Move over, South Korea — Indonesia may be the next emerging beauty market to watch.
The region, which was the fastest-growing in Asia between 2011 and 2016, is expected to grow at a compound annual rate of 8 percent between 2016 and 2021, according to Euromonitor International.
“The Indonesian government is prioritizing cosmetics as a focus of its National Development Plan for Industry until 2019,” said Joanna Chan, a research analyst with Euromonitor. “It aims to increase exports of beauty products to neighboring countries such as Malaysia, Brunei Darussalam and Australia. Further, to assist domestic cosmetics companies in cost reduction, the Indonesian government is pushing for a pilot project to manufacture raw materials locally instead of importing raw materials, which is a rather expensive practice.”
Lately, local beauty brands have gained market share from international players like Unilever Indonesia, Euromonitor’s research shows. One local business, Paragon Technology and Innovation, was early to gain halal certification for beauty products in its Wardah line — a move of significance in a country with a large Muslim population.
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“With the Muslim population increasingly wary of the ingredients in the products they apply onto their skin, the halal certification, along with the use of natural ingredients, put an ease to consumers’ minds,” Chan said.
Products with natural ingredients do particularly well in the region, Euromonitor notes — calling out Citra, with ingredients like turmeric, mangir wood and ginger, and Sariayu and Mustika Ratu as brands that resonate with the Indonesian consumer.
“Consumers have traditionally always been using indigenous plants and herbs in beauty regimes,” Chan said. “They are familiar with the effectiveness of natural and herbal ingredients in beauty products [and] brands that include these ingredients in product formulations have been rather successful.”
In Indonesia, skin care is the largest segment, responsible for 12 percent of the beauty category’s growth, according to Euromonitor. Whitening products are among the most popular. “It is a key concern for Indonesian consumers whose ideal beauty standard in Indonesia is fair skin,” Chan said.
Color cosmetics are also growing, according to Euromonitor, and trends in Indonesia include drawn-on eyebrows and liquid lipstick. “Unlike most markets where facial makeup is the leading category, lip products see the highest sales,” according to Chan. “Bold, red lipstick is a staple makeup look in Indonesia.”