Cosmetics in Indonesia

A Hot Tip about Cosmetic Surgery in Indonesia

Posted on: 17 Feb 2010

Summary

The cosmetics industry in Indonesia has experienced tremendous growth in the last three years. The sales prospects remain good with steady growth projected over the next two years. While local products account for over 80 percent of the market share, imported cosmetics with international brands are widely available in the Indonesian market. Despite rapid growth in the industry and sharp competition among brands, Indonesia is still a good potential market for imported cosmetics. The market is expected to grow at an average of 10-15 percent annually.

 

U.S. products have a strong presence in Indonesia. Other competitors come from China, U.K., France, Germany and Japan. Consumers lifestyles, increased awareness of personal grooming, introduction of new products, growth of modern retail outlets and high-end shopping malls, and increasing number of beauty services offered, should lead to positive growth in the cosmetic sector. Couple these with a population of 220 million people, Indonesia presents a market with strong growth and a good opportunity for U.S. cosmetics.

 

There are no restrictions on importing cosmetic products to Indonesia. However, imported cosmetics must be registered at the National Agency of Drug and Food Control (Indonesian acronym BPOM). Import duties for cosmetic products are 10 percent. In addition, a value-added tax (VAT) of 10 percent is imposed on all imported cosmetic products.

 

Market Demand

Cosmetics and toiletries in Indonesia will continue to be in high demand. Even though competition among these products is fairly high, overall demand will continue to increase substantially. Domestic manufacturers are successful in the middle and low-end market segment, and supply most of the local demand. In addition to local products, there is good acceptance for imported cosmetics in Indonesia. Imported cosmetics represent around 16 percent of the total market. Most popular cosmetics brands have entered the Indonesian market and are enjoying growing sales. Major players in this segment are the U.S., China, U.K., France, Germany, and Japan. U.S. cosmetics are well regarded by the high-end consumers, and are well positioned in the Indonesian market place.

 

In the cosmetics sector, skin care products accounted for more than 23 percent of total imports. The U.S. was the third largest supplier in this category. Business sources predicted that the market size and sales for skin care products will continue to increase due to the growing awareness of the value of skin-care treatment for both males and females. An increasing number of men, as well as working women, are more concerned about their skin care, driving the demand for men-specific products, as well as anti-aging and whitening products.

 

Business sources estimate that the growth for anti-aging and whitening products was between 20-25 percent in 2007. They stated that in the near future, the market for both local and imported anti-aging and whitening products still has potential to grow. High-end consumers prefer using imported cosmetics and search for brands that can provide status and benefits. Furthermore, Indonesians in general continue to look for products that can provide solutions for wrinkles and pigmentation. Skin care products that rejuvenate, brighten and whiten skin, reduce and prevent wrinkles, improve elasticity and provide skin firming are widely sought.

 

Men’s cosmetics and toiletries are becoming popular and the potential is large. Business executives, community leaders and celebrities are concerned about their personal grooming and they have a strong desire to look distinguished. Spas and salons offering treatment programs for executives and celebrities have increased in numbers. Male consumers utilize spa services after work for relaxation purposes. Men’s personal care segment, such as cleansers, moisturizers and skin care products for anti-wrinkle protection have shown increased demand in recent years, a sign that this segment of the Indonesia cosmetics market is growing. Most men’s cosmetics are sold in department stores and through multilevel marketing companies.

 

The growth potential is also affected by increased demands from the service industry such as beauty parlors and spas. More people seek professional help for facial and skin treatment, stimulating the growth in sales for skin care products. More new upscale beauty salons and skin care clinics were opened in the fashionable areas as well as shopping centers. The number of professional hair care salons selling specialty products has also increased.

 

In addition to generic spa and beauty treatments, spa businesses and related product lines have increased their offerings to consumers. Wedding spa or pre-wed body and beauty treatment has become a trend in Indonesia, contributing to the growth of skin care market. Presently, local products dominate the market for skin and body care. The Indonesian spa industry is widely recognized particularly in the hotel and resort areas. There are increasing opportunities for spa aromatherapy supplies, since local producers lack the research capabilities to develop good quality products.

 

By Sharon Chandra

 

Read the full market research report


Posted: 17 February 2010

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