Cosmetics "play a strategic role" in Indonesia

By Lucy Whitehouse

- Last updated on GMT

Related tags Economic growth Indonesia International trade

Cosmetics "play a strategic role" in Indonesia
Indonesia’s Minister of Industry, Saleh Husin, has spoken of the key strategic role played by the beauty industry in the market's future.

Speaking at the opening of the national conference of the PPA Kosmetika association in the country, the government figure was keen to stress the size and scope of the market, noting that its 760 registered companies directly employ 750,000 people, and sustain an additional 600,000 roles in related industries too.

"Indonesia has a strong potential given the large domestic market, its exports, the qualified human resources and the vast herbal ingredients that can be used as raw materials. The export value in 2015 reached USD 818 million or around Rp 11 trillion,"​ Husin said.

In 2015, the Indonesian government created a ‘masterplan’ for economic growth and development, and the beauty industry featured among the top 10 priority list. Husin’s comments confirm beauty is still at the fore of its strategy.

Indonesia: opportunities

Thanks to rapid economic growth in recent years, Indonesia is among the fastest growing cosmetics markets worldwide, according to a recent overview from market research firm Euromonitor International.

Jean-Paul Agon, CEO of beauty giant L’Oréal, is one prominent industry figure who has recently spoken​ of the opportunities he believes the Indonesian market presents, noting that the French company enjoys a strong foothold in the growing market.

In Indonesia, we are a bit less than 10%, but we are catching up with more stores offering more products,” ​he noted.

A fully-integrated supply chain

Industry commentators suggest that to move forward, beauty in Indonesia needs to better integrate the stages of its supply chain.

UBM, a major trade exhibition company in Asia, is one such body to have noted that, due to the majority of ingredients entering the supply chain as imports, any growth of the industry will demand better connection.

Currently over 90% of cosmetic raw materials still have to be imported​,” UBM said in a recent statement. “Therefore, the integration of upstream and downstream will be crucial for any significant acceleration of the industry.​”

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