Multinationals beware! Niche players are dominating Asia's halal beauty segment
As young Muslim women combine religious practices with fashion and beauty, new opportunities are opening up for the cosmetics industry. However, some of the big international players like Unilever and Oriflame have experienced losses in this segment in Asia.
Senior research analyst Oru Mohiuddin reports that in Indonesia, Oriflame experienced share loss of 0.3 percentage points in colour cosmetics while Unilever’s local brand for Indonesia, Citra, lost 0.1 percentage points in facial care.
Meanwhile, in that same market, niche player Wardah which offers a specific range for Hajj / Umrah, seen shares in colour cosmetics increase from a little over 1% in 2009 to nearly 5% in 2014 and an increase in skin care from 0.2% to over 1%.
Challenges lie in 'protecting shares'
Challenges for multinationals in the halal category is now not only the lure of this new white space, but also about protecting their shares. While these players would benefit from scaling up operations in halal beauty, there are a number of roadblocks.
For example, Mohiuddin says that consumers looking for halal offerings are likely to connect more closely with a local / niche brand than a distant multinational headquartered in a non-Muslim country, producing in bulk for a diverse consumer base.
"To succeed, multinationals need to develop a distinct brand identity and clear marketing messages, in addition to just certifying products as halal. Furthermore, for a more targeted portfolio it is necessary to develop a good understanding of Islamic rituals," says the analyst.
In India, a local player in the halal category - IBA Cosmetics has started to attract attention. Although Euromonitor reports it too early to determine the impact, it is a brand that multinationals will monitor in the country.
OnePure Beauty, a Dubai-based brand, operates in premium skin care and is reportedly sold through some leading stores, including Galeries Lafayette.
