales.

The market is dominated by multinationals like Beiersdorf Romania or Gillette. The presence of local manufacturers is most evident in the economy segment. The most notable is Farmec, with its brands Athos and Tarr. Competition between the various market players is expected to grow significantly over the forecast period, although local companies are only expected to cover niche areas of no interest to the multinationals.

Overall, in all three markets the men’s toiletries are expected to increase in popularity, and the main product launches are in that direction. Men’s skin care is the sector with the highest growth potential. Men’s shaving, however, would remain the largest category over the coming 5 years, and the larger part of the Balkan consumer would remain conservative and less opened for innovations.

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Ivan Uzunov

Senior Research Analyst

Еuromonitor International