PARIS — European beauty firms are looking east for growth.

Eastern Europe — Russia, in particular — is a burgeoning beauty market, while French pharmacies are presenting increasing challenges for little-known niche brands, said speakers at a recent conference here.

In Russia, evidently, luxe is more. The country, said Anna Dycheva, vice president of ExpoMediaGroup Staraya Krepost, is now Eastern Europe’s largest market for beauty products with $5.4 billion in sales last year, a 20 percent gain over the prior year.

“Quality is the priority for Russian consumers now,” said Dycheva. “So the trend is toward more expensive products. Luxury products are booming and niche products are now starting to emerge.”

Although giant distributors such as Sephora have already made headway into the market — the LVMH Moët Hennessy Louis Vuitton-owned chain opened its second Russian outlet in June — Dycheva said there is still potential for further growth, particularly in the areas of color cosmetics and hair care.

The growing popularity of niche brands in Russia was further developed by Igor Yakovlev, commercial director of cosmetics distributor MB-Impex Group, who said the country was “on the verge of a niche-brand boom.” His firm, which distributes brands such as Thalgo, Valmont, Nuxe and Nickel, is now targeting nontraditional customers such as men, children and the retired.

Another conference revealed, however, that lesser-known brands face difficulties when distributed through pharmacies in France. The conference focused on the risks and difficulties of distributing beauty products in pharmacies based on a recent market study of nearly 900 pharmacists here, conducted by Direct Medica.

The report revealed that more than 40 percent of pharmacists would not stock new beauty brands because they are considered too “risky”: Staff would need training to become familiar with the products, which must also be good enough to be recommended by a medical professional.

On the other hand, pharmacies remain a potentially lucrative outlet for cosmetics distribution, particularly in skin care and sun products. Sophie Kerob, managing director of Direct Medica, said most French women seek advice when making such purchases and would therefore go to someone they trust, such as their local pharmacist. Still, Kerob cautioned that there is still “a gap between what female customers are looking for and what pharmacists understand they need.”

This story first appeared in the October 27, 2004 issue of WWD. Subscribe Today.

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These discussions took place at the second annual Cosmeeting beauty trade show here, held Sept. 22 to 24, which attracted more than 12,500 visitors. In addition to the conferences, the event showcased a range of products and services supplied by 750 companies worldwide, from start-ups to the long-established.

As well, the pervading question of what beauty consumers look for was discussed at length in a series of standing-room only seminars on the global spa market. Three of the 10 conferences hosted by Cosmeeting focused on the spa business, their partnerships with hotels, and their cross-cultural variations.

Panels of industry professionals discussed, debated and dissected every aspect of the business — from the physical design of spas to whether foreign treatments, such as Ayurveda, can successfully be imported or exported.

“The most important thing is to do what you do best and love best; you must be true to yourself,” advised Elizabeth Thomas, international education manager of Comfort Zone spas. “Many people today want a spa ‘experience,’ but they also want to see results. So we need to make sure we give them treatments that work so they will be happy with the results.”

A series of new initiatives was also launched at the show, such as the Beauty Challengers Awards, a competition that rewards the most creative niche brands. Winners were Institut Tres Bien, Viaggio, Fermes de Marie and Doux Me.

Cosmeeting 2004 also introduced other projects designed to bring those in the business closer together. They include the Beyond Beauty Lab, a think tank of industry professionals organized to promote fresh strategies on product development, marketing, communications and other services.

— Jennifer Joan Lee

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