Polish cosmetics are becoming a worldwide hit. Over the past 15 years, Poland's cosmetics market has grown by 78 percent nominally and by 32 percent in real terms, which translates into 2 percent growth annually, according to a report by Deloitte. In 2016 the value of the industry amounted to PLN 16 billion (EUR 3.78bn), up from PLN 9 billion (EUR 2.13bn) in 2002.
The growth is particularly impressive considering that important players in the European cosmetic market, such as France and Italy recorded a decrease over the same period, of 0.19 percent and 1.09 percent respectively.
According to the report, there are about 400 cosmetic companies in Poland, ranging from large enterprises to medium, small and micro firms. In total, the sector employs 43,000 people and generates PLN 7 billion in added value a year. It is the sixth largest cosmetics market in Europe and is growing the most rapidly
As forecasts show, the value of the Polish cosmetics sector will reach PLN 20 bn (EUR 4.72 bn) in 2021. According to experts, the demand for more expensive products and those dedicated to elder consumers will shape the growth of the industry.
“In the next few years, the Polish economy should continue to grow, and with it the cosmetics industry. At the same time, the society will be more prosperous which in turn means an increase in the demand for cosmetics,” said Julia Patorska, economist and senior manager at Sustainability Consulting Deloitte. “The structure of the demand will change, with the sales of more expensive products increasing. As a result of the aging demographics, demand for elderly care products will grow as well,” she added.
Although the largest demand for Polish cosmetics is generated by the European Union (nine-fold increase from PLN 231m to PLN 2.04bn between 2004 and 2016) the products from this segment are exported to more than 160 countries, including Mexico, Indonesia or Australia. The main export destinations of cosmetics from Poland are Germany, the United Kingdom and Russia. In 2016, exports to these countries amounted to PLN 1.77 billion, PLN 1.59 billion and PLN 1.38 billion, respectively.
Local companies are able to offer competitive products not only on relatively easy markets, but also where competition is fierce - says Joanna Popławska, President of the Polish Cosmetic Industry Association.
According to Deloitte, the Polish cosmetic industry is currently facing an opportunity for further global expansion with markets of the Middle East and Asian looking particularly promising. Vietnam and South Korea. Kuwait, Morocco and the United Arab Emirates are also on the spotlight of the Polish cosmetic sector.
In the long run, quality and innovation are important drivers for competitiveness. For this reason, it is necessary to stimulate investment in research and development concludes the "Report on the condition of the cosmetic industry in Poland 2017".