Development of Perfume and Cosmetics Retail Chains in Ukraine

Abstract

The article reveals the main trends in the development of retail chains in the perfume and cosmetics market of Ukraine, highlights the activities of the largest drogerie chains (market leaders in perfumes and cosmetics identified as Eva, Watsons, Prostor and Cosmo, last two merged in 2020 in one chain). The main trends that influence the formation of marketing sales marketing strategies and the main aspects of the development of retail chains of the perfume and cosmetics market were analyzed; the directions of development and use of marketing sales channels were identified. It has been found that, despite engrafted omnichannel elements, drogerie chains do not use all marketing channels, which reduces the effectiveness of marketing efforts. A comparison of development rate of the world and domestic markets of perfume and cosmetics is made. According to statistics, the growth of the Ukrainian market is steady, not ahead of world indicators. The Ukrainian cosmetics market during 2009–2020 shows an upward trend, during these years the growth rate ranges from 2% (the lowest value is observed in 2011) to 3.8% (in 2019) ergo the industry is developing, the demand for cosmetic products is growing. Starting from 2019 a significant part of the market gained by Makeup.ua, an online cosmetics store without any traditional store. None of the perfume and cosmetics chains, national or international with large chain of stores, exceeded 0.5% of the Ukrainian market in 2019 and 2020. So, the leaders are set: 2 national drogerie chains, one international and one online store. It is proposed to introduce a systematic approach in retail chain marketing channel strategy, which in contrast to the existing ones considers the specific features of the retail chain. This approach allows determining the need for the formation of new marketing channels or optimization of existing ones to increase the effectiveness of marketing sales strategy of the retail chain. Analysis of statistical data on retail trade turnover of Ukraine by regions and categories of goods allowed determining regions and cities of concentration of retail enterprises. It has been established that consumers of perfumes and cosmetics in Ukraine prefer to buy in physical stores, but channels such as online store and applications double the turnover annually due to the development of technology, mobile communication and reducing consumer distrust of virtual channels sales.