Juanita Aditiawan, President of ASEAN Cosmetics Association, Vice President of Indonesian Cosmetics Association (PERKOSMI)
Customs data shows that in the first three quarters of 2023, China’s exports of cosmetics and personal care products amounted to 34.861 billion yuan, marking a cumulative year-on-year growth of 26.6%. China’s cosmetics exports are thriving.
At the same time, how Chinese cosmetics brands evolve from quantity to quality, and their positioning on the international stage, has become a new topic of this era. During the 2023 FORUM ON BEAUTY ECONOMY AND SUSTAINABILITY, ONE OF ZGC FORUM SERIES OF ACTIVITIES, the “Trends Discussion” column, with a keen eye, interviewed representatives from ASEAN member countries such as Myanmar, Thailand, Malaysia, as well as leaders of cosmetics industry associations from France, Europe, and other places. They dissected global trends in the beauty market and key regulations, aiming to support companies in their international expansion. In this interview, Juanita Aditiawan, President of ASEAN Cosmetics Association, Vice President of Indonesian Cosmetics Association (PERKOSMI), was interviewed.
CHAILEEDO: According to data, the beauty and personal care market in the ASEAN region has shown significant growth. The revenue of the beauty and personal care market in 2023 has reached 29.97 billion US dollars, with an expected annual growth rate of 3.56%. International beauty giants have also been actively expanding their presence in Indonesia. Why do you think the beauty industry in Indonesia is developing so rapidly?
Juanita Aditiawan: First of all, the growing purchasing power of Indonesia’s middle class has enabled them to invest more in beauty products and services, promoting the thriving development of the beauty industry in Indonesia.
Additionally, Indonesia has a predominantly young population, with a significant presence of Generation Z. Therefore, they have a high acceptance of beauty trends. Indonesian young people are well-informed about the latest global beauty industry trends and incorporate them into their daily lives. For example, Indonesian youth spend a significant amount of time each day browsing social media platforms like TikTok to stay updated on the latest beauty trends and engage in creating beauty-related content.
Furthermore, the rise of e-commerce in Indonesia has provided consumers with convenient multi-channel shopping experiences. Platforms like Shopee and Lazada have witnessed substantial growth in Indonesia, further driving the development of the beauty industry in the country.
CHAILEEDO: From your observations, what are the characteristics and trends of the cosmetics market in the ASEAN region?
Juanita Aditiawan: ASEAN consists of ten member countries, each with its own unique cultural, traditional, and diverse skin tones, resulting in variations in the characteristics of the cosmetics markets in each country. However, a common trend seen across all countries is the rise of Generation Z. This generation is highly knowledgeable about beauty industry trends and tends to purchase products that align with their values, including sustainability. They are also more willing to invest in environmentally-friendly products and embrace a green lifestyle.
Another significant trend in the ASEAN market is the growing demand for halal products. Countries such as Indonesia, Malaysia, and Singapore have significant Muslim populations. As a result, there is an increasing preference for products that have obtained halal certification, appealing to consumers who prioritize adhering to Islamic dietary and lifestyle requirements.
CHAILEEDO: The Asean Cosmetics Directive (ACD) is the regulations for cosmetics in the ASEAN region. What key points can you share with Chinese cosmetics companies? What should Chinese cosmetics companies pay attention to when entering the ASEAN market?
Juanita Aditiawan: Chinese cosmetics companies looking to enter the ASEAN market, especially countries like Indonesia, need to consider the following key points:
Establish legal entities: Chinese companies must comply with the declaration procedures required by Indonesian or ASEAN regulatory agencies. It is crucial to establish a company or designate a responsible person in the target ASEAN country.
Appoint a representative or advisor: The representative or advisor acts as the liaison between the company and regulatory agencies. They are responsible for handling the declaration procedures to ensure compliance with regulatory requirements.
Ensure product safety: Chinese companies must ensure that their products are safe for consumer use. They should maintain Product Information Files (PIFs) or data for each product. These records should be readily available for regulatory agencies to review the safety and compliance of the products.
Possess technical and market expertise: Chinese companies should have relevant technical knowledge and experience in the cosmetics industry. Understanding the specific regulations and requirements of the ASEAN market is crucial for successfully entering the ASEAN market and complying with relevant regulations.
CHAILEEDO: On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) officially came into effect, marking the formal establishment of the world’s largest free trade area with the most populous countries and the largest economic scale, creating new opportunities for Chinese domestic cosmetics to go global. In your perspective, what impact does RCEP have on the cosmetics industry in the ASEAN region?
Juanita Aditiawan: The Regional Comprehensive Economic Partnership (RCEP) has had different impacts on the cosmetics industry in the ASEAN region, with variations among countries. Thailand and Singapore have already exported cosmetic products to China. Overall, the cosmetics industry has benefited from improved cost-effectiveness and enhanced quality in the supply chain.
One major advantage brought by RCEP is that cosmetic manufacturers find it easier to access a lower-cost and higher-quality supply chain, including packaging materials, ingredients, and machinery required for production. By obtaining more affordable and superior inputs, manufacturers have the potential to reduce costs and improve the quality of their cosmetic products.
RCEP has reduced trade barriers benefiting countries like Thailand and Singapore. The decrease in tariffs has facilitated smoother trade flows and increased export opportunities for their cosmetic products. Improved market access conditions have enhanced the competitiveness and provided greater development space for these countries in the regional and global cosmetics market.
For countries like Indonesia, RCEP contributes to the improvement of supply chain and marketing opportunities with China. Through the agreement, Indonesia can enjoy lower tariffs when importing cosmetic-related materials from China, potentially reducing production costs or increasing profit margins.
CHAILEEDO: In 2022, the largest category of products exported from China to the ASEAN region was beauty and skincare products, with an export value of $367 million, showing a significant increase of 82.8% compared to the previous year. How do you think Chinese cosmetics currently perform in ASEAN countries? What products stand out? What categories you recommend to enter ASEAN countries?
Juanita Aditiawan: Currently, Chinese cosmetics brands have limited influence in ASEAN countries. However, many cosmetics companies in the ASEAN region choose to engage in OEM production in China, particularly in Guangzhou. I believe Chinese cosmetics brands need to focus on brand building and establish visibility in the ASEAN market.
An important trend in the ASEAN region is the demand for halal cosmetics, especially in Indonesia. Chinese cosmetics brands can consider catering to this trend to gain acceptance among the Muslim population. In Indonesia, non-halal cosmetics may face resistance from Muslim consumers.
Chinese companies must recognize the diversity of ASEAN countries and adjust their products and marketing activities accordingly. Each country in the region has its own unique culture, traditions, and consumer preferences. By offering personalized products and marketing activities, Chinese brands can better resonate with local consumers and gain a competitive advantage.
In terms of specific categories, it is recommended for Chinese companies entering the ASEAN market to focus on color cosmetics, professional hair salon products, and skincare. Professional hair salon products can help companies enter the promising salon industry, while skincare remains a popular and highly competitive category.
