Cosmetics as a product group of the Russian pharmaceutical market: analysis of competition and level of dominance

Objective: To analyze competition and the level of dominance in the cosmetics sector within pharmacy sales, identifying trends in three key segments: selective, mass-market, and active (therapeutic) cosmetics.

Material and methods. The study was based on annual reports on the Russian pharmaceutical market published by DSM Group. The analysis employed the Linda index and the Herfindahl–Hirschman Index (HHI), as well as the strength/variety (SV) matrix, which includes concentration ratios and the modified Hall–Tideman index. The degree of market concentration was assessed, the presence of dominant groups was identified, and the market structure and dynamics of major players’ rankings were analyzed.

Results. The Russian cosmetics market within pharmacy sales demonstrates both similarities and significant differences across segments. In the selective cosmetics segment, where foreign players dominate (with the exception of the domestic brand Librederm^®), a transformation has occurred – from high brand differentiation to a state close to a natural oligopoly. This trend has been accompanied by the strengthening of positions of Russian brands since 2014. In contrast, the mass-market cosmetics segment, characterized by high dynamism and competition, shows low market concentration and more diffuse leadership. The ambiguous dynamics of international players after 2014 have been accompanied by the strengthening of domestic brands such as Moe Solnyshko^®, which indicates the effect of geopolitics not only on the selective cosmetics segment, but also on mass-market cosmetics. The active (therapeutic) cosmetics, where Russian manufacturers are market leaders, show relative stability of individual brands, such as Alerana^®, against a backdrop of high market variability. The absence of a dominant group confirms the high level of competition.

Conclusion. There are differences in the development of cosmetic segments within pharmacy sales; the selective cosmetics segment is the most concentrated, in contrast to the mass-market and active (therapeutic) cosmetics segments, which are characterized by a high level of competition. The significance of domestic brands has increased following the introduction of sanctions.

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