Indonesian beauty brand expanding its portfolio to compete with L'Oréal

23-Feb-2016 - Last updated on 22-Feb-2016 at 18:39 GMT

Leading cosmetics player in Indonesia, Martina Berto, has announced it is acquiring Rudy Hadisuwarno Cosmetics, a brand which specialises in the hair care sector and cosmetics more generally, in order to drive up its market share.

The company has previously announced that it is looking to expand and strengthen its brand and product offering in the country, aiming to compete more aggressively with its two key competitors, multinational L’Oréal, and domestic herbal cosmetics brand, Mustika Ratu.

The acquisition of Rudy Hadisuwarno is a move towards this goal, with the company’s secretary, Desril Muchtar, telling the Jakarta Post that it intends to invest in the newly-acquired brand “wholeheartedly”.

“Now, with this acquisition, our costs turn into investment,” he reportedly confirmed.

A mixed domestic showing

Martina Berto currently enjoys a strong presence within the herbal cosmetics and health care categories, and is particularly known for its popular brand, Sariayu-Martha Tilaar.

According to the Jakarta Globe, the beauty company saw sales rise by 10.27% to Rp 483.3 bn in the period of January to September last year. However, with operational costs and currency losses taken into account, its net profit for the year actually decreased by about 10%.

The sales growth it did see, though, was reportedly driven by the company’s cosmetics offering, which perhaps explains its renewed interest in expanding its beauty and personal care presence in the country.

Growth opportunities

The company recently confirmed it is looking to increase sales by 10-15% this year, and the Rudy Hadisuwarno acquisition is tipped to help it get there.

Previously, the brand was part of Martina Berto’s offering, but the parent company acted only as a third-party distributor and retailer of Rudy Hadisuwarno products. Following the acquisition, the larger company now owns the brand in full.

“Now, we don’t need to pay the royalty anymore […] and can develop the brand as our own asset,” Muchtar reportedly explained, confirming that, despite the necessary investment into marketing the parent company will now have to make, its acquisition will streamline and increase the profits of its Rudy Hadisuwarno sales.