Cosmetics Business in Poland

Insights from Polish business sector, cosmetics trade and Polish companies entrepreneurial approach

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The Service and Communication

The fight for new customers is, in all industries, a rat race, particularised by interpersonal skills, proper smiles, and matching abilities. A good salesperson knows how to match its promises and charater with the customers’ desires and personal expectations, establishing a base for long-term cooperation. Usually, it has nothing to do with the product itself but, it has to do everything with the service. On the cosmetic market, this is even more obvious, as all offers are very similar, with the trend being the religion of all companies.

The Service is the promise that comes with the match, which usually and wrongly, is expected to be ash suitable as the match itself. Although, the chemistry of sales, isn’t always followed by the chemistry of a proper service. The Service is also the real test for a long terms cooperation, comprising the elements that come hand in hand with a proper price, which are trustworthiness, timing and efficient communication. A company that can provide a good product, at a good price, with a good service is a catch, offering stability, the key element of development.

Even from my beginnings on the Polish exporters market, I noticed that the most problematic element in providing a good service is communication. The communication is the weak spot of Polish exporters, starting with the language barrier, induced by the fear or refusal to communicate in English of people involved in the service process, and followed by the lack of understanding and toleration for other cultures, other ways of thinking and other types of problems. Lots of people, involved in the service process, refuse to think out of the “Polish way of doing” box, which creates problems, time delays, and costs. To overcome the communication issue, lots of importers convinced by the Polish goods and willing to import from the Polish market, choose to hire agents or companies that help them to properly communicate with producers, in order to be correctly understood. In cosmetics, this trend is strong when it comes to big money markets, like Chinese, Middle East or American. After establishing the business partnership and trade conditions, lots of agents later continue their work in the service process, adjusting the offer and demand, in a battle to smoothen the communication process and improve efficiency. A starting battle for most Polish exporters, I would add.

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Polish offer and the USA market

The USA market is the dream for every European company, as they see the $$$ flowing from a country with a population over 308 mil people, one language and one set of regulations applied. And regulations are very important in cosmetics, but about this in a future post.

 The American Dream of Polish cosmetic companies usually starts and finishes with Polonia, meaning the Polish American population, concentrated around New York and Chicago areas, having their own stores, where they can purchase Polish merchandise (from kiełbasa wyborcza to the latest cosmetics novelties and Fakt magazine). To really cross over the ocean and to reach the American consumers mean, not only to think outside of the box, but also to invest outside of the box. And until now, only one polish company made it, Inglot.

At the border of the box are the companies that sell to ROSS, one of the biggest off-prices department stores from the USA, for whom they adapt their most successful products, to suit the FDA regulation, with zero investment in marketing, product continuation or brand acknowledgment. The transactions are one-offs, in medium quantities, that work or not, depending on consumers mood and buyer intuition.

So, is there any change for Polish companies to sell in the USA? Yes, there is! And is not even so hard. It just needs attention, investment and a little bit of creativity. The FDA regulations are strict in terms of formulas and packages, but as the cosmetic trends in Europe and USA are very similar, most formulations are suitable in both places. The package is a challenge, but not a difficult one, since all the info should be comprised in one language and are clear guidance regarding statements and promises that a product can offer in the USA.

Then, we stay with the question of marketing, which involves communication, promotion plan, and sales strategy, for a different consumer, with other needs and expectations. If the formulas and package can be worked out easily by Polish producers, the marketing and sales strategy is something that necessitates investment, creativity and knowledge gathering. It means that the polish cosmetic producers need to think out of the box, and only 1 company figured out how to do that, until now.

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Cosmetics novelties trend in Poland

The dynamics of Polish cosmetic market is unique and particular, the trend focusing on averagely-low priced novelties. There are three main factors contributing to this tendency: the high number of cosmetics companies (well established and start-ups), the relative relaxed EU regulations in terms of cosmetic production and the Polish consumer demand for high quality – low price products. There are positive and negative effects of this situation, both for consumers and companies.

The most prominent effect is the visible decrease in cosmetics lifespan, drastically declining in recent years. If some time back the average lifespan of a cosmetic line in Poland was between 4 to 5 years, nowadays a successful line can count on a maximum of 3 years or an average 2. The market is also overload with one-off products, a big number of local producers focusing their effort towards limited editions (minimal marketing investment), seasonal series or dedicated lines for discounters (fast earnings). The offer is permanently renewed for consumers, in accordance with new-fashion preferences, which on hand is good, the choice being always trendy, but on the other, it lacks the stability. The lack of stability and short availability of certain products can be very frustrating for consumers, especially if they want to engage with certain products on a long-term purchase.

In terms of companies portfolio and development, the novelties trend offers a wide range of perspective especially for newcomers, with a narrow portfolio, usually cosmetics start-ups with innovative ideas, that will find a place on the shelves for their products. However, for the big established producers, with a wide portfolio, keeping up is not that easy. It demands big investments in developing new formulas and products, in a very short time, for a very wide range of products, in order to answer immediately to the ongoing trends. Considering the fast changing trends and the short lifespan of products, the return of investment might not always be there.

The novelties trend from the Polish market its a result of its immaturity, a rich market that did not yet come of age. On one hand are the consumers, interested in novelties and unable to engage in long terms purchase relations with products, because they disappear from the shelves (personally, I experience in more occasions such situation, when I wanted to repurchase), on the other, are the companies, too young and afraid to invest in building their own visionary products, launch their own trends and invest in their continuation. It’s always more easy to go with the trend, than invest in building a flag-product. The strand argument of products managers is that the consumers demand novelties and are not open for developing long-term commitments towards cosmetic products. However, they do not take in consideration that Polish consumers have no choice in developing long terms commitments, and in very rare cases, local producers are able to offer a product on a long-term basis.

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The book tells the stories of most famous Polish cosmetic brands and their journey to success. Usually, developed as a family business, Polish cosmetic producers grew with the market, adapting, changing and maturing together with their consumers.

The local strong brands are the core of cosmetics business and consumption in Poland, which makes it hard for international products and brands to penetrate the market. The Polish producers provide high quality items and innovative formulas, beginning able to introduce very quickly on the market new products, something for Polish consumers to enjoy.