Natural and organic market: Asian Investment is high despite hurdles

Recognising the rapid expansion and growth in the Asian market, specialist research, consulting and training company, Ecovia Intelligence, believes US and European companies are seeing the strategic rewards of investing in Asia-Pacific companies.

Opportunites and potential​

Natural and organic cosmetic sales in Asia rose by 21% in 2017, compared to single-digit increases in both Europe and North America, Ecovia Intelligence reported. The consulting firm also believes that Asia has “high growth potential, considering the market share of total cosmetics remains below 1% in almost all country markets”​, it commented.

Rising awareness of synthetic chemicals in cosmetics products and toiletries is leading consumer demand for natural and organic items, and as such, is generating vast investment in the Asian market.

Ecovia Intelligence anticipates that both China and India will lead the way in terms of market growth. China represents over 50% of Australian natural cosmetics name Jurlique’s sales. China is also proving popular for French-based beauty retailer, L’Occitane, which holds that China is the second largest market for its natural-based cosmetic products.

Current challenges​

1. Distribution​

Natural and organic cosmetics companies in Asia must overcome the prevalent challenges of distribution in Asia if they are to grow. Brands are utilising a direct retail model by launching concept stores and distribution networks to improve their routes to market.

2.  Standards​

Whole natural and organic cosmetics standards, COSMOS and NaTrue, are long-standing and largely well-known in Europe, yet brands are slow to adopt these into their strategic business must-dos in both Asia and North America.

New labelling schemes are on the up, driven by Europe. National Eczema Association, Allergy Certified standard and the Made Safe and Environmental Working Group (EWG) Verified Programme have all gained a notable presence and generated strong support from health-conscious consumers.

Although Asia, to date, has been slow to add the certification element to their brand story, Ecovia Intelligence anticipates that “it is highly likely that some of these new labelling schemes will gain popularity in Asia”,​ it revealed.

“With growing proliferation in standards and labelling schemes, a major decision for brands is not which ones, but how many to adopt,”​ the research and consulting firm stated.

In its upcoming industry events, Ecovia Intelligence will delve into standards and ethical labels, Asian growth potential, and the state of the global natural and organic cosmetics market.

The next event in Asia-Pacific, Sustainable Cosmetics Summit, will take place in Hong Kong between 12-13 November.