In 2018, the skincare market in Indonesia was valued at $91.0448 billion, and it is projected to reach $188.2824 billion by 2030, with a compound annual growth rate of 7.8% from 2021 to 2030.
In 2017, due to government support for the development of the skincare industry in Indonesia, the number of registered local cosmetics companies (mainly small and medium-sized enterprises) increased by 25%. Currently, the total industry count exceeds 76,095, all of which are small and medium-sized enterprises. Additionally, as proven by Presidential Instruction Number 14 of 2015 (Perpres) regarding the National Development Core Plan for 2015-2035, the government is placing special emphasis on this industry, with cosmetics and traditional medicine sectors becoming pillars of the diversified national economy. Despite various promotion and marketing efforts by domestic brands over the years, both domestically manufactured and imported international brands continue to dominate the skincare sales in Indonesia. These brands' dominance is challenging to break because skincare products have specific target customers who often exhibit brand loyalty. Approximately 12-15% of the total population of the country falls into the middle to high-income range. These consumers primarily reside in major cities and have the capability to purchase high-end imported products. For this particular group, quality, brand image, and trend-setting are the primary considerations when buying skincare products. From a statistical perspective, Indonesia's shopping malls have experienced rapid growth over the past decade. In Jakarta alone, there are over 100 registered shopping centers. Over 10% of them are used for high-end or luxury imported products. This is expected to provide profitable opportunities for European brands, which are considered expensive but high-quality and, therefore, quite popular. Within the forecast period for the Indonesian skincare market, an increase in the female population of the country and a higher preference for natural skincare products are expected to further enhance the skincare market's opportunities.
Market Segmentation
The Indonesian skincare market is studied based on product types, demographics, age groups, and sales channels. By product type, the market is segmented into facial care, body care, eye care, lip care, and others. By demographics, it is categorized into male and female. Age groups include Generation X, Millennials, and Generation Z. Sales channels are divided into supermarkets/hypermarkets, specialty stores, department stores, beauty salons, pharmacies, and online sales channels. In terms of sales channels, in 2018, hypermarkets/supermarkets held the largest share of the Indonesian skincare market.
Market Competitors
Key players in the Indonesian skincare market include Beiersdorf AG, Estee Lauder Companies Inc., Groupe Rocher, L'Oreal Group, Procter & Gamble, PT Kino Indonesia Tbk, PT Mandom Indonesia Tbk, PT Martina Berto Tbk, PT Paragon Technology and Innovation, and Unilever Indonesia.
Particularly, Halal regulations provide new opportunities for the Indonesian skincare market. Halal regulations not only give local brands a competitive edge in the domestic market compared to global brands but also further allow local Halal-certified cosmetic manufacturers to establish their influence in niche overseas markets. For instance, the French cosmetics giant L'Oreal already has a Halal-certified factory in Indonesia, supplying the domestic market and the Southeast Asian region. Most products are sold under the Caniel brand, including facial cleansers and Halal-certified whitening creams.
Additionally, local beauty products giant Martha Tilaar Group's Director of Creativity and Innovation, Kilala Tilaar, believes that natural or organic beauty products are driving the growth of the personal care and beauty industry in the country. However, in the Indonesian skincare market, localized multinational companies continue to dominate, with Unilever Indonesia, Procter & Gamble Indonesia, and L'Oreal Indonesia leading the market competition.