You're reading: Ukrainian beauty market gets makeover during pandemic

When everybody works from home and cameras are off in half of Zoom meetings, many cosmetic products seem pointless — especially when offline social interactions increase one’s risk of contracting COVID-19. 

Due to lockdown earlier this year and quarantine measures, sales of make-up products shrank by 15% in Ukraine to a total of Hr 7 billion ($249 million) in 2020, according to data from Euromonitor International, a market research provider. 

That was a blow to cosmetics companies. But the pandemic has also led to new trends.

With consumers afraid to frequent beauty salons, many are turning to online retailers for self-care and do-it-yourself products, according to Daria Kulaha, CEO of Happy Bunny, an online retailer based in Kyiv and dedicated to cruelty-free products. 

“The biggest trend is achieving professional results at home without visiting a salon,” she told the Kyiv Post. 

Social cosmetics

Kulaha said social distancing has affected sales of makeup this year, especially lip products — after all, masks cover the lips and smudge lipstick and lip gloss. 

Nadejda Krec, a senior analyst at Euromonitor International, says the data backs Kulaha’s observation. Lipstick sales decreased by 18% in 2020, reaching Hr 2.1 billion ($74 million), while general face makeup sales decreased by 16%, the equivalent of Hr 1.7 billion ($60 million).

According to Krec, the economic consequences of the coronavirus pandemic mean consumers are less disposed to spend money on beauty products, as household income is expected to continue to fall in the coming months.

The ongoing COVID-19 crisis, lockdowns and closures had a strong negative impact on color cosmetics and perfumes, as these are usually related to going-out, she told the Kyiv Post.

“Given the fact that most people are working from home, facing physical distancing and mask-wearing, it has become much less important to wear makeup and perfumes,” Krec said.  

Retailers like Brocard, Ukraine’s largest cosmetics retailer, had to adapt quickly. It entirely switched to online purchases. 

The retailer used to operate 100 shops in 26 Ukrainian cities but had to close 98 of them and suspended the purchase of new storage points for goods, according to retail analysis website UAretail.

“It will take more than a year before we return to pre-crisis indicators,” the company’s press service told the website.

The fall in perfume sales is not only due to lifestyle changes, but also linked to travel restrictions, Yulia Romanenko-Kopczynski, communications director at L’Oreal Ukraine told the Kyiv Post. 

Before the European Union closed its borders to Ukrainians in March to stop the spread of the COVID-19, around 40% of Ukrainian luxury consumers were buying products abroad and 20% of them were purchased in duty-free areas of airports, where it is less expensive than in Ukraine, she said. 

When the borders closed down, the vast majority of young cosmetics buyers turned to online platforms to buy expensive cosmetics and perfumes of their choice, a positive trend for online retailers. 

Buying online

Big online retailers were largely spared by the crisis, especially Makeup, the leading online cosmetics retailer in Ukraine, which covers over 170 Ukrainian cities with its own delivery service.

Customers stay loyal to their brands and repurchase the same products, especially in festive times such as Christmas, Makeup’s chief marketing officer, Lyubov Kalyuzhna, told the Kyiv Post.

In the first months of the quarantine, online shopping became the primary and often safest way to shop for many customers, she said. 

However, the main problem with online shopping is the difficulty of testing a product before buying it, a risky practice during the pandemic, and an impossible task during a full lockdown, when non-essential shops are closed.

That’s why the brand launched the so-called “Try if First” project, where fragrance brands add a mini sample of the fragrance to the order, o customers can test it home and return the unopened order if they don’t like it.

Such a strategy proved helpful for the retailer, which increased staffing and expanded its warehouses despite the crisis. 

“For a long time, online stores have been in the shadow of large offline retail shops,” Kalyuzhna said. Now, there is a chance for online stores to catch up using high-tech. 

And it is easier for small businesses to adapt, as Ann Sokolova, head of SKLVA perfumes, a small perfume producer, told the Kyiv Post. 

Her business model is geared toward online sales. That helped SKLVA not only maintain its previous sales but boost them with the launch of new fragrances.

Kulaha echoed this statement. She said her brand experienced an increase in sales throughout this year, but she acknowledges it has been easier for small businesses. 

“It’s easier to be a smaller business in these waters as you have more ability to maneuver than large old whales,” she said.

And despite being a major player on the market with 25 brands distributed all around Ukraine, L’Oreal also managed to go fully online, allowing the brand to sell more and more face care to do at home and purchases for the whole family, Romanenko-Kopczynski said. 

Home care and DIY

Self-care products were on the rise in 2020, according to numerous players on the market.

“People are ready to spend more on products helping them to make their home a more comfortable place,” Sokolova said. 

Soaps, hand sanitizers and other hand care products also increased, as people became more aware of hand hygiene practices, she said. 

According to Krec and data from Euromonitor International, skin-care, hair care, bath and shower products benefited from people’s need for pampering during harsh times. 

Makeup’s Kalyuzhna concurred, saying many care products for face, hair and body are always in demand, but they get especially popular during a period when people spend more time at home.

The other big trend lies in the growing popularity of do-it-yourself (DIY) products. Some beauty salons didn’t survive the crisis and shut down, while the work of others is restricted by the government’s measures. As a result, DIY hair coloring and nail care gained momentum. 

“Another outstanding trend is the rise of do-it-yourself beauty care,” Kalyuzhna said. 

According to a survey led by L’Oreal, 65% of hair salons’ customers deserted them during quarantine and 22% started to care for their hair at home. Some have even mastered their DIY skills: The survey shows 23% of customers say they will not go back to hair salons after the quarantine.

However, experts and business players remain optimistic. Krec said she expects the market to recover within three to five years because consumers will always enjoy beauty products.

For Sokolova, it goes deeper than that. 

“Old routines and habits help people to bring some stability to their lives,” she said. “So we expect cosmetics and perfumes to stay with us.”