Spotlight 2020: Expert analysis on the year ahead

All eyes on… Three emerging APAC markets to watch for cosmetic growth in 2020

By Amanda Lim contact

- Last updated on GMT

Thailand, the Philippines and Indonesia are poised for concerted cosmetics and personal care sector growth in 2020. ©GettyImages
Thailand, the Philippines and Indonesia are poised for concerted cosmetics and personal care sector growth in 2020. ©GettyImages

Related tags: Business, Finance, Cosmetics, Apac

Thailand, the Philippines and Indonesia are poised for concerted cosmetics and personal care sector growth in 2020, according to exclusive expert analysis from industry insiders.

As part of our look ahead to what 2020 has in store, we shine the spotlight on these three markets.

Thailand

According to the International Trade Administration (ITA) Thailand’s beauty and personal care products market were valued at $6.2bn in 2018 and is expected to reach $8bn in 2022.

The significant potentials in personal care are driving ingredient companies like DSM to place focus on the country.

Fabrice Guillemard, regional marketing lead, personal care, APAC, DSM told CosmeticsDesign-Asia​ Thailand has shaped up to be a very advanced industry player.

“This is the country I where I see the newest innovations from suppliers. It’s always very surprising to me. They may not launch first here, but it always launches very quickly. I think there’s a strong dynamic market here. People like to try new products, new ingredients. That’s why I’m keeping a lookout on this market.”

In recent years, Thailand’s local beauty scene has been heating up, attracting not just foreign, but local players into the fray. These domestic brands have proven to be intriguing case studies to Guillemard.

“We’re seeing a lot of interesting brands in Thailand, like [skin care brand] Do Day Dream and in make-up there’s Mistine. We will be interested to see if [Mistine] goes into skin care.”

In addition to these, Guillemard has also observed demand for derma beauty brands. Popular Thai clinics such as Romrawin and Wuttisak have started to expand its reach through retail chains like Eveandboy.

This, said Guillemard, was one avenue DSM can potentially tap into. “We are pretty strong in cosmeceutical products with our peptides and vitamins. Overall, the trend for products with high-concentrations of vitamins is growing in Korea, Japan and I believe it’s true here as well.”

Moving forward, DSM will continue to boost its efforts in South East Asian in general. The company plans to set up a lab in Singapore to service and support the SEA region.

Guillemard concluded: “From a strategic standpoint, we are putting more resources into this region and Thailand is a big part of it. We will not neglect this country.”

Philippines

All eyes were on The Philippines when Japanese cosmetics maker Shiseido announced that it was establishing a subsidiary in the country to strengthen its foothold in its $3bn beauty market.

The flourishing consumer market holds huge potential thanks to a growing middle class and the fast-growing e-commerce market.

“There’s no doubt the Philippines is an emerging market of importance for us​,” said Nicholas Mun, regional sales manager APAC, personal care, Gattefossé.

According to Mun, the ingredient company has been paying more attention to the Philippine market since last year.

“It used to be about low-cost products but now the consumer is upgrading because their income is upgrading as well. Now, they are willing to pay a bit more when it comes to cosmetics instead of just using very basic products,” ​he said.

Mun has observed a strong demand for colour cosmetics in the market but also sees potential in the skin care space.

“Whitening is still something they are talking about. We don’t see that going away. Through discussions with our customers, we also know there’s a demand for anti-ageing products. These are the segments that we believe will continue to see growth,” ​he said.

However, with “rigid”​ regulation and taxation rules, the market comes with its own set of challenges for businesses, Mun added.

Another challenge, which the firm also views as an opportunity is the level of beauty and personal care education in the country.

“The knowledge in the Philippines is still somewhat lacking. We found that we have to do a lot of education in terms of product information. But this is a market that is open, willing to learn and ready to learn more,” ​said Mun.

In this aspect, a company like Gattefossé has a lot to offer the market, said Mun.

“The good thing is that we have a long history and a lot of information to share with them. And so far, they have been receptive to what we have to share.”

Indonesia

With a population of over 260 million, Indonesia is the largest nation in South East Asia and the fourth most populated country in the world.

Its tremendous market size has made it a major target market for the largest global cosmetics companies, such as the L'Oréal Group, which confirmed Indonesia was its fastest-growing mass market in 2018.

Specialty chemical company Clariant regards Indonesia as its base of operations for the SEA region. The company has been present in Indonesia for 65 years now and has over 1000 employees.

“We believe in continuity. If you wind the clocks back 10 years ago, we were focused on China, 20 years ago was Japan. Right now, we are establishing a footprint in the entire SEA region and our strongest base and platform since has always been Indonesia,” ​said Francois Bleger, head of Clariant business unit industrial & consumer specialties, APAC.

While Bleger expressed interest in other Asian markets such as India and the Philippines, he noted that the company would keep its focus on Indonesia for now.

Guido Appl, head of sales & application, personal care industrial and home care, APAC, shared Bleger’s sentiments.

“It’s very exciting to see the markets with their different trends and different stages of development. Definitely, Indonesia is the key focus market,” ​he said.

While the size of the market is a significant influencing factor, Appl also highlighted Indonesia’s potential to challenge Thailand in terms of formulation expertise.

“Thailand already has a very high level of formulation quality and I personally believe Indonesia is at the stage to achieve the next level in terms of formulation know-how.”

Moving forward, the company will continue to invest resources into Indonesia and the many projects it has in the country.

Most notably, it will continue its collaboration with Martina Berto. The Indonesia-based cosmetic producer has worked with Clariant to launch a range of natural ingredients featuring native Indonesian flora.

“Even though we did not launch the range very long ago, only about a year ago, we’ve already had business success with Martina Berto. It’s very exciting,” ​said Appl.

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