Indonesia Investments wishes all Muslims a happy & generous Ramadan
25 May 2018 (closed)
USD/IDR (14,166) -39.00 -0.27%
EUR/IDR (16,582) -47.80 -0.29%
Jakarta Composite Index (5,975.74) +29.20 +0.49%
Indonesia's cosmetic industry remains attractive for foreign and domestic investors. Based on data from Beauty Market Survey (BMS), which were obtained through Nielsen and Euro Monitor, the value of Indonesia's cosmetics industry was estimated at IDR 36 trillion (approx. USD $2.7 billion) in 2016, up around 12 percent from the value in the preceding year.
There exists rising demand for beauty and personal care products in Indonesia. The major drivers of this growth are hair care products (37 percent), followed by skin care products (32 percent), and make-up (10 percent). Growth of this market is attributed to a number of factors:
- Indonesians are becoming increasingly aware of their well-being
- Make-up is increasingly becoming part of women's lifestyles
- Indonesia's female population now numbers over 130 million
- A growing number of Indonesian men, especially in urban areas, are now buying and wearing cosmetic and skin care products
- Indonesia has a big population that is seeing its per capita GDP rising, thus there is a rising number of mid-income and affluent consumers
- In times of economic slowdown, Indonesian women continue to buy beauty products
Solid and structural growth of Indonesia's personal and beauty care market is reflected by the corporate performance of Unilever Indonesia. This company is among Indonesia's largest consumer goods producers and ranked within the top ten of companies that control the largest market capitalization on the Indonesia Stock Exchange. One of Unilever Indonesia's business segments is home & personal care products. In line with the aforementioned, the company's sales continue to rise, even in times of economic slowdown. Therefore, its shares also show structural growth. So far this year Unilever Indonesia's shares have risen 5.28 percent to IDR 50,800 a piece.
Stock Quote Unilever Indonesia - UNVR:
Seeing the potential of the domestic cosmetic industry the Indonesian government placed this industry among its priority industries in its National Development Plan for Industry up to 2019. Hence, cosmetics has been given an important role in the economic development of Indonesia. This involves the development of import-substitution industrialization (currently most raw materials for the cosmetic sector still need to be imported), which would also generate plenty of employment opportunities for local workers.
In the future the government wants to increase exports of cosmetics, particularly to regional neighbors such as Malaysia, Brunei Darussalam and Australia.
The positive prospects of Indonesia's cosmetic industry has resulted in a rising number of local brands entering the market, thus it has resulted in a much tougher competitive landscape. But it is interesting to note that in the cosmetic industry there exists a high degree of customer loyalty, hence if a consumer feels comfortable with a certain brand then he or she is unlikely to switch to another brand. Therefore, these companies need to innovate and develop new products in a bid to boost their market share.
The big foreign and domestic players in Indonesia's beauty and personal care market are Unilever Indonesia, Paragon Technology, Innovation, L'Oreal Indonesia, Mandom Indonesia, Mustika Ratu, Akasha Wira International, and Martina Berto.