Kaubandus, Estonia’s largest perfumery, body care and decorative cosmetics distributor, has launched sales of Lithuanian natural cosmetics brand Manilla. Dermofactorius, the brand manager, has signed a cooperation agreement with Estonian partners and is expanding in the United States and Great Britain. However, the decision to enter Estonia was prompted by the interest felt in the neighbouring country’s market itself, the need to present itself and to offer customers the opportunity to buy Lithuanian natural cosmetics locally.
There was a natural need for a presence in the neighbouring country
“We have been cooperating with major retailers in Lithuania for two years now, as well as with pharmacy chains in all three Baltic countries. Successful partnerships with them had naturally generated interest in the neighbouring countries, where our brand became recognisable even before we started trading. Although our current focus is on expansion in the USA and Great Britain, we couldn’t miss the opportunity to expand into the nearby markets, especially when we found the right partner,” says Eglė Vaitiekūnaitė-Šiuškienė, CEO of UAB Dermofaktorius, the owner of Manilla.
After six months of negotiating the terms of cooperation and signing a contract with Renalko Kaubandus, the first consignment of Manilla products arrived in Estonia in spring. “We offered our partner our most popular products in the facial category and our main body care line, and now they are already sold in Estonia. This range should be complemented by seasonal products such as protective face and body creams in summer and cold protection products in winter. For our neighbours, these cosmetics are particularly relevant, as in Estonia, as in other countries, especially in Europe, North America and the Middle East, the demand for natural cosmetics is growing faster than for other cosmetic subcategories,” says E. Vaitiekūnaitė-Šiuškienė.
Launch in Latvia
For Estonians, she says, product quality and reliability are particularly important, as they can get to know a partner up close and personal. Following the start of the cooperation with the distributor, representatives of the manufacturer Dermofaktorius travelled to Estonia and gave several days of training to the outlets, giving them a more detailed introduction to the company and its strengths, which are embodied in the core value of efficient, innovation-based sustainability, i.e. a commitment to producing from plant-based, natural, human- and nature-friendly ingredients. During the meeting, the partners were also introduced to the process of ingredient selection and the innovative solutions applied by the manufacturer to achieve the highest possible functional performance of the products for the skin.
Manilla products are currently sold in a total of 13 physical Ideaal Kosmeetika stores in Estonia, and the brand’s natural cosmetics will soon also be available in other partners’ supermarkets, bringing the total number of outlets to 31 physical stores. Estonians will also be able to buy products from Lithuanian manufacturers in almost ten online stores.
Soon, Lithuanian natural cosmetics will also be available in the online pharmacy chain stores of our closest neighbour, Latvia. A contract with distributors in this country has already been drawn up and is ready to be signed.
Over the next five years, the growth will quadruple
Although sales volumes in neighbouring Estonia and Latvia are expected to be modest this year, they will contribute to Dermofactor’s sales growth, which is expected to quadruple over the next five years.
The main contributor to the projected growth will be the company’s expansion into the major Western markets of the USA and the UK. The e-shop for the latter was launched at the end of May. The D2C (direct-to-consumer) launch in the US is also fully prepared. The company has increased its production capacity in preparation for expansion in these markets. The company’s production capacity has increased by at least 15 times in the new production and administrative premises, which are five times larger, and which operate on one shift.
In 2021, Dermofactor’s sales amounted to EUR 4 million and were more than a quarter or 26% higher than in 2020. Around 23% of last year’s total sales were achieved in physical stores, including the Manilla clinic and spa opened last year in Vilnius and Kaunas, and the remainder through D2C online sales.