Over the past few years, Southeast Asia has turn into a point of interest for financial experts and analysts. The region includes countries corresponding to Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and has a population of over 750 million people. The establishment of the ASEAN Economic Community (AEC) in 2015 and free trade agreements amongst its members have made the region a beautiful destination for investors and multinational corporations looking to ascertain trade relationships. It is subsequently not surprising that many industries are developing dynamically within the region.
One of the fastest growing markets within the region is the cosmetics and care market. The cosmetics and private care market is a rapidly growing industry in Southeast Asia, with a double-digit growth rate and set to turn into the second largest growth engine after China. This is attributed to society’s young demographics and the emergence of a growing middle class amongst nearly 600 million people.
The cosmetics and private care products market will proceed its upward trend, and revenues in 2023 will reach USD 30.04 billion. It is estimated that within the years 2023–2027 this growth will proceed at a rate of three.57% per 12 months. Among the assorted segments, personal care products is the biggest, with a projected market size of USD 14.75 billion in 2023. With the event of e-commerce, online sales are expected to account for 16.0% of the whole revenue generated by the cosmetics and consumer products market personal hygiene by 2023
Regional Product Safety Regulation
ASEAN has adopted the Harmonized System for the Regulation of Cosmetics, under which manufacturers have more obligations than within the European Union. The ASEAN region has also implemented the provisions of the ASEAN Cosmetics Directive (ACD) on cosmetic products to harmonize the necessities for cosmetic products amongst ASEAN countries to facilitate trade within the region. Implementation of the ACD began on January 1, 2008 in Singapore.
Then, to attenuate technical trade barriers, the ASEAN Cosmetics Committee (ACC) and the ASEAN Cosmetics Scientific Body (ACSB) meet twice a 12 months to debate regulations and harmonization across the region. This includes reviewing the ACD appendices.
Looking back to look forward
Quoting euromonitor’s report as a world leader in strategic market research reporting within the COSMOPROF article, Indonesia is a very powerful market in Southeast Asia. Indonesia’s large market generated annual revenues of $11.2 billion, expected by 2022, based on average annual growth of 6.3% during 2019-2022. In Indonesia, there’s an emphasis on halal cosmetics because of the growing Muslim population.
In second place is the Thai cosmetics market, which was valued at $6.8 billion in 2020. The country’s success on the international stage could be attributed to its political foresight, trade agreements and infrastructure development. Euromonitor predicts that the Thai beauty market will exceed $7.3 billion in 2022, with an annual growth rate of over 2% for the subsequent two years.
The 10 largest powers on this sector in Asia also include the Philippines, Malaysia and Vietnam. Euromonitor’s report shows that these three countries generate $8.8 billion in Southeast Asian revenues. E-commerce and recent digital sales channels played a major role within the region’s response to the pandemic, especially in Vietnam, where cosmetics sales reached 9.7% in 2020. Singapore and Indonesia also saw sales growth through digital channels, with rates exceeding 8% in each countries.
Despite a 4.1% contraction in 2020, the Philippines is anticipated to grow between 3% and 5.7% over the subsequent two years. Malaysia recorded a median annual growth rate of over 6% during 2016-2019, with a slight increase of 1.6% in 2020 and is projected to average annual growth of 6.5% in 2021-2022. From 2016 to 2019, Myanmar recorded an annual growth rate of 20%, and in 2020 it was 9.4%. A growth rate of 11% is anticipated over the subsequent two years. Laos recorded a gradual growth rate of 13% until 2019 and a rise of 11.9% in 2022.
Reference:
Charrier, Jean-Philippe. (2020). Growth outside China: mass and prestige beauty is accelerating across Asia. Glginsights.com
Politician. Beauty & Personal Care – Southeast Asia. Statista.com
COSMOPROF. (2021). Cosmetics market in Southeast Asia: tradition, innovation and quality. Cosmoprof.com
Prince, dawn. (2017). Development of Asian cosmetics. Geotimes.id
Health Sciences Authority of Singapore. Cosmetic products. hsa.gov.sg
