The business of beauty: How the Russian cosmetics market works
Russia has one of the largest and fastest growing cosmetics markets on the European continent, expected to reach $3.47 billion by 2028 from $3.12 billion in 2024.
Over the last two years, the industry has focused on domestic manufacturing and reducing purchases from European sellers. Many retailers have reoriented their business to Asian markets, creating delivery chains in line with new logistics channels.
The growth in the market is driven in part by Russians who want to look more groomed without spending too much. Market players are also contributing, having already adapted to the economic conditions that resulted from many overseas brands leaving the market and parallel imports being legalised by the Russian Ministry of Industry and Commerce.
How does the Russian cosmetics market operate today, and will Asian companies, Indian retailers included, succeed in occupying the niches once held by European brands?
Revenue of the cosmetics market in Russia from 2019 to 2028
(in billion U.S. dollars)
Source: Statista
How the Russian cosmetics market works today
Before 2022, overseas cosmetics manufacturers held roughly a 70% share of the Russian market overall, and even more than that in the luxury and mid-market segments. Between 50% and 90% of the raw materials Russian manufacturers were using to make their products were imported. The fragrance industry was particularly reliant on imports.
However, by 2023, Russian trade networks had already managed to fill the niches vacated by their Western counterparts, partly due to the proliferation of domestic brands.
“The decorative cosmetics segment has seen particularly successful substitution in terms of the number of brands and SKUs, with plenty of choice available on the market,” reports the Magnit retail chain’s press service. “New haircare, skincare, and decorative cosmetics products offered by local manufacturers through the Magnit Cosmetic chain are in high demand. Our growing product range features new brands oriented to a younger audience and trending textures and shapes, as well as established brands which are developing base collections, improving their formulas, and offering customers better products for traditional or bolder makeup.”
The Magnit press service also highlighted that 75% of new brands in the hair and facial care categories that appeared on their shelves in 2023 were Russian. Meanwhile, bodycare products with active ingredients that are proven effective (peptides, alpha hydroxy acids (AHA), retinol, etc.) are increasingly popular, including in the mass-market segment, and Russian manufacturers are working to meet this demand.
Although Russia currently manufactures basic components for haircare products, such as glycerine, propylene glycol, and gelling agents, and some domestic manufacturers also produce extracts, fragrances, and surfactants, all of this is just a small part of the raw materials required to manufacture shampoos. Consequently, India and China play the role of alternative raw material suppliers.
According to Rive Gauche’s press service, things are less straightforward in the decorative cosmetics sector than in the fragrance and bodycare segments. Russian brands like Eva Mosaic, Vivienne Sabo, and Influence Beauty now have a strong foothold in the mass-market segment, in which a number of new brands have emerged. Generally, the segment is growing faster than the luxury sector.
Petr Bobrovsky, CEO of the Association of Fragrance, Cosmetics, Household Chemicals, and Hygiene Products Manufacturers, says that consumers are used to buying imported premium and luxury cosmetics and are struggling to find an adequate alternative among the products offered by new brands.
“The luxury product niche still offers great opportunities, with few strong players and customers who are often wary of new brands,” say Rive Gauche representatives. This segment is still dominated by European—mostly French—brands.
This year, the chain has started offering Colorbar, a popular Indian brand. The brand’s product line features dozens of diverse products: mascaras, eyeshadows, lipsticks, foundations, and lip glosses, as well as accessories for storing and applying cosmetics—brushes, pencils, tweezers, and so on. The company’s products are manufactured in Europe, South Korea, and the United States. Rive Gauche’s president says the company rates Colorbar as a “very affordable luxury product.”
Earth Rhythm, another Indian brand, entered the Russian market back at the end of 2022. The company manufactures shampoo bars, cream soaps, and hair balms and prioritises natural plant-based ingredients sourced from India.
The experts single out Purearth, a premium Ayurvedic brand from India, as another recent arrival to the Russian market in 2024. This category is also represented by brands such as Himalaya Herbals, Aasha, and Dabur.
Russian cosmetics market trends
One of the last year’s biggest trends was growing consumer interest in eco-friendly products. Analysts highlight increasing demand for vegan products free from animal testing. The “green cosmetics” movement is gaining momentum, and sustainable products manufactured from natural ingredients are increasingly popular.
The Russian market is also seeing increased demand from the millennial generation—consumers aged between 25 and 40 who tend to be particularly brand-savvy and loyal customers. They are also prepared to spend more on products they like, and are particularly enthusiastic consumers of makeup products.
Leading cosmetics retailers in Russia
At the end of 2023, InfoLine named Magnit Cosmetic (belonging to the Magnit retail chain), L’Etoile, and Golden Apple among the three largest retailers on the Russian cosmetics market, primarily by sales volume. Of these, Magnit Cosmetic had the lead in terms of number of stores across Russia, with 7,740 sales outlets in the drugstore category, while L’Etoile had 1,000 stores, Rive Gauche—255, and Golden Apple—33 (as of the end of 2023).
Major cosmetics market players also include the following companies:
Almost all retailers are developing their online trading capacity. A considerable share of cosmetic products sales already takes place through Wildberries and Ozon. According to InfoLine’s data for 2023, referred to by a number of market researchers, these two online retailers ranked 4th and 5th by cosmetic products sales volume, earning 166.8 and 80.4 billion roubles, respectively.
Russia’s top 6 largest retail chains by cosmetic products sales volume
Source: InfoLine
Projections and perspectives for Russia’s cosmetics market
Analysts forecast that Russia’s cosmetics and personal care products market is set to grow from $9.25 billion in 2023 to $10.70 billion by 2028, with a compound annual growth rate of 2.96% during the projected period (2023–2028).
Trends in demand across Russia’s cosmetic products market are generally equivalent to those on the European market, in that consumers are ever more eager to buy beauty and self-care products.
Premium products are also in high demand, as a growing middle class of consumers seeks out high-quality, well-known brands.
Skincare products are the most sought-after category, thanks to an increased focus on health and a comprehensive skincare routine.
Most popular beauty categories in Russia
Source: Institute of Public Opinion
Meanwhile, younger customers following fashion trends are expected to drive steep growth in demand for makeup and haircare products.
In 2024, the key trends in the Russian cosmetics industry remain the same: domestic cosmetics manufacturing is expanding, and local manufacturers are striving to bring the quality of Russian brands up to luxury standard. Expanding the range of Asia-Pacific and South Asian brands on offer is a separate item on retailers’ agenda.
Indian cosmetics are already well received on the Russian market. According to India’s Ministry of Commerce, exports of Indian cosmetics to Russia reached $17.67 million in the 2022–2023 financial year, corresponding to a compound annual growth rate of 17% since 2018–2019. Thanks to the growth of e-commerce in Russia, Indian brands have easy access to Russia’s vast consumer base and can be more proactive in offering their products and expanding their footprint on the Russian market.