Tuesday, March 2

A local tweak to the cosmetic revolution

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The increasingly sophisticated demand of consumers has given rise to the need to create cosmetics products tailored to meet the Asian skin type.

While Japanese brands such as Shiseido and Kose have a long standing fanbase of their own in the region and in Malaysia, other minor, more affordable brands are also beginning to surface in our stores and over the counters.

Other than Malaysia’s very own Silkygirl products, consumers are also able to observe Indonesian brands such as Mustika Ratu rising in prominence, catering to its own niche market.

For the skin care segment, Malaysia’s home grown brand, Clara International has also become a household name.

BizHive Weekly takes a closer look at some of the emerging players that are building a market share of their own, focused on their own niches.

Making beauty a thriving local business

‘Fast-moving consumer goods’ (FMCG) is a self-explanatory term for all the goods that constitute necessities. Products under this category are sold relatively quickly attributable to their comparatively low prices as well as their importance to our daily lives.

As such the industry has always stood steady among its peers in Malaysia. With most of its products being necessities, it is not difficult to see why. As the other industries get impacted by the waves of economic crises that occur every few of years, the FMCG segment remains steadily growing amid the gloom and doom.

“Generally, we believe the FMCG industry in Malaysia remains resilient as the demand for household products increases, leveraging on the growing Malaysian population, with an average growth rate per annum of two per cent,” said Kenanga Investment Bank Bhd (Kenanga Research) analyst, Teo Joo Tse.

Made up from a myriad of consumer goods from food to cosmetics, it is an important business segment for a country’s economy. As more products are made available to the general public, local companies are beginning to pick up pace in the market as well.

Through thorough research and development (R&D) and the adoption of better technology as well as improved infrastructure, regional companies have begun to quicken their pace in the market, taking up a portion of what was once dominated by multinational corporations.

Cosmetics and personal grooming has become an integral part of modern society as image and the manner in which one carries oneself affects his or her social and professional life.

While Malaysians were once heavily reliant on international brands such as the high-end Chanel, Bobbi Brown and Dior, the mid-range MAC, Revlon and L’Oreal, an emerging group of regional cosmetic brands have been making a mark in the market in recent years.

The increasingly sophisticated demand of consumers has given rise to the need to create cosmetics products tailored to meet the Asian skin type. While Japanese brands such as Shiseido and Kose have a long standing fanbase of their own in the region and in Malaysia, other minor, more affordable brands are also beginning to surface in our stores and over the counters.

Other than Malaysia’s very own Silkigirl products, consumers are also able to observe Indonesian brands such as Mustika Ratu rising in prominence, catering to its own niche market. For the skin care segment, Malaysia’s home grown brand, Clara International has also become a household name.

All these serve to prove that the premium international brands are facing substantial competition as new and more affordable brands begin to build a loyal fanbase of their own. With a sturdy outlook in the industry, the cosmetics segment seems poised to continue growing at a steady pace.

“While the cosmetics industry is not as resilient as food and beverage, the most important point would be how the companies manage their costs to achieve better returns and efficiency. But during an economic crisis, the cosmetics industry could see a possible slowdown in demand compared with the usual, more stable times,” Teo added.

Commenting on the cosmetics industry, Teo believed that there was a large group of lower-to-medium income classes that support the more affordable local brands such as Silkygirl, considering the fact that the cosmetics industry is quite spread out.

“Something worth looking at is the retail distribution and marketing services that the brand is using. For example, L’Oreal, being one of the clients of leading market expansion services provider, could make use of its comprehensive network to expand its reach.”

On that note, BizHive Weekly takes a closer look at some of the emerging players that are building a market share of their own, focused on their own niches.

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