Nielsen: Indonesia’s rural cosmetics consumption shoots up
According to the survey, revenue growth of rural markets has been particularly high, ballooning by over a quarter in 2013 alone.
News reports state that volume growth also continued outside rural areas despite prices increasing by over 18 per cent.
The study covered nearly 50 million Indonesian households, including 11.08 million rural and 38.2 urban families.
At a press conference earlier in September when the research was announced, Hellen Katherina, director of home panel services for Nielsen Indonesia, said: “This survey shows that the rural areas in Java have huge potential and that producers have great opportunities to maximize it.”
Differing markets
The research showed that cosmetics sales in rural areas of Indonesia grew by 27.5 per cent to Rp 82 bn in 2013.
Spending in urban areas increased more slowly, by 9.4 per cent, but still made up by far the largest market segment at Rp 606 bn.
Katherina told CosmeticsDesign-Asia.com: “The growth in the rural areas is driven by two factors: a 5 per cent increase in penetration (or five per cent more households buying cosmetics) and an increase in spending on cosmetics.”
“For the latter, it is due to price increase (the average price increase in rural areas for cosmetics is 18 per cent).”
Meeting the demands
The survey highlighted the different demands of rural and urban markets, in particular with regard to pricing and the variety of brands available.
A much wider variety of products were purchased by consumers in urban areas, with an increasing trend towards buying more different types of cosmetics.
On the other hand, consumers dwelling in rural areas who bought three or more brands in 2012 had a tendency to reduce the purchases to two or fewer brands in 2013, in line with higher prices.
Katherina predicted: “In rural areas, I think affordability is a big concern. So beauty needs to be affordable but at acceptable quality.”
“In urban areas, people are more adventurous and ready to spend. So the key is to be innovative and to maintain quality.”
