The Thai Ministry of Industry is supporting the Thai cosmetics industry to increase its growth by up to 10%.
It aims to achieve this goal through innovation - in both product development and online marketing - and by promoting high-quality processes to drive appeal in the wider ASEAN Economic Community (AEC), within three to five years.
As the Ministry of Industry aims to maximise high-quality standards within the Thai cosmetics industry Thailand will predominantly focus on small and medium-sized enterprises, and emphasise the importance of R&D to create new products and develop existing solutions.
Currently, the cosmetics industry in Thailand is worth approximately 210 bn baht ($6.1 bn), with 120 bn baht ($3.5 bn) belonging to the local market and exports reaching 90 bn baht ($2.6 bn).
The Thai Ministry of Industry states that it has three fundamental steps to consider when preparing Thai-based products and solutions for the industrial sector. With these steps, the Ministry hopes to encourage SMEs in Thailand to gain appeal in the AEC.
These steps include:
- Study geographical locations to establish their suitability.
- Prepare brands, products and industrial operations for the wider AEC market.
- Ensure product standards are compliant with other ASEAN standards.
In Thailand, the Ministry of Industry, otherwise known as the Thailand Industrial Standards Institute) is responsible for governing the standards of 5 core sectors, excluding cosmetics. The Food and Drug Administration is responsible for this sector, along with food, medical instruments, and traditional medicine.
The Food and Drug Administration currently governs the cosmetics industry through the Cosmetic Act B.E. 2535 (1992), which largely manages various activities within the sector through two major areas: pre-marketing and post-marketing activities.
It reports that recently, the regulatory focus in Thailand has moved from pre to post-marketing activities to reflect the importance of adhering to technical requirements and good manufacturing guidelines to ensure high-quality production.
In April 2016, Euromonitor’s report showed that Thai consumers have become more cautious and have adopted more sophisticated attitudes when it comes to cosmetics purchasing.
Increased time spent on researching purchases and opting for those with positive reviews, along with waiting for deals or promotions, were increasingly common consumer behaviours.
This has forced brands to innovate and diversify their product ranges to include more benefits, unique claims and limited collections throughout 2015 and 2016.
With demanding consumers and the success of international brands with large budgets to spend on R&D, Thailand is now focusing on new product development.
The Thailand 4.0 economic model aims to turn its traditional SMEs into smart enterprises and traditional services into high-value services.
On 8 September 2016 in Bangkok, Thailand, Deputy Commerce Minister Suvit Maesincee spoke about Thailand 4.0 at a press briefing. It was organised by the Foreign Office of the Government Public Relations Department (PRD), to promote a better understanding of the policy.
The Thai Cosmetic Cluster, formed in 2015, is a group of businesses and institutions that work towards the development and integration of the cosmetics industry in Thailand and are focusing their efforts on driving the 4.0 business model forwards.
The group has organised the Thailand Cosmetic Contest 2016, which held a press conference on 20 September, to help stimulate the cosmetics industry in Thailand and build knowledge within the sector. By increasing awareness, it hopes to overcome its four key challenges: innovation, standards, effective image and branding and associated packaging problems.