Made in Poland. Will cosmetics soon become a Polish export commodity?
The cosmetics market across the EU shows an upward trend this year, making up for the decline in sales in 2020. According to experts from Centrum Analiz PKO BP, Europe is currently the world’s largest market for Beauty & Personal Care products. Its value is already close to EUR 76.5 billion. Poland, on the other hand, ranks 6th when it comes to the value of cosmetics sales. Over the last 4 years, global cosmetics exports increased by 16.5% – from EUR 115.1 billion in 2017 to EUR 134.2 billion in 2021.
“The cosmetics market in Poland is extremely competitive and saturated. This means that cosmetic companies are also looking for revenues on foreign markets. According to the data provided by the Polish Union of the Cosmetics Industry, Poland is the 14th largest exporter of cosmetics with a 3% global share. Italy and China achieved similar results. The value of Polish cosmetics for export is EUR 3.7 billion, which makes Poland the fifth strongest exporter in Europe, right after France, Germany, Italy, and Spain” – notes Katarzyna Bochner, editor-in-chief, Wiadomości Kosmetyczne (www.wiadomoscikosmetyczne.pl). “The main export destinations for Polish producers in the first quarter of 2022 were European countries. For years, Germany has been the largest recipient, to which 21.2% of Polish cosmetics were exported. The next three recipients are: Great Britain, the Czech Republic and Belgium, which bought a total of 22.7% of cosmetics exported by Poland (source: Statistics Poland, data for the first half of 2022)” – adds Bochner. However, it is also worth watching other markets closely, including Romania and Hungary, whose value of the e-commerce market, also in the beauty category, is gradually growing.
Beauty knows no bounds
Sylwia Włodarczyk, Business Growth Specialist, talked to Katarzyna Jaśkiewicz, Export Director of the HAGI natural cosmetics brand, which has been successfully implementing the export strategy for several years.
What was your path to entering other markets with the HAGI brand?
The decision that Hagi will be a brand present on many foreign markets was made in the first months of its existence. Initially, it was a rather general vision and quite quickly Hagi cosmetics and candles found their way to store shelves in Great Britain, Canada and Taiwan. Since July last year, the vision has begun to transform into much more planned activities aimed at building our distribution abroad. One of the first steps on this path was taking part in the Eco Living Scandinavia fair and presenting our offer to a wider, international group of potential customers. And it turned out we hit a home run! The event resulted not only in establishing regular cooperation with the Scandinavian market, but also in the prestigious Best New Skincare Product 2021 award for our Hagi Phases series of cyclesensitive creams. This gave us great motivation to continue our activities and strengthen our presence, not only in Poland.
What is the specificity, similarities and differences between the markets and consumers from CEE or the West and the Polish market?
When talking about foreign markets, it is important to remember that each of them has its own specificity; even a seemingly homogeneous EU market is characterized by very diverse and numerous habits, expectations and preferences of consumers from different countries. Today, many brands base their development on widely understood green solutions, which often results in the effect of “greenwashing” in communication.
It is interesting to see how each country reacts to this phenomenon. On the German market, the effect is to attach great importance to all certificates awarded to products. On the other hand, very conscious and ecologically educated Scandinavian consumers are impressively resistant to paying lip service to “cruelty-free” products – because they know that in Europe every legally authorized cosmetic is cruelty-free.
Why did you decide to be present in these markets?
Certainly, for every company planning to enter foreign markets, the first choice is the culturally and geographically close European markets. This was our case too. Unified EU regulations, low logistics costs and similar expectations of consumers regarding the effects of cosmetics have decided that we want to develop the distribution of our products in Europe. Which does not mean that we are not present in other, more exotic countries, e.g. in the United Arab Emirates.
Is it difficult for a cosmetic brand from Poland to appear on a foreign market? How are Polish products received?
Polish cosmetics brands are a growing power. There are more and more of those that represent the natural flow, and Hagi is one of them. Thus, the competition is huge. At the same time, the quality of today’s Polish cosmetics is not inferior to German or French ones. Polish brands use innovative solutions and raw materials, remaining in line with global trends. Foreign consumers are beginning to see this and place more and more trust in Polish cosmetics. I think it is also due to the support programs for the Polish cosmetics industry in the world, implemented, among others, by PAIH offices.
Marketing plans for 2023?
Communication with our consumers has always been important to us. In social media, Hagi often speaks in the authentic voice of our President – Agata Borzym. Our plans for the next year include reaching a wider group of our consumers with this message, also on foreign markets. This is crucial for us. At the same time, we realize that marketing activities carried out by our business partners in other countries work best, so we will work closely with them in this regard.
What marketing campaigns have caught your attention?
Marketing today is much more than advertising campaigns. Many brands, aware of the power of their voice and the role their message plays in shaping attitudes, especially among young people, do a great job of engaging in various social campaigns. For Haga, as a brand created and managed by women, it is important to create a comfort zone for all women and improve their quality of life by paying sensitive attention to their needs. That is why we felt close to the project organized in cooperation with the Interdisciplinary Childhood Studies Research team of the University of Warsaw and the Kosmos dla Dziewczynek Foundation “Dziewczynki i dziewczyny” (Girls and Young Women), i.e. the first scientific conference in Poland supporting women of all ages in their true way to find themselves, debunking myths, and normalizing taboo topics. Hence the decision to take patronage over this conference.
What advice would you give to other companies thinking about expansion? Where should they start?
The benefits of foreign expansion for the brand are obvious. However, one should also remember about the pitfalls and threats related to the internationalization process, which may expose the company to, for example, losses resulting from ignorance of the regulations on the local market or other failures, and as a result, discouragement from further development abroad. Therefore, it is important to prepare and plan activities based on the resources available to the brand. It is also worth reaching for help in the form of various forms of support, whether financial or in the field of know-how, offered by various institutions and marketing agencies. And it is good to have an experienced crew on board during this trip, who will efficiently avoid all reefs and safely reach a new land!
Thank you for the conversation.
Data source: Cosmetic industry | Industry Reports | Export Support Platform | (supportexport.pl)
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