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Market Watch: South East Asia credit: istock Thailand Tough times Thailand’s beauty market is seeing a slowdown, but the prestige segment seems to be holding its own by Alex Wynne hailand remains the biggest beauty market tourism is expected to play a growing role with estimates, compared with 35% for skincare. Tin the ASEAN region, with beauty and the implementation of the ASEAN Economic Thai consumers are investing more in their personal-care sales of $4.94bn in 2014. Yet, Community (AEC) at the end of 2015, leading to appearance and are digitally savvy, observers say recent political instability and last year’s drought increased traveler infows to Thailand. —it is estimated that three-quarters of the Thai has led to a slowdown in economic growth. online population is on Facebook, for example. GDP growth of around 2.5% is now expected in Prestige continues to grow As a result, brands are upping their social media 2015, down from previous estimates of around Yet, despite the country’s weak economy, activity in the country. 3.6%, after growth of only 0.7% last year. prestige beauty sales continue to grow. Prestige Fragrance, meanwhile, although still a small Following the 2014 coup by the military beauty is estimated to represent sales of around market, is anticipated to see stronger growth junta, the unstable political climate looks set to $514.8m, and many players in the segment are than make-up or skincare over the next few continue—although there were suggestions that reporting brisk business. La Prairie has seen sales years. Fragrance sales grew 8.4% in 2014, elections would be held this year, these have grow 20% in Thailand so far this year, according now been put off until 2017. A new constitution to La Prairie president and ceo Patrick Rasquinet, will also be voted in September. “Overall, there while Estée Lauder Companies said it saw higher Thailand beauty and personal-care sales* by is a bit of a slowdown in Thailand,” says Luxasia constant-currency sales growth in Thailand in category 2014 ceo Patrick Chong. “The market is not moving in the year ended June 30, 2015. Clarins is also Category Sales $m % change a very strong way, and is being affected by the seeing strong growth in the country, according 2014/2013 movement of tourism. The political instability is to sources. “After the political situation caused Skincare 1,806 +7.4 creating headwinds.” major disruptions to the retail market last year August’s terrorist attack in Bangkok in a major for six months, Thailand has continued to be a Color cosmetics 560 +7.3 tourist and shopping area is also likely to deter competitive market,” states Rasquinet. Fragrance 204.3 +8.4 tourists, who represent an important part of Make-up represents a high proportion of Beauty & 4,935 +7.1 consumption in Thailand—tourism accounts the beauty business compared with other personal care for around 20% of the country’s GDP. Indeed, Asian markets, at 30%, according to some Source: Euromonitor International *Retail sales 84 November-December 2015 - N°24 - BW Confidential