The cosmetics and personal care industry in Southeast Asia, which constitutes the ASEAN trading block, have been growing at an average CAGR of approximately 8.4% during the course of the past five years, to reach a current value of $14.9 billion, according to market research company Euromonitor International.
Following a presentation about the ASEAN markets at the recent Cosme Tech Cosme Tokyo event in Tokyo, Japan, Cosmetics Design caught up with Euromonitor lead analyst, Mariko Takemura, to find out more.
The ASEAN market countries
Currently the ASEAN countries consist of Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Laos and Myanmar. The latter three countries are considered to represent very small cosmetic industries, but are growing at a fast rate from that small base, while, in order of size, Thailand, Indonesia and Singapore are the biggest.
Takemura pointed out that currently it is Thailand that represents the biggest market in the region, with an estimated value of $4.1 billion, and an industry that is driven by a huge market for direct sales cosmetics, as well as professional hair care.
But it is Indonesia where the most notable growth is expected to take place in the course of the next few years.
Watch out for Indonesia!
Indonesia consists of more than 17,000 islands and has a population of around 250 million people, making it by far the biggest country in the region, especially when compared to the second most populace country in the block, Philippines with 98 million.
What has held back growth in Indonesia in the past has been a poor infrastructure and limited means of retail distribution for fast moving consumer goods players.
However, as Takemura points out, the infrastructure and retail distribution have evolved enormously in recent years, laying the foundation for significant growth for cosmetic and personal care players.
Currently the cosmetic and personal care industry in Indonesia is estimated to be worth $3.6 billion, but Euromonitor estimated that the market is currently recording breakneck growth of 17% per annum.
This growth is being fed by development in all categories, but particularly Halal certified products, in what is the biggest Muslim majority population in the world. Likewise strong growth is also being seen in the men’s grooming category, albeit from a very small base.
Philippines market driven by high bathing rate
In the Philippines, where the market is currently estimated to be worth $3.0 billion, Takemura points out that the strongest categories are shower and hair care products, which falls in line with the habit of bathing several times a day.
Takemura also stressed that recent shifts in the demographics of the country means that 40% of the population is now under 20 years old, pointing to the significant potential to engage the Z Generation as a means of generating significant future growth.
In Malaysia, where Euromonitor estimates the market is worth approximately $1.7 billion and is growing at a current rate of 5.7% per annum, again the market for Halal certified products is expected to drive demand due to the Muslim majority population.
Indeed, Malaysia is already the world’s largest market for Halal certified cosmetics, the majority of which is bought online.
Looking ahead to the future, Takemura and her team believe that the market for cosmetics and personal care products in the ASEAN countries will continue to grow at an average rate of 4% per annum to reach a total value of $19.0 billion by 2019.