Uzbekistan cosmetics Market research report

Uzbekistan cosmeticsMarket research report.docx

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Ⅰ. Uzbekistan cosmetics market conditions

 

 1. Market Overview

 

□ Market size and outlook

  ○ Current Population of Uzbekistan is 30490000 in 2015 ,population's male ratio is 38.5%, 61.5% Ratio of female over than man, 24 years old (born in 1992 / 01.09.1991 independence day), the proportion of young people occupy more than 60% .

-The total cosmetics market size is estimated to be about 7,600 million US dollars, in 2013 the cosmetics market has increased by 14% compared to 2012, the Korean cosmetics market accounted for about $ 1 million.

  - In Uzbekistan not only hand and body cream , various lotions , but also powder , colorful lipsticks and cosmetics  is not produced. More than 95% of the cosmetics market is dominated by imported products

 

 

 ○ According to Uzbekistan citizen's living standards and purchase improvement possibilities suburb and rural residents also began to use range of  

Uzbekistan possibility of improving people's living standards and purchasing, as well as to the results to city residents according the suburbs or rural residents also began to have an interest and it's usage also becomes different .

  - Uzbekistan  mainly imports cosmetics from France • Russia • United Kingdom • China and etc.

  - Leading brand's price is relatively expensive upper class high French brand Lancome, Vichy and visit Russia circulated a sales approach brand Faberic, the UK, Russia with Avon and price competitive brand Kalina, Krasnaya liniya as Chinese brand Golden Rose such that there is.

대표적인 브랜드는 비교적 가격이 고가로 상류층의 선호도가 높은 프랑스 브랜드 Lancome, Vichy 및 방문판매 방식으로 유통되는 러시아 브랜드 Faberic, 영국 브랜드 Avon 및 가격 경쟁력을 갖춘 러시아의 Kalina, Krasnaya liniya 등과 중국 브랜드 Golden Rose 등이 있음.

  - It is investigated that Korean cosmetics is not delivered by formal customs clearance to local beauty salons and online shopping mall centers , the majority imported products quantity is supplied by "grab bag"

  - Local women uses dark tones of cosmetics and using the most low awareness on cleansing cosmetics , instead uses soap in order to clean the makeup. Further there will be a steady prospect as the demand is being occurred for the perception of the skin care , revealing satisfaction for cleansing products, 

 

 

2. Import orientation

 

 □ Import tariffs and related systems

 ○ Customs Tariff

  - Cosmetics income tax is charged a 30%, consumption tax is 15 %.

  - Additionally, 20% of value-added tax is imposed.

 

       Uzbekistan cosmetics Tax Rate        Source: Uzbekistan Customs Service

Product Name	HS CODE	Customs tariff	Consumption tax	value-added tax
Cosmetics	3301-3302	30 %	15 %	20 %

 

○ Import items

  - Country's classification of market share related to cosmetics occupies 40% of Russia , 40 % of Europe ,China , including 20% of South Korea.

  - Mainly imported products of traders are makeup powders, lipsticks, eyeliner, eye shadow, mascara , foundation an etc, because dark tones of makeup is mostly preferred by Uzbekistan women

  - On the other hand, demand for the BB cream which has the characteristics of protecting from ultraviolet and external skin stimulation is increasing.

 

 

3. Market condition

 

□ Demand Status

 ○ In Uzbekistan, in case of upscaled high price cosmetics , French company products is preferred and other middle class Russia, USA, Germany, and Sweden. The demand for European goods is high.

On the other hand , the ordinary populace have high preference for China • Kazakhstan • Ukraine's products.

  - 17% of largest market share is occupied by L'OREAL , that gained high confidence . It has gained great publicity through advertisement.

  - Ruby Rose is followed by the L'OREAL occupying 13% of market share being the price competitive brands

 

□ Supply conditions

 ○ Most products are sold door-to-door sales by traders

Most customer base are their relatives , neighbors, and acquaintances. Beauty Shop and hair

 Shop also deliver small quantities of cosmetics. Korean beauty shop sells advanced products that requires high-quality products ,there is high recognition of Korean cosmetics in Uzbekistan and Korean cosmetics reveals its superior quality.

  - Merchants purchase the product in Korea 2-3 times a month. The most purchase is done in the sale period in the road shop ,most cheaper products low price brands in stores are bought in Dongdaemun and Namdaemun Market where is low recognition in Korea comparing with other cosmetics.

 

4. Competitive Trends 

□ Competitive products present condition

 ○ Cosmetics high price difference depends on its country of origin. There is 50~200% price comparing densely populated France expensive brands and Europe and Russian middle priced brands.

Importation cosmetics retail price classification by country

 (Unit: US dollars)

Entries	France	USA	South Korea	Russia	China
Powder	21.2	17	18.5	16.4	8.2
Foundation	20.1	19	15.4	19.5	10.5
BB cream	80.6	51	25.7	34.5	-
Eyebrow	7.7	3.6	2.5	13.4	2.5
Eyeshadow	55.2	10.5	9	20.6	8.2
Mascara	19.3	15.4	12.8	10.5	12.8
Lipstick	14.4	10.5	12.8	14.8	4.8
Skin lotion(set)	103.5	77.3	61.8	51.5	-
Nourishment cream	20	20	20	15.4	15.4
Moisturizing cream	20	20	20	16.7	20
Cleansing cosmetics	49.6	15.6	10.5	10.8	10.5

 

○ The most famous brands in Uzbekistan are L'OREAL, Ruby Rose, NIVEA, BOURJOIR Paris, Lancome, Dove, Missha and so on.

  -Despite its high price France and Europe gained popularity of consumer's trust with its good quality

  - USA, Russia, China need readiness to face with the price competition

□ Local recognition and major prospective product items of Korea

○ The current highly respected products of Russia and the United States is dominating the cosmetics market of Uzbekistan, Europe (France • Sweden • Germany, etc.) • China, South Korea followed by them

 

 ○ Korean cosmetics sales also increasing in the Uzbekistan cosmetics market than European cosmetics. Consumers should purchase a bundle traders Korea cosmetics through cosmetics in addition to specialized shops and markets in hypermarkets.

Increasing awareness of the Korea Cosmetic recognized the superior quality price, traders Korea bundle of importing cosmetics are soaring and there.

 

 

5. Effective market entry strategy

 

□ Actionable marketing plan

 ○ Contrary to popular cosmetics stores in local and foreign is that there is a tendency to stick to only the product used according to the situation that does not work samples demonstrating. If you expand the sample demonstrations for local customers who have preconceived notions about the new products, the market potential of new and diverse family of a local show no overheard.

 

 ○ Past cosmetics customers, but prefer products at competitive prices, "while (童顔 / anti-aging cosmetics), and awareness of skin care increases, customers plug in purchase consideration factors as quality increased and because in Korea companies abroad When you enter the product description when subjected to aggressive promotion by investing in catalog production and marketing for being expected to demand for Korean cosmetics with competitive quality and price competitiveness at the same time increased.

 

 ○ Local young people were starting to pay attention to the influence of cosmetics in Korea, such as Korean dramas or K-pop, Korea must be the promotion of sustainable cosmetics Korean Wave.

○ Note that, according to recently overseas, the most noticeable domestic cosmetic in the market is “BB cream”. BB cream is the product that was developed in Germany to work skin regeneration, but for being Korean product in the country has make up based functions such as play back function and UV projection, and while being reborn, had been affirmed being different cosmetic.

BB cream, in the center of country drama and K-POP in spite of blurring developed “Korean Hurricane” cosmetic, until the neologism made so-called “Korean cosmetic”, and got sensational popularity in Japan. It is globally being expanded in such countries as China and Thailand, Singapore, Indonesia, Malaysia, Asia.

 

 

Ⅱ. Market status of Korean cosmetics

 

 1. Market Overview

 

□ Market scale and view

○ The GDP scale of country cosmetic industry in 2010, 6 article 146 billion won comparing with 2009 it recorded 16,4 % growth, and country GDP preparation 0,51%.

 

○ In spite of depression of country cosmetic market which shows continuous suits bringing “defensive case” characteristic.

Especially, to do creation of invest preparing value-added branches, next, sustainable industry are being hand counted.

Top line growing country of country cosmetic company and thanks to the growth of Chinese cosmetic market, there are continuous views.

Increasing the female participation in an economic activity and rising the consumption of other capita cosmetic price, and even the expansion based on the age and gender consumption, country cosmetic market is hoping for sustainable growth. One more thing, the whirlwind increasing the number of Chinese tourists, for active expansion in Chinese market there is a point about increasing demand for Chinese domestic cosmetic, and the visibility of the long term growth of domestic cosmetic company is being increased.

 

○ On the one side, carbon emission is little depending on the weather change, and while being increased the importance of greener products, safety requirements of consumers about cosmetics are growing.

Depending on this, if organic natural make-up is taking a spotlight, next, everyone is regardless to price, and demand for eco-friendly product is widely increasing.

 

○ After 2005, the growth of the brand shop of the earnest Misha’to face shop  and home shopping, new distribution channels appeared lately market distribution and manufacture, separation of developing fields is being accelerated.

 

Due to the nature of sensitive make-up in trend, the distribution company, the production is outsourcing to ODM/OEM companies rather than directly managing and maintaining the factory itself, and the focusing on marketing and sale the products of distribution company is more effective situation.

 

 

  

○ The demand of cheap brand shops market for cheap make-up is being occurred.

The initial of market is continuing reaching 40-50% high speed, and market in which enter low barriers while leading the entry of special late companies, intensifying the competition became Red O’Shed market.

But improving the quality of exit and entry companies and strengthening production, and entry of large companies, market gradually began stabilization.

□ Changes in the market variables and views

○ Korea-EU Free Trade Agreement effectuation. Korea - USA FTA ratification

In 2011, significant changes were done to foreign trade agreement, but “Korea-EU FTA provisional effectuation ( 2011.11) and “Korea-USA " FTA ratification motion

 At first, to the effectuation of “Korea-EU FTA” the change of other make-up industry with a longest five year grace period the tariff abolition of all EU products, the case of direct dealings is increasing by country regulations.That is, after making possible Korean consumers to purchase the make-ups of EU with cheap price, make-up market scale is being more expanded

In addition to this' approved exporter designated "the FTA consulting operations, integrated business information system operation and export goods

Whether operating an integrated system that automatically FTA, FTA exports country of origin pre-qualified support, FTA amount of expertise

University courses opening for gender, FTA portal launched FTA utilization of government support such as support

It is expected to be.

○ Korea-USA FTA's case, goal enters into force and arranges to follow up.

Following Korea-EU and Korea-US FTA enter into force as the domestic market of global cosmetics companies will become furious

○ The government also considering it, decided to support the cosmetics damage industry up to 2015 regulations Korea -EU FTA

 

 

Ⅲ. Status of the world cosmetics market

 1. Market outline

 

□ Market scale and outlook

○ World cosmetics market size in 2010 was 2,422 billion dollars, according to Datamonitor last year it was 2331 one hundred million US dollars. the elevation was 3.9%

From now on steady increase is demonstrated from 2,518 bln dollars in 2011  to 2,931 in 2015

But it slowed somewhat after the growth of the cosmetics market in the world by various causes in 2007, little difference have been in the growth rate by region.

○ As Europe and North America's cosmetics dominated the global market growth rate decrease the growth rate of the worldwide cosmetics market expected the affected, In the case of developed countries due to market maturity, as well as left over the basic rate itself, under the influence of the recession it appears to have reduced the growth rate.

 

○ In the case of emerging markets due to relative immaturity of the market, despite the recession, the global credit crisis,

The time gap between the developed and influential propagate this economic downturn has blossomed in the cosmetics market appears to be minimal level.

 

 

 2. Area (Continent • Country) classification by Market Overview

□ Regional market scale and status

○ In 2010 the world markets biggest market scale was Europe (933 bln dollars), it occupies 38,5% of world market.

 The next market rate is occupied by Asia-Pacific region (72,5 bln $, 29,9 %) and North America (68,7 bln $ 28,4 % )

Middle East and Africa cosmetics market scale is small comparing to other regions (7,7 bln dollars), but it increased 6,7% compared to the previous year

 

○ Asia-Pacific region was very high growth rate of 4.9%,North America / Latin America showed a previous year growth of 0.6% p , 4.3% escalation in 2009.

           Total of the trend growth rate has increased in comparison with 2009, the country is   found to be greater fluctuations in Europe and North / South America.

□ Regional market scale status and outlook

○ The world market scale in 2010, the US cosmetics industry accounted for 14.5% of the total      market of 350 billion dollars fulfilling the largest market, it was followed by Japan, $ 30.8 billion (12.7%), China $ 17.1 billion (7.1%), Brazil $ 15.3 billion (6.3%), Germany $ 14.4 billion (5.9%).

 

○ In 2009,  growth rate of India (13.4%), Brazil (9.5%), China (7.9%), Mexico (5.2%), Russia (5.1%) countries showed such large figures.

   In addition, in 2015 the world cosmetics market in China (3rd) and Brazil (4th), India (9th) are expected to form a large market.

 

○ In the cosmetic market in India has been known to account for a high proportion of foreign brands, expensive high-income female population has increased demand for foreign brands cosmetics increased rapidly.

  In addition, due to the increase in middle class population will continue this sustained growth of foreign brand market is expected.

 

   ○  In 2010, European cosmetics market scale in Europe was $ 93.3 billion and grew by an annual average of 2.8%.

The size of the Skincare type of cosmetic 25.5 billion, with 27.4% accounted for the largest share,

Haircare 177 bln $ (19.0%), Fragrances 164 bln $ (17.5%), Personal hygiene 160 billion $ (17.1%) and was higher in rate.

 From 2007 to 2010 the largest type of growth with an average annual growth rate was 4.0% Male Toiletries, Baby Make-up and personal care type 3.9%, respectively, significantly higher than other types of 3.7%.

 

○ Cosmetics market scale in the country is linked to the $ 4.4 billion over 14 global markets, and accounted for 1.8% of the total market scale.

There seemed a high growth rate (4.1%) than previous year growth rate (3.9%) of the world cosmetics market share of the entire market is currently small, but the future is expected to be gradually expanded its scale.