While the South East Asian country may be small, KOTRA highlighted that the growth of its skin care market has been “remarkable”.
Citing Euromonitor, the report said the size of Laos’ skin care market in 2020 had more than doubled to U$20.6m since 2015, recording an average annual growth rate of 15%.
According to statistics from the Korean International Trade Association (KITA), Korea’s cosmetic exports to Laos only amounted to U$200,000. However, it shot up to U$6.2m in 2021, recording an average annual growth rate of 107.3%.
Mirroring global trends, the growth of the skin care market was accelerated by the COVID-19 pandemic and sales tripled compared to the pre-pandemic era.
According to the report, many Laotian beauty consumers acquired cosmetic products from neighbouring Thailand. However, the shuttering of borders during the COVID-19 outbreak triggered the growth of the local cosmetic market.
The pervasiveness of K-beauty in Laos could be attributed to Thailand, the report suggested.
“It is inevitable that Korean products will be affected by the shopping trends in Thailand as they are exposed through Thai media, which has a strong cultural influence in Laos. As the latest trends in Thailand are spread to Laos one after another, Laotian buyers are likely to prefer K-beauty products that are popular in Thailand.”
KOTRA also consulted local cosmetic distributors and found that skin care products for sensitive skin were in demand, especially among consumers in their late teens and twenties.
Among skin care products, serums are growing in popularity. It noted that consumers aged between 25 to 35 tend to seek out anti-ageing serums as there was growing consciousness about skin issues related to ageing skin, such as wrinkles.
It was noted that there was more demand for low- to mid-priced cosmetic products and consumers sought out products with ‘good packaging and good value for money’. Conversely, the high-end cosmetics market was small.
Furthermore, Laotian consumers tended to take a conservative approach to new products, preferring to choose products that have already proved popular in Thailand.
Beyond skin care, Korean colour cosmetics were also gaining traction in the market, with the most popular categories being lipsticks, cushion compacts and blushers.
KOTRA noted that the growth of the market was hindered by its small size, which may deter K-beauty companies from entering the market. Currently, Laos imports K-beauty products from larger markets such as Thailand, Vietnam, and China.
However, it believes the market will continue to grow. “The actual size of the market itself will increase and purchasing power will increase, and Laos will become a centre of logistics and consumption and can serve as the Dubai of Indochina.”
It attributed its confidence in the market partially to the inauguration of the Boten–Vientiane railway in December 2021, which connects the landlocked country with China. With the resumption of international tourism, the Laotian government is currently promoting tourism with China.
The report concluded: “As the Laotian beauty market is still in its early stages of growth, it’s necessary to approach it with a long-term perspective in order to successfully enter it. If you have a history of selling products in the Thai market, it would be easier to enter Laos.
“Proactive support for distributors is essential. In particular, they are often troubled by the minimum purchase quantity offered by Korean companies… Furthermore, it would be great help to provide them with product certificates received in Korea, online and offline marketing promotions, and sample products.”