Synergetic launches a line of facial skin care products

A noticeable reduction in the assortment in cosmetic chains after the departure of Western brands from the Russian market allows companies that operate in related industries to launch their own lines. This is, for example, what Synergetic, a manufacturer of household chemicals and personal care products, did. However, this market is already experiencing serious competition not only from local brands, but also from manufacturers from Belarus and Turkey.

Synergetic is entering the cosmetics market by launching a line of facial skin care products, the company told Kommersant. New products will be produced at the manufacturer’s own site in Dzerzhinsk, Nizhny Novgorod region. The company cites the volume of investment in the development of the beauty business as more than 400 million rubles.

Synergetic is entering a new segment at a time when Russian retail chains have noticeably reduced the range of cosmetics for face, body and hair care. It declined 14% year-on-year from August 2022 to August 2023, according to NielsenIQ. The Golden Apple, however, speaks of an increase in the number of popular facial cosmetics items in the chain’s stores in January-September by 33% year-on-year, while the share of Russian brands in the assortment increased by 37.5%.

There is high competition among local manufacturers in the mass market segment, notes Petr Bobrovsky, executive director of the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals and Hygiene Products. A shortage of skincare cosmetics can only be observed in the luxury segment due to the departure of large foreign players, adds Anna Zhuravskaya, Managing Director for Commerce of Natura Siberica Group of Companies.

According to her, in the price segment up to 1 thousand rubles. per unit of goods, large foreign manufacturers remained on the Russian market. Moreover, new brands from Belarus, Turkey and other countries began to appear in this niche, adds Ms. Zhuravskaya.

Co-founder of NappyClub (manufacturer of products for children’s hygiene and household chemicals) Roman Kvinikadze notes that his company is also preparing to release skincare cosmetics for young mothers. In his opinion, the interest of manufacturers in the segment is logical: consumer consumption of such products for skin care cosmetics is the same as for household chemical products, but at the same time there is more maneuverability for pricing. “Face cream can cost 500 rubles or 3 thousand rubles, while household chemicals are more expensive than 500 rubles. It shouldn’t cost,” he says.

In the category of face creams, high loyalty to the brand is demonstrated by buyers who are ready to purchase products at a price of 450 rubles, clarifies Anna Zhuravskaya. In the lower price segment, cost plays a bigger role than brand recognition, adds Peter Bobrovsky.

The expert believes that Synergetic will not use complex formulas and compositions for the production of skincare cosmetics and will be able to provide itself with raw materials through purchases from suppliers that provide the company with products for the production of household chemicals.

At the same time, consumers began to reduce spending on cosmetics. According to NielsenIQ, sales of facial care products in January-August 2023 decreased by 3.5% year-on-year, and facial cleansing products decreased by 10%. The Golden Apple, on the contrary, claims that in their network in January-September, revenue from the sale of skincare cosmetics doubled. Experts interviewed by Kommersant note an increase in revenue for many cosmetic chains, but attribute this to an increase in the average bill due to increased prices, not demand.

Alina Savitskaya