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Market Watch: South East Asia credit: istock Indonesia On the up There is much potential for prestige beauty in Indonesia, driven by high-end retail and a growing middle class by Alex Wynne eauty is continuing to see strong growth in while Clarins, Lancôme, Biotherm, Shu Uemura represent around $100m of the country’s beauty BIndonesia, the biggest economy in South and Shiseido are popular. South Korean brands business, are growing faster than the market, East Asia with a population of 250 million and are also fnding favor with consumers, and say industry sources, with annual growth of GDP growth of 5% in 2014. While overall Amore Pacifc’s Sulwhasoo is a recent entrant. around 25%. Products at the luxury end of the economic growth slowed last year, especially in Make-up and fragrance are both growing, prestige segment are growing by more than the second half, due to higher fuel prices and the but at slower rates. Make-up is still seen as 50%, compared with high single-digit growth currency devaluation against the dollar, this does less of a necessity to Indonesian consumers for mass-market products. not seem to have impacted beauty sales, which than skincare. Estée Lauder Companies-owned However, certain prestige brands are still are expected to continue growing by at least MAC is the prestige make-up market leader notably absent. “Chanel is yet to be launched 10% per year. “Living conditions for Indonesian in department stores, according to industry due to challenges in fulflling the required people are improving greatly,” says Ioma ceo sources, while LVMH-owned Make Up For Ever, notifcation—it planned to launch last year Jean-Michel Karam, who launched the Unilever- which has several standalone stores, is also in March, and the launch is now rescheduled owned brand in Indonesia last year. “When you performing well. for October this year,” says Luxasia Indonesia look at the country’s growth rates, compared Prestige beauty sales, although they still only country manager Wendy Irwan. “Dior has just with its neighbors, it is the Asian champion of recent years.” Complex regulations Strong growth in skincare Indonesia remains a complex market to enter for cosmetics brands in terms of regulations. Skincare still represents the lion’s share of Product expiry dates must be mentioned on both primary and secondary packaging, for the market, and continues to grow strongly example, meaning brands must produce specifc packaging for the Indonesian market. Each as consumers seek out new anti-aging and product must also be registered individually. “Indonesia is a big market, but quite diffcult whitening products. Unilever dominates the because of registration, and to start the business you have to register every sku” says ArtDeco skincare market overall with a share of around vice president of marketing Anna Blasco. “There’s a lot of bureaucracy and a lot of corruption,” 35%, far ahead of its nearest competitors. Both she says. “Notifcation with the FDA requires extensive documents and importation is another L’Oréal and Beiersdorf for example, have a 10% big hurdle with the complex regulation to follow,” says Luxasia Indonesia country manager share of the category, while P&G’s share is Wendy Irwan. Import duties on skincare and make-up have recently been increased, and a new 9%, according to industry sources. In prestige, tax on fragrance was introduced, she adds. however, P&G-owned SK-II is the market leader, 86 November-December 2015 - N°24 - BW Confidential