Summary
According to industry estimates, the Singapore cosmetics and toiletries retail sector is worth approximately US$400 million. The U.S., France and Japan are the top three leading suppliers of cosmetics, toiletries and fragrances to Singapore. The U.S. enjoys a good reputation and is recognized by the consumer as one of the leaders in the industry. Its share of the market has stayed fairly constant over the last few years.
The beauty business is fairly resilient to economic cycles and continues to thrive in affluent Singapore. Industry sources say that approximately five new brands enter the market each year but this however, does not necessarily translate to a significant growth in the consumer base. To stay relevant, top brands invest heavily on marketing and research & development. Products are constantly evolving and improved upon to satisfy the needs and wants of the discerning consumer.
The domestic retail market is sophisticated with various market segments, from those with high disposable incomes who seek premium and high-quality products, to mass-market consumers who are more price-sensitive. Besides an affluent, local resident population, Singapore is also home to over a million foreigners, with a significant expatriate population that enjoys and demands a high-quality lifestyle.
U.S. companies seeking to expand into the emerging markets of Southeast Asia should consider using Singapore to launch their products and services. With more than 80% of all imports of cosmetics, toiletries and fragrances re-exported, Singapore serves as an ideal gateway into the region.
Market Demand
Over the last two years, suncare has been the dynamic growth sector as more awareness has been generated on the harmful effects of the sun’s UV rays. Suncare products are being bundled with regular skin care programs and some are incorporated into facial creams for easy application. Men’s grooming products and deodorants have also expanded. Growth is underpinned by an increasing number of “metrosexuals” – affluent men who are conscious of how they look and image-conscious women who place high priority on personal grooming and appearance. In addition, women at a younger age are starting to apply makeup and experiment with hairstyles and hair care. Multi-level marketing firms have also increased their market presence as they promote their products under the “holistic and wellness” label, cross-selling cosmetics, hair care, skin care and nutritional supplements.
Private labels fared relatively well, maintaining their market share in the past two years, largely due to the sustained popularity of “house brand” cosmetics and toiletries, such as Marks & Spencer, a brand largely accepted by Singaporeans as high quality. Other popular private labels include The Body Shop, The Natural Source and the more mass-market, Watsons and Guardian. Private label products also saw strong growth in personal care and men's grooming products.
The distribution channel with the greatest value share of cosmetics and toiletries sales in Singapore is department stores, accounting for nearly 31% of sales, followed by chain stores that are typically personal care stores and pharmacies located within suburban malls.
Growth in Singapore's cosmetics and toiletries market is expected to see more competition among the top premium brands and an increase in the number of companies serving specialized niche markets. One growth segment is the organics sector. While not going head-on against the larger companies, these niche players will serve to expand the market by providing either unique or complementary products to consumers.
By Luanne Theseira
