Five companies dominate Uzbekistan’s import market for personal care products

Shampoo production in Uzbekistan involves 32 companies, with a total output of 6,300 tons in 2023, valued at 91 billion UZS. According to the HHI, the committee noted a developed competitive environment for this product category. The three largest local producers hold a 49% market share, and the market’s saturation with local products is 36.3%.

Fifty-two exporting companies shipped 3,300 tons of shampoo, valued at $2.8 million, while 245 importing companies brought in 14.4 tons (likely a typo in the original, intended as 14,400 tons), worth $44.4 million. The top five importers account for 84% of the import share. Imports primarily come from Turkey (43%), Russia (20%), Poland (11%), the UAE, and South Korea (5% each), with the remaining 16% from 28 other countries.

Toothpaste

Four local companies in Uzbekistan produce toothpaste. In 2023, their production volume reached 180 tons, valued at 7.3 billion UZS. The committee’s HHI analysis indicates an underdeveloped competitive environment for this category. The two largest local producers hold a 71% market share, with local product saturation at just 2.9%.

Ten exporting companies shipped 40 tons of toothpaste, valued at $111,500, while 116 importing companies brought in 6,200 tons, worth $21.6 million. The top five importers account for 90% of the import share. Imports mainly originate from China (67%), Turkey (10%), the UAE (10%), and Russia (6%), with the remaining 7% from 23 other countries.

Face powder

Five companies in Uzbekistan produce face powder for facial makeup. In 2023, their output was 74 tons, valued at 3.9 billion UZS. The committee’s HHI analysis shows an underdeveloped competitive environment for this category. The two largest local producers control 97% of the market, with local product saturation at 13.2%.

Two exporting companies shipped 0.6 tons of face powder, valued at $700, while 54 importing companies brought in 487 tons, worth $1.7 million. The top five importers account for 86% of the import share. Imports primarily come from China (48%), Turkey (17%), the UAE (16%), and Indonesia (9%), with the remaining 10% from 16 other countries.

High concentration does not always mean limited competition in the market

Economist Behzod Khoshimov wrote that someone unfamiliar with the Competition Committee’s infographic or index might form a mistaken impression about the industry in question.

“For example, they might erroneously conclude that high concentration means competition in the market is restricted. The problem is that the level of concentration — from the perspective of consumers and the market — is an insignificant figure. Another issue is that grouping products into a single market is challenging,” wrote the New York University professor.

He explained that high concentration could result from strong competition and effective vertical integration, leading to highly efficient companies.

“Let’s say Google is the absolute leader in the online search market, or in the email market, just two companies — Microsoft and Google — control 80–90% of the market share. Is that a problem? Of course not. They have high concentration because they are good companies and appeal to consumers,” Khoshimov stated.

In his post, he also provided a more relatable example. In the U.S., three companies — Kimberly-Clark Corporation, Procter & Gamble, and Georgia-Pacific — dominate over 90% of the tissue and sanitary paper market. In the carbonated beverage market, The Coca-Cola Company, PepsiCo, and Dr Pepper Snapple Group control 95% of the market. In the household appliance market, four companies — Whirlpool Corporation, AB Electrolux, General Electric Company, and LG Electronics — hold nearly 94% of the market.

“When we talk about competition and markets, highly concentrated markets like online search, email, tissues, carbonated drinks, and household appliances are rarely seen as problematic. Why? Because high concentration in these markets is a result of strong competition. Despite their extremely high concentration, the existing players remain under constant threat of competition, which drives them to act in ways that benefit consumers and the market. This is a triumph of markets and competition,” Khoshimov wrote.

However, he pointed out that the situation differs in another market — healthcare and hospitals.

“There are thousands of hospitals, and at first glance, one might think it’s a completely unconcentrated market — if we calculate it the way our Competition Committee does. No single hospital or group of hospitals holds a significant percentage, plus 15% of hospitals are state-owned, and 50% are nonprofit organizations. But why, then, is there no competition in the healthcare market? And why do prices keep rising? This brings us back to the earlier point — the issue of grouping markets and industries,” he said.

He noted that in the U.S., despite the large number of hospitals, they cannot all be lumped into a single “industry” or “market” because they are spread out geographically. Therefore, concentration should be measured at a local level rather than nationwide.

“If you fall ill, you go to the nearest hospital — you can’t search across the entire country. But at the local level, concentration is high. In one city, most hospitals might belong to a single group. So, is high concentration a bad thing? In this case — yes, but here, too, concentration is a consequence, not a cause. The reason is simple: there are numerous restrictions on opening new hospitals. Due to regulatory barriers, local hospitals turn into local monopolies,” the New York University professor remarked.

He concluded, “The bottom line is that the infographic presented by the Competition Committee is meaningless. They should tell us, ‘The reason for this high concentration is X.’ In other words, high concentration could be a good thing — if new competitors can enter the market without issues. The reverse is also true: a market might have low concentration, but if competition is restricted and 20 companies each hold a 5% share, that could still be a major problem,” Khoshimov summarized.