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Sunday, April 20, 2014
News Making Money

Investments in Perfume Market Continue Despite Great Losses in 2012

Written by Mariam Papidze, The FINANCIAL

27/01/2013 20:49 (447 Day 18:59 minutes ago)



The FINANCIAL -- The retail turnover of enterprises in the trading of cosmetics and perfume reached GEL 83 million in 2012 while the same turnover in 2011 consisted of GEL 158, according to the National Statistics Office of Georgia. A decline is evident in imported products as well. 360 tons of perfume and other cosmetics worth USD 9,000 was imported in 2012, while 683 tons, worth USD 15,000, was imported in 2011.

The largest importers of perfume and cosmetics in Georgia are Oriflame Georgia, Prestige, Stile, Floreal and Avon Georgia, according to Geostat.
Oriflame Georgia claims to be the leader of the cosmetics and perfume market in Georgia as Euro Monitor named Oriflame Georgia the number one company in the country. “Oriflame is the number one brand in the Georgian cosmetics market. We hold an 11 percent share of the market here,” said Levan Bokuchava, Country Manager at Oriflame Georgia.

“We have learnt from our experience in Armenia and are going to enter Azerbaijan as well. Georgia is truly becoming the hub of the Caucasus region,” he added.

“There was a time when we had 100 percent growth. This was when the market was untapped and the competition was low. New competitor companies together with the Russian-Georgian war and world economic crises lead to a decreased growth dynamic. We had only 2 percent growth in 2009 and 2010. After 2010 we already had 10 percent growth. This will be a difficult year in terms of economic perspectives. We predict growth in 2014, which will be a profitable year all round for businesses worldwide,” he added.

Out of a thousand types of products the perfume Paradise is the bestseller at Oriflame. As for cosmetics, the brand Giordani Gold is the most popular one.

“Ici-Paris has developed dynamically in Georgia and makes up a significant share of the perfume market,” said Paata Gigauri, one of the founders of Ici-Paris. “Today we have about 20 stores and many international brands here. The only thing that would prove helpful for improving the market today would be an increase in the general solvency of society.

Our competitors include the companies that have direct sales, like Avon and Oriflame,” he added.

Chanel has been the bestselling brand at Ici-Paris in recent years.

“The main problem on the Georgian market is the circulation of counterfeit products,” said Vakhtang Pkhakadze, President at Lutecia, perfume trade network. “We need our government’s help to prevent the selling of counterfeited products as it damages the country’s economy in general. Such products are mainly being sold in non-branded stores on Aghmashenebeli Street. We want to found the Association of Perfumers in Georgia which will fight against such adulteration. So that there is no need to buy counterfeit products at “lower prices”, the Border Service together with the Association of Perfumers should control the market so that it may be protected from the selling of black market goods. We run advertisements worth EUR 30,000 per brand every New Year and in this way raise awareness of the brands. Our advertisements are used to the benefit of the merchants of counterfeit products however, which sell their products successfully as the brands are well known to consumers thanks to us. This is not at all fair. This is not good for the economy either, or for business. Together with Yves Rocher we occupy half of the perfume and cosmetics market in Georgia,” he added.

“As for our profit, only in Batumi did we have growth by 130 percent, but by 10 percent in general last year. We are bringing the perfume brand Mac to Georgia, which will have a store opened in the new merchant centre Merani on Rustaveli Avenue. There will also be a Zara and Massimo Dutti present in Merani. A 300 sq. metre new Lutecia store will be opened there as well. This project will be implemented at the latest in May. Bringing Mac to Georgia is a very expensive investment on our part. We hope to see a return on our cash after three years at least. The furniture alone for the Mac store is costing EUR 12-180,000. In total this is an investment of more than half a million Euros,” Pkhakadze said.



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