Beauty Products Market
Asia is the second largest market for beauty products, behind Europe. The Asian region encompasses many countries that cover a wide array of economies, with a great diversity in wealth and consumer market development.
The beauty and personal care products market is one of the most diverse and dynamic marketplaces globally—with the sector, ranging from the basics used for everyday needs to the most prestigious and luxurious products. The marketing interest in Asia is strong, as these economies have over 3 billion consumers. Because of the diversity of the consumers of the region, it is important for marketers to focus on the dynamism of the emerging and novel markets.
The potential for sales of beauty products in the Asian markets is vast; however, it is important to understand the trends within each diverse economy. China is one of the largest markets for beauty products in Asia. The general higher personal hygiene standards have lead to a steady growth in the Chinese market. In 2013, Chinese women and—increasingly—men spent US$26 billion on cosmetics alone, reflecting a 13.3% growth annually according to Euromonitor International. The Chinese middle class is growing rapidly. In 2030, 70% of the population is expected to be middle class, increasing average disposable income, which will likely continue to grow the beauty products market. Currently in China, cosmetics and beauty products now outstrip groceries as the highest selling item in department stores, according to a Fung Business Intelligence Center report. Some of the highest categories of growth in China (2014) include: baby and child-specific products, men’s grooming products, color cosmetics, and skincare. Currently in China, large domestic companies have relied on popular TV shows to market and spread awareness for their products.
While China remains the leader in the Asian beauty products market, Japan’s beauty market has experienced recent contraction. However, in 2014, the Japanese beauty products market enjoyed its third consecutive year of growth. Along with the positive growth, premium products gained share. The older population in Japan is increasing while the younger generation is shrinking. Manufacturers and businesses that are targeting the Japanese market should focus on consumers over the age of 50. Popular categories include: skincare for the aging population, hair care, sun, and oral care. Looking ahead, the beauty products market in Japan is projected to remain flat in the forecast. However, as the population is predicted to decline, the volume of sales is projected to do the same. Manufacturers will likely increase unit prices and sales per consumer in order to maintain the current market.
Although the Japanese have the highest standard of living in Asia, South Koreans are more likely to buy prestigious and luxury skincare products and less likely to spend money on basic soap and shower products. Beauty products have been experiencing serious growth in the past few years in South Korea. Vivienne Rudd—director of global innovation at market researcher, Mintel—stated that South Korean beauty and personal care retail market posted 5.8% annual growth up to 2013, compared with just 2.1% for the UK and 3.9% for the US. Increasingly, South Korea is setting the tone for the growing market in skincare products, creating the all-in-one BB creams that are popular internationally. Currently, South Korea is a hot market for innovation and innovative products, even overtaking markets like Japan. South Korea is establishing its expertise in skincare. Because South Korea has a current obsession with innovative products—using unique and new ingredients—sales of large, international premium brands and sales in department stores slowed while sales through specialist retailers experienced growth in 2014. Domestic beauty and personal care had already reached maturity by 2014 in South Korea, thus Korean manufacturers are seeking overseas markets for future growth. However, the research and development efforts to create new and interesting products have continued to help the popularity of the market—both domestically and overseas.
Although India has one of the largest economies in Asia, the beauty products market is limited to urban areas. Awareness of beauty products through TV and media marketing has driven growth in 2014, primarily in premium brands. At this time, international brands are dominating the beauty products market in India. The future of the market includes Internet retailing as the next big distribution channel.
The most dynamic markets in the region are Indonesia and Vietnam. The combination of the expansion of the middle class and the emerging wide consumer base at the lowest price platforms will sustain steady growth. The skincare market will generate around 46% of Asia’s beauty products market value growth over 2013-2018. The skincare market is becoming largely diverse in terms of price tiers, formats, and functions. Although small retailers are becoming more popular in certain countries, mass markets continue to dominate 70% of total regional sales in 2013 and are only expected to increase further by 2018.
It is clear that the Asian market is one of the most dynamic and diverse regions in the world. Because of the booming regional beauty products market, it will benefit marketers and manufacturers to watch and understand the marketplace within each country of the region before entering.
