Skintellectual generation, live commerce, K-wave open up halal cosmetics opportunities – report

The State of the Global Islamic Economy 2023/24 Report was published by DinarStandard in partnership with Salaam Gateway and supported by Dubai’s Department of Economy and Tourism.

According to the report, Muslim consumers’ spending on cosmetics was estimated at US$84bn in 2022, and was forecasted to grow at a CAGR of 8.9% to reach US$129bn by 2027.

India and Indonesia remain the two largest markets, while Turkey has moved up to third position.

As mask-wearing regulations relaxed and people engaged in more outdoor activities, the demand for makeup, particularly lipstick, rebounded.

Wearing makeup was also said to have become an emotional booster in the aftermath of the pandemic.

At the same time, consumers were looking for more natural, gentle, and skin-friendly ingredients, leading to a rising trend of hybrid, multi-tasking products where skin care benefits are added to makeup formulas.

“Consumers are increasingly aware that healthy skin is the foundation of beauty. The emerging ‘skintellectual’ generation is well-informed about clean and authentic beauty, and often shares knowledge with their communities. This is a generation that is open and eager to learn new concepts, including halal beauty,” ​the report said.

The growing popularity of non-alcohol and naturally sourced perfumes was highlighted, with Dior’s 2022 launch of its first alcohol-free and water-based fragrance, J’adore Parfum d’eau, cited as an example.

Therefore, companies were recommended to tap into these spaces for innovation, such as the adoption of non-alcohol perfume production technologies like Water Plant Emulsion (WPE).

Despite an optimistic outlook, challenges remain for the halal cosmetics sector. These include poor consumer perception of halal products, many of which have reportedly failed to effectively address users’ primary skin care concerns.

“Many consumers expect more added value beyond the halal label. They need ‘Tayyib’ (which means clean and pure in Arabic), or solutions to their skin problems that have a positive impact on the society and environment.” ​

This spells opportunities for cosmetics companies that look into improving the efficacy of their products and backing them up with scientific evidence, as well as creating products that precisely answer halal consumers’ needs.

Digital influence ​

According to the report, the “explosive growth” of social and live commerce platforms, especially TikTok, has played a huge part in raising awareness of halal beauty in recent years.

“Live commerce platforms, such as TikTok Shop, offers new engagement and education to consumers about halal cosmetics. It has strengthened the role of halal beauty experts and influencers, and also impacted the increased adoption of skin care among men, with premiumisation being one of the latest trends for male skin care products. ​

“Global makeup trends in 2022, including ‘passport makeup’, ‘red nail theory’, and ‘slugging’, were powered by TikTok and dominated Google’s top trending beauty searches that year. Ingredient research is also prevalent on TikTok.”​

The most common ingredients that consumers are searching for are niacinamide, hyaluronic acid, and retinol.

“In Indonesia, retinol is also gaining popularity on Twitter (now known as X), due to its important functions for healthy skin. Avoskin, Originote, and Azarine are brands that are often mentioned by Indonesian consumers in conversations about retinol.”​

Turning customers into co-creators​

Pandering to the interests and increased awareness of clean beauty among young consumers, companies are turning to co-creation for product development and sales boost.

One such company is community-driven beauty platform KIKI. In 2023, it launched a water-based nail polish series called Pretty Nail Graffiti, and invited members to vote on the nail polish colours to launch next.

Members who participated in the voting process were rewarded with a virtual membership card built on decentralised blockchain platform Ethereum, in addition to exclusive product perks, insider access, and member-only loyalty points.

Another example is Indonesia’s Mad for Makeup​, which leveraged over 1,000 of its members for product and marketing development targeting Gen Z users.

Furthermore, the advancement of beauty tech has spurred innovation of products that are more inclusive and personalised.

For instance, Estée Lauder UK and Ireland launched the Voice-Enabled Makeup Assistant (VMA) application, designed to assist visually impaired users in applying makeup easily and confidently.

L’Oréal-owned Lancôme has also introduced AI-powered makeup applicator HAPTA​, which was engineered to enable people with limited hand and arm mobility to apply lipstick and mascara with precision.

K-wave blowing strong​

Another factor that has propelled demand for men’s skin care in Organisation of Islamic Cooperation (OIC) countries is the Korean wave.

“Korean beauty content and celebrity endorsements play a significant role in driving increased exposure of skin care brands to more men. As awareness of dermatological health grows, skin care is no longer exclusively for women but also for men.”​

Meanwhile, South Korea is actively building its global trade network, including for Korean halal cosmetics.

For example, cosmetics ODM company Kolmar Korea is set to begin supplying halal cosmetics to the UAE, marking its first foray into the Middle Eastern beauty market.

Additionally, CosmeticsDesign-Asia​ recently reported on the halal certification support project​ initiated by the Ministry of Food and Drug Safety that serves to facilitate local companies’ entry into the halal cosmetics market.

“More Korean firms are open to exploring partnerships with OIC companies to develop halal beauty products. These local cosmetic brands can collaborate with Korean brands, which have strong R&D and marketing capabilities [to further growth].”​