Will the future of ethical labelling be defined by fragmentation or integration?

By Natasha Spencer

- Last updated on GMT

Will the future of ethical labelling be defined by fragmentation or integration?

Related tags: Sustainable cosmetics summit, Organic food, Organic farming, Cosmetics, Asia

As the number of ethical labels in Asia’s cosmetics industry is developing rapidly, will new ethical, health and environmental labels join the dominant natural and organic segment? And how can Asia-Pacific (APAC) brands maximise their opportunity to join the labelling sector?

Ethical labelling is one key trend within the APAC region that is witnessing both newly-emerging ethical, health and environmental labels and evolving natural and organic developments to satisfy consumer demands.

Cosmetic Design Asia spoke to Amarjit Sahota, Founder and President of Organic Monitor, a specialist research, consulting & training company, about the key areas of interest and growth within the APAC region and what the future is set to hold for ethical labelling.

Sahota is presenting a workshop at the Sustainable Cosmetics Summit Hong Kong on 15 November to share the latest updates on green/ethical labelling schemes, and some projections on future movement, including whether fragmentation will continue or if there is expected to be a level of label integration on the horizon, to visitors and the industry.

We got to talk to him before his workshop, which is designed for cosmetic brands, raw material firms, and others looking at standards and labelling schemes, on ‘The Future Outlook for Ethical Labels’ for his prediction on emerging and developing trends.

Consumer Demand

With so much interest and development in the multi-faceted natural and organic sector, it seems brands must focus on pinpointing how to directly appeal to their target audiences to drive sales.

In general, consumers want authenticity​,” says Sahota. “When they buy natural and organic products, they want legitimate natural and organic products. This authenticity now exists for organic foods, as many Asian countries have introduced national regulations, however, we have yet to see this in the Asian cosmetic industry.”

Halal labelling

Although 2016 has seen considerable developments in Asia’s Halal segment, with expectations suggesting it will reach a valuation of $2.47 bn in Asia alone, “we would not say Halal is predicted to lead this trend​”, said Sahota.

We see natural and organic labels leading at present, however, the Halal label could overtake them in Asia because of the large Muslim population. Asia has over 1 billion consumers who belong to the Muslim faith; such consumers actively look for consumer products with the Halal label​,” he added.

National Standards

As South Korea announced that it is looking to develop a national standard for natural and organic cosmetics, it appears that the industry is looking to learn about the benefits of adopting this approach from another leading sector.

This trend is a crossover from the food industry. Many Asian countries, such as Japan, China, India, South Korea, Taiwan, have national regulations for organic agriculture and organic foods. A growing number of these countries are now looking at developing regulations for organic cosmetics and personal care products. South Korea has made an announcement to this effect, and we expect more countries to follow suit​.” said Sahota.

As the need for transparency to build consumer confidence and certainty appears to be high on the agenda throughout APAC, Sahota added that national standards and regulations

will have a positive impact for it will encourage brands to adopt organic cosmetic and personal care standards​”.

A major issue in the cosmetics industry (especially in Asia) is the high level of greenwashing. In Asia, we have seen instances of brands falsely placing organic logos on products packs or market their products as organic, although the product formulations are conventional​,” he emphasises. 

2017 and beyond

The overall projections for the natural and organic cosmetics industry continue to be positive.

We expect to see adoption rates of natural and organic cosmetics continue to rise​,” Sahota said encouragingly.

Already in the last five years, we have seen a large rise in companies taking the certification route. As well as small start-ups, we have seen large Asian companies such as Amore Pacific and Himalaya Healthcare develop certified cosmetic lines. We also expect to see more natural and organic, and other ethical labels, being introduced in Asia​.” 

Sahota will provide an update on the market for certified green cosmetics, covering market trends, competitive developments and consumer behaviour.

He will also give his future projections on consumer satisfaction levels relating to existing labels, fragmentation confusion and the future of labelling schemes. 

These developments will be discussed in detail at the Sustainable Cosmetics Summit Asia-Pacific​, hosted in Hong Kong on 14-15 November 2016. 

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