Meet the general manager of Nivea brand in Ukraine.
Oliver Schrader
Time in Ukraine: 2 years
Nationality: German
Position/ Activity: General Manager of Beiersdorf Ukraine
Tips for succeeding in Ukraine: Understand and stay close to your customers.
A walk down Kyiv’s main street Khreshchatyk never fails to impress. Countless gorgeous women parading in the highest of heels, impeccably dressed, sporting the latest fashion designers’ creations.
The famed attention Ukrainian women put into improving their notorious beauty is almost enough to make the country a dream market for any cosmetics company. And as if that was not enough to whet the appetites of international players, local consumers are highly receptive to well-known names.
“Ukrainian consumers love international brands,” says Oliver Schrader, director of Beiersdorf Ukraine, a Hamburg-based personal care company that owns the Nivea brand.
Best known for its iconic blue-boxed skin cream, Nivea produces a range of personal products including body lotions, face scrubs and shiny lip moisturizers.
That does not mean, however, that the company is dependent on women for its income. Quite the contrary, Schrader argues, as men account for close to half of sales.
Indeed, while many of Ukraine’s women might complain the local boys are somewhat too coarse for their taste, Nivea’s experience tells a different story. With a broad range of shaving creams and lotions, deodorants and shampoos Nivea has managed to conquer Ukrainian men, the company director claims.
“In Ukraine, our share in men is one of the highest in the world,” he said adding that some progress could still be made on the hair style front.
These specificities may be a factor behind Nivea’s marketing strategy in Ukraine, which focuses on a broader, family-like appeal than the typical glamour route pursued by other cosmetics companies.
The company regularly employs spokespeople, including some superstars like Brazilian model Gisele Bundchen or Barbados-born singer Rihanna to promote their products. For the moment, at least, no similar plans for Ukrainian celebrities exist.
Instead, the company focuses on closeness to consumers, not least through the use of social media.
“We want Ukrainians to see that ‘this is a company that understands us and is close to us.’ That’s why, for example, we sponsor the national team,” Schrader explains. “We are also the brand with the most fans on Facebook.”
The strategy appears to be successful. In the decade since arriving in 2002, Beiersdorf Ukraine has boasted an average yearly sales growth of 20 percent.
Another feature distinguishing Ukrainian consumers, the director adds, is their fondness for innovations. His previous experience in dealing with the Nordic markets and Central Europe convinced him that Ukrainians are still not set in their habits and – a mere two decades after having begun their transition to capitalism – remain more curious consumers than their western counterparts.
The picture is not all rosy, though. While marketing appeal and sales may generally be satisfactory, disposable income remains a major barrier to growth. Average net earnings are just a fraction of those in European Union countries: in 2010 Ukrainians earned around $300, almost ten times less than French citizens.
Available income is around an eight of that in Germany, Schrader estimates, though spending patterns are a mitigating factor. According to the general manager, Ukrainians spend two or even three times more on personal care products compared to consumers in England or Germany as “a share of the wallet.”
Schrader remains optimistic, however, pointing to the Polish market as a gauge of Ukraine’s potential.
“We can be just like Poland,” he repeats, setting the target.
With Beiersdorf Ukraine slightly less than half the size of its Polish counterpart, despite Ukraine’s larger population, there is still room for expansion. In 2011 Nivea Polska sold goods worth around $150 million with an additional $106 million coming from the production plant Beiersdorf Manufacturing Poznan (of which 90 percent goes to exports), putting the group at 14.6 percent of the Polish market as of end-2011.
The Ukraine operations head forecasts that positive dynamics among Ukraine’s middle class could keep growth in the double digits.
His other proclaimed mission is to invite foreigners to discover Ukraine by praising its beauty and the hospitality of its people.
“I believe I am a bit like an ambassador,” Schrader says, recounting the many acquaintances he has convinced to visit. “So far, it seems I have been quite successful.”
Asked what he likes most about living in Ukraine, Schrader is quick to list Kyiv’s charmingly eclectic architecture, the people and the greenery. As an avid cyclist, however, he would prefer to see more development of bicycle lanes and green pathways.
“Car traffic has too high a priority,” he states.
A further improvement Schrader would like to see is the development of Kyiv’s beautiful waterfront, particularly in Podil where a wide road blocks the old district from the Dnipro.
“As I am from the seaside, I like wherever there is access to water,” the Hamburg native asserts. “But you do not have enough access to the river.”
Last but not least, the German director praises the excitement and potential of doing business in Ukraine. Challenges constantly pop up, he says, and there is a huge potential for growth as an individual in resolving them.
More than for any country, Schrader notes, in Ukraine it is really true that “impossible is nothing.” But that cuts both ways.
Kyiv Post staff writer Jakub Parusinski can be reached at [email protected].
