Latvia fears for its oldest cosmetics company
The largest and oldest Latvian perfume and biocosmetics producer Dzintars is on the verge of bankruptcy. The company's staff have launched a campaign on Facebook calling on Latvians to buy their products - with success. But can such short-term consumer commitment save the more than a century-old company?
Better to stink than to buy Latvian perfume
Poor relations between Russia and the EU have contributed to Dzintars' decline, Neatkarīgā points out:
“The Dzintars brand name goes back to Soviet times, which is why the market in Russia and the former Soviet republics endured for so long. Now the friendship is over. ... Even if Dzintars isn't affected by the Russian embargo, the fluctuations in the rouble-euro exchange rate have a negative impact on sales and make the whole business unprofitable. Because of the sanctions, consumers in Russia are increasingly insolvent. And some are so caught up in the anti-Western hysteria that they'd rather stink than buy Latvian perfume.”
Completely missed the boat
It's no surprise that Dzintars is on the verge of bankruptcy, Dienas Bizness comments:
“The cosmetics company has remained stuck in the past, unable to cast off the habits of the Soviet era. But the times when there was only one product for consumers to choose are over. Today you buy a brand and its history. ... No wonder young people walk past the stores without looking in. The branches are poorly distributed, the sales ladies are well past their youth, to say the least, and sit in the corner half asleep over their crossword puzzles. ... Now the only hope is that the factory doesn't close down. It's good to hear that the response has been so big and that the company's sales have tripled in recent weeks. Because we're not willing to give up a 100-year-old story that easily, even if the calls for people to buy the products are like holding out a straw to a drowning man.”
Dzintars need not go bankrupt
The cosmetics company can survive if it manages to open up new markets while remaining popular in Latvia, Diena believes:
“Not so long ago Dzintars and its boss were part of the Latvian success story. What happens next with the company depends on whether it can change with the times. The Russian and Ukrainian markets are no longer a guarantee of stability, meaning the company would do better to try to break into the Chinese market. And it is still hugely popular on the domestic market. Meanwhile the campaign on Facebook has shown that the social media exert an enormous pulling force. As our marketing managers realise: the most effective campaigns are those that concentrate on specific products and immediate action.”