Rise of a drugstore icon: How dm's own brand Balea is shaking up the market

Once decried as a cheap product, Balea is growing faster than many manufacturer brands. How did the drugstore chain dm manage to do this? The success factors – and the dangers.

Karlsruhe, Düsseldorf. 6.7 times per year, i.e. more than every other month: This is how often a “Balea” product ends up in a German buyer’s shopping cart. This is shown by figures from market researcher Yougov. The dm own brand has made an impressive journey in recent years. From “white goods” to your own brand promise and a speed of innovation that makes traditional brand manufacturers look old.

Balea – that no longer just means simple shower gels for 55 cents or a face cream for 1.15 euros. Balea, that now also means: Korean skincare in the drugstore, medical-inspired facial care, a “professional” hair range. In a recent study, the consultancy Porsche Consulting describes Balea as a “category-defining outlier” – an own brand that redefines the category.

How much of Balea is good brand work - and how much influence does dm's dealer power have? And what is the competition doing? Handelsblatt looked at Balea's success factors.

How successful is Balea really?

Balea's success story is not one based solely on in-store perception. The numbers Yougov collects are clear. Between June 2022 and June 2026, Balea increased sales by 47 percent. At 44.2 percent, almost every second German is considering buying Balea products.

There is also another interesting number. Balea is continually gaining new buyers. Buyer reach has increased from 34 to 40 percent over the past four years. “This is huge in the personal care environment because many start-up brands are entering the market and the competitive environment is strong,” says Yougov expert Anna-Katharina Kraus.

For comparison: The average buyer penetration of the top five brands and private labels in the categories in which Balea is active is just under 23 percent. 30 percent of competitors will have lost at least 0.5 percentage points in buyer reach in 2025 compared to 2022.

Where does Balea come from?

In the summer of 1995, dm introduced the Balea brand. The first 30 products mainly included shower gels, baths and deodorants. Even today, personal care is Balea's strongest segment. According to Yougov, 93 percent of Balea buyers buy body care and 54 percent buy hair care.

Kerstin Erbe, who is responsible for the dm brands in the dm management, talks about the beginnings. “At a time when private labels were often only seen as white goods in price entry,” dm founder Götz Werner made a very conscious decision to build his own brands, she says.

In the early years, the products and design clearly suggested an own brand. "From the mid-nineties to the noughties, Balea was the classic own brand - the substitute, the cheap product. That's what it looked like," says brand expert Tabea Höllger at the consultancy Brand Trust.

Then the category was expanded and sub-brands such as Balea Men were introduced. In the 2010s, the brand began experimenting with active ingredients and developing a high pace of innovation. “You could feel it: the brand has a strategy and a plan,” says Höllger.

The success factors

Success factor 1: The price-performance ratio

Balea is currently doing very well in achieving customer loyalty. According to Yougov, the repeat purchase rate for the brand is 73.4 percent - almost three quarters of buyers who have bought a Balea product once do so again. “That is a high value,” says Anna-Katharina Kraus from Yougov. "Balea is well on its way to becoming a love brand. Shoppers are simply satisfied with the overall package they get from Balea."

Consumers no longer feel ashamed about buying a private label product. “Balea has managed to completely reverse the penalty,” says brand expert Höllger. Buyers' awareness has changed from the belief that a cheaper product is of lower quality to the knowledge that they can get a good product at a lower price.

Customer satisfaction can be seen in an increased value for money. While the score for Balea was 30.1 in 2015, it rose to 43 in 2026.

Balea's price stability is also crucial for dm. “We kept prices as stable as possible,” says Kerstin Erbe. Some losses were even accepted for this.

Success factor 2: The community

But the price argument alone is not what convinces buyers of Balea, says brand expert Höllger. While classic own brands only serve a rational need by being good and cheap, Balea serves an emotional level “which can be an important value driver”. This included customer proximity, aesthetics and trend awareness. A key factor here are the digital channels.

Balea usually knows exactly what their customers want. As an own brand you have more direct contact with customers. The dm app alone has more than seven million users every month. The app, through which customers can also rate the products, as well as its own social media channels are “immense” advantages for the brand, says Höllger. The direct line to the customer is not so easy to copy.

Arndt Will is brand manager at Balea. He says: "Social media is a gift for us. You can hardly get feedback faster and more directly." The criticism goes down to the smallest detail. A large part of the dynamics surrounding individual product lines arise organically from the Balea community. To date, Balea has not invested in traditional advertising measures.

She doesn't have to, says Yougov expert Kraus: "Balea uses its social media content very cleverly - like a community brand. And when the skin influencers recommend the products, young consumers in particular run into the store and buy Balea."

According to Balea manager Will, this has recently been particularly evident in the skin care range, which is based on Korean skincare. “The popularity on Instagram was already there before we became active ourselves,” he says.

Success factor 3: The speed of innovation

When it comes to innovative power, Balea is now perceived by consumers to be in the same league as large brand companies. According to the Porsche Consulting study, buyers rate the brands Nivea, Garnier and L'Oréal Paris as more innovative. But Balea follows directly behind – ahead of Dove, Neutrogena or Eucerin.

According to the study, the perception of the own brand has changed from an inexpensive alternative to a competitor on an equal level. Balea is the benchmark for what a private label strategy should look like.

The speed of innovation at Balea is higher than at many brand companies. According to Balea manager Simone Heidt, it takes just six months from the idea to the market launch. Periods of six to 36 months are common in the consumer goods industry - depending on whether it is a groundbreaking innovation or just a modified formula. Balea can also be so fast because the time from the product being presented to the retailer to the shelf is significantly shorter than the standard three to six months - after all, dm itself is the retailer.

Balea releases 200 new products every year.

The range is regularly renewed. It includes a total of 650 items - Balea releases 200 new products every year. “These are partly new items, new series, but also limited editions that we exchange regularly,” says Heidt.

According to Yougov expert Kraus, continuous innovation in the market is crucial. New designs or limited editions offer new purchasing impulses. “The shopper must have the feeling that the brand is constantly evolving,” she says. “The private label is simply quick.”

An example of this is the Balea Professional hair line with so-called “Plex” technology, which is intended to repair the hair from the inside out. “We saw the trend in the hairdressing sector and asked ourselves: How do we bring this to the drugstore in such a way that it remains accessible to everyone and does not cost 28 euros?” says Heidt. The entire market wanted to cover the topic, but with Balea they were the first. For Balea products, the prices are relatively high - a hair mask costs 2.75 euros. Nevertheless, the shampoo in the line was the best-selling shampoo at dm right from the start, says Heidt.

Balea's speed of innovation is increasingly becoming a problem for brand manufacturers, attests brand expert Höllger. "They fear losing their position or producing product flops. It's almost like paralysis." Balea, on the other hand, exudes a joy in experimenting. “And if a product doesn’t arrive, they take it off the shelves.”

This is what happens with so-called “Inner Beauty” products, i.e. dietary supplements for supposed beauty from within. “We were excited about the idea and really wanted to test it under Balea,” says managing director Erbe. But they were too early; the market was not yet ready. “It didn’t work back then.”

Success factor 4: The dm effect

Balea's image also benefits from the overall perception of dm. In a survey among consumers by the consultancy EY Parthenon, dm was voted the most popular retail company in Germany at the beginning of the year. “As a group, dm already has a good reputation; the markets try to create a feel-good atmosphere,” says Kraus. “This affects the own brands: Anyone who buys Balea already has trust in dm and a good feeling.” Brand expert Höllger also speaks of a “positive radiation effect in terms of trust”.

At Balea we know about the advantage that dm stands for certain values ​​and is positively associated, says manager Heidt. “That also affects Balea.”

The downside: dealer power on the shelf

Structural power is even more important than image. While brand manufacturers have to fight for shelf space and the presentation of new products, Balea is at the source. The Balea managers emphasize that they also have to fight internally for appropriate space for their products in the market. “The shelves are not made of rubber: When something new comes along, something else often has to go,” says Heidt.

Nevertheless, dm can prioritize its own brands. “The advantage of own brands is that retailers can freely place their own brand on the shelf,” says Kraus from Yougov. "This means that classic shelf space is becoming increasingly limited. Balea, for example, also brings many innovations onto the market that are listed."

For brand manufacturers, this means that it is becoming increasingly difficult to assert themselves against Balea's shelf power and innovation speed.

And that affects more and more categories. Balea has continuously expanded the range, says Kraus. The brand is currently focusing heavily on hair care. The buyer reach there has grown by 35 percent over the past four years. “That’s Balea’s strength: They are broadly positioned and can always open new categories – and also get the shelf space for them,” she says.

Dm managing director Erbe says there are no guidelines in favor of the dm brands. “We compete on the shelf – and that’s important because customers expect a selection.”

Nevertheless, Balea can operate more freely and bring out new products because the barriers to entry are significantly lower. If a product doesn't work, it is simply taken off the shelf. This does not result in a worse negotiating position for the next innovation.

The risk: The competition is approaching

Balea's formula for success is a mixture of customer proximity, dealer power and innovative strength. These attributes also apply to the biggest competition among the beauty own brands: Isana, Rossmann's own brand. The brand has been on the market since 1998.

According to Yougov, the Rossmann brand has also shown very dynamic growth in buyer reach over the past four years. The repeat purchase rate for the brand is also similar to that of Balea. The focus here is also on personal care.

In terms of innovation perception, Isana is still below Balea's values ​​- according to the Porsche study, at plus 40.2 percent compared to plus 49.9 percent for Balea. But it doesn't have to stay that way. “For us, Isana is clearly more than just an entry-level price brand,” emphasizes a Rossmann spokeswoman when asked. Although the price-performance ratio plays an important role, Isana should be positioned as an independent beauty brand with “quality and innovation standards”.

The trends picked up are partly the same as Balea. Isana has also released products that are based on Korean beauty care. In this way, “we are democratizing high-priced trends and transferring them to the drugstore market,” says Rossmann.

The future: Anything but business as usual

Yougov expert Kraus sees it similarly: "Balea manages to act in such a way that it appears like a large manufacturer brand: uniform design, recognition value, different product ranges. You don't actually notice any difference anymore."

But therein lies a risk. Anyone who behaves like a brand also has to assert themselves like a brand - against manufacturer brands, but also against Isana and other own brands that want to copy the successful model. Balea manager Heidt is aware of this: "The biggest threat would be to simply say from a good situation: Then we'll carry on like this. Acting is better than reacting."