Major beauty players focus on price competition in Georgia

Beauty and personal care is more expensive now in Georgia, but the leading players in the industry are trying to limit price increase to retain their consumers, shows latest research by London-based market research firm Euromonitor International.

The agency’s report provided insight into retail value sales of beauty and personal care across Georgia in 2015 and revealed the largest areas of spending were baby and child-specific products, bath and shower products and colour cosmetics.

Consumers in Georgia continued to buy beauty and personal care products despite the higher prices, however premier segment stagnated in many product areas in 2015, said Euromonitor International.

The market research firm explained, price increase on beauty and personal care products was caused by the devaluation of the national currency Lari that affected this market in Georgia.

As beauty and personal care continued to be dominated by imported products, the devaluation of the Lari impacted on unit prices in 2015, said Euromonitor International.

To note the Lari started losing value against foreign currencies by the third quarter of 2014, and by the third quarter of 2015 it had been devalued by up to 30 percent. However, many beauty and personal care products were considered necessary and consumers continued to buy them, which, along with higher unit prices, stimulated retail value sales growth, said the report.

Premium shares stagnate in many categories in 2015

The economic uncertainty among consumers due to currency fluctuations hampered the performance of premium products in beauty and personal care, the research showed.

As unit prices grew and disposable incomes decreased, consumers were less confident about higher-value purchases. As a result, the retail value shares of premium segments stagnated in many product areas in 2015,” said the report.

The leading companies retain their positions in 2015

In 2015, the demand for the leading companies’ brands remained stable despite the rise in unit prices caused by national currency devaluation.

Whilst unit prices rose and disposable incomes decreased, consumers continued to purchase their favourite brands. As retail value sales increased due to higher unit prices, the leading players consolidated their positions in the industry. This reflected certain level of brand loyalty among local consumers,” said the report.

Companies are more wary of new product launches in 2015

Companies mostly avoided major new product launches and heavy advertising campaigns in 2015. New product launches tended to be extensions to existing brands, without significant marketing and promotional support.

The leading players in beauty and personal care focused more on price competition, trying to maintain or limit increases in unit prices, in order to retain consumers,” said Euromonitor International.

More moderate value growth is expected over the forecast period

Euromonitor International did not expect the forecast period to face dramatic changes in 2016 and predicted many categories to enter a higher stage of maturity this year.

"However, steady growth is anticipated for most categories as modern grocery retailers expand further and raise awareness among consumers through wider assortments of beauty and personal care products,” said Euromonitor International.