Skincare in Asia: Past, Present and Future

Ready to take on Asia skin care?

Hui Hui Lim

Senior FMCG Research Analyst
Euromonitor International
Outline

Skin Care: Now and Beyond

Retailing Landscape

Countries Focus – Japan, China, India

Growth Opportunities and Challenges

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Euromonitor Scope – Cosmetics & Toiletries

Cosmetics &
Toiletries Asia
Baby Care China
Hong Kong, China
Bath and Shower Products Skin Care India
Deodorants
Facial Moisturisers Indonesia
Hair Care
Nourishers/anti-agers Japan
Colour Cosmetics Malaysia
Facial Cleansers
Men’s Grooming Products Philippines
Toners
Oral Hygiene Singapore
Face Masks
Fragrances South Korea
Lip Moisturisers
Taiwan
Skin Care
Body Care Thailand
Depilatories
Hand Care Vietnam
Sun Care
Outline

Skin Care: Now and Beyond

Retailing Landscape

Countries Focus – Japan, China, India

Growth Opportunities and Challenges

Skin care: Current state in Asia

Total Asia skin care sales worth US$26 billion in 2007

Skin Care Value Per Capita (US$) 2007 % growth

Japan 102 Indonesia 26
Hong Kong 73 China 16
Taiwan 58 Vietnam 15
South Korea 57 India 13
Singapore 41 Singapore 10
Thailand 14 Malaysia 10
Malaysia 10 Thailand 9
Philippines 5 Philippines 7
China 4 Taiwan 5
Indonesia 1 Hong Kong 4
Vietnam 1 South Korea 4
India 1 Japan 2
 Potential growth in Asia 2007-2012

3.5 Hydration is a key concern

among Asians

3.0

Facial moisturisers
2.5

Ageing population, younger women

US$ per capita 2007

2.0 taking precaution drive growth

Limited new product
launches
1.5 Liquid/cream/gel/bar
cleansers Nourishers/anti-agers
Toners
1.0

Celebrity endorsement
General purpose body and mass products
0.5
care Face masks
Firming/anti-cellulite body
Facial cleansing wipes
Lip moisturisers Hand care care
0.0
-2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0

-0.5

Forecast growth 2007-2012 (constant value CAGR)

CAGR: Compounded Annual Growth Rate

Asia skin care: Drivers
Growing worldwide wealth
Changing consumer lifestyle
Globalisation
Celebrity endorsement increases consumers’ awareness and
interest
World vs Asia Annual Disposable Income
US$ billion
60,000

50,000

40,000 World
Asia
30,000

20,000

10,000
21% 23%
-
2007 2012
Year
5 major skin care trends

Strong desire
for fair skin

Men’s skin care Anti-agers

Skin Care

Natural & ethical Skin care

products application
Strong desire for fair skin: Drivers

Asians’ beliefs
“White hides three ugly bits” 一白遮三醜
Bihaku trend in Japan
Fairer equals to upper class

Stressful lifestyle
Busy lifestyle resulting in less sleeping time
Stress hormone sends the skin’s oil glands into overdrive
Strong desire for fair skin: Key trends & developments

Technology advancement

Whitening extends beyond

the face Skin whitening for men
Strong desire for fair skin: Beyond 2008
More stringent regulations on skin whitening products

Critics on skin whitening products

Anti-agers plus whitening products

Anti-agers: Drivers
Ageing population

Accelerated ageing

Rising pursuit of agelessness

Anti-agers: Key trends & developments

Target young consumers

Prevention better than cure

Super-premium
From global to local brands

Mass brands developments

Cosmeceuticals
Collaboration between cosmetics and
pharmaceutical company

Cosmeceuticals: Products marketed as

cosmetics but reputedly containing
biologically active ingredients and
claiming to have medicinal or drug-like
benefits
Anti-agers: Beyond 2008
Aesthetic Beauty
Services Industry
New technology and ingredient Most developed Japan

South Korea
More regulated industry to ensure Taiwan
the safety of cosmeceuticals
Hong Kong

Singapore
Facing strong competition from
aesthetic beauty service industry Thailand

China

Malaysia

Indonesia

Philippines

India

Least developed Vietnam

Skin care application: Drivers

Increased consumer knowledge on skin care application

TV beauty programs educates consumers on different products’ benefits

Technology advancement
Skin care evolution thanks to technology and research
Beauty web blogs to allow consumers to exchange ideas
Skin care application: Key trends & developments
New routine
Cleansing Liquid
Usual routine
Cleanser Cleanser

Lotion
Toner

AC Essence
Moisturiser
Mask

Emulsion

Effector

White Essence Cream

Skin care application: Beyond 2008
Forecast Number of Hotel/Resort Spas
Development of more powerful in Asia 2007-2012
%
products 2007 2012 Growth

India 105 217 107

Consumers may “outsource” Vietnam 43 86 100

personal care and pay for spas

Thailand 524 894 71
and treatment
Malaysia 94 156 66

Philippines 85 130 53

China 367 547 49

Taiwan 215 315 47

Singapore 44 59 34

South Korea 48 62 29

Hong Kong, China 17 20 18

Indonesia 379 399 5

Japan 1,038 1,049 1

Natural & ethical products: Drivers

Massive awareness of health & wellness

Safety scares and recalls

Consumers look for guarantee of authenticity

Rising greensumerism

Technology facilitate the development of more effective products

Natural & ethical products: Key trends & developments

Edible, natural and herbal ingredients

Environmentally friendly packaging

New retail concepts

Minerals and precious materials,

including gold
Natural & ethical products: Beyond 2008

Packaging innovation: eco-friendly packaging

Same consumer buying both high technology and natural products

Emergence of ‘at-home-make’ products

Venture into other products, such as sun care

Well-known designers and celebrities increase consumers’ knowledge

on natural & ethical products
Men’s skin care: Drivers

Workplace
Pressure from competition in workplace led to the emergence of
metrosexual man

Greater acceptance in developing nations

Move to more ‘advanced’ products
Men’s skin care: Key trends & development

Stronger growth than skin care

Moving away from 3 basic cleaning steps

6%
40,000

35,000
8% 33,991

30,000
25,916
25,000
Men's skin care
US$ value

Skin care
20,000

15,000 14%
8%
10,000

5,000
797 1,173
0
2007 2012
Year
Men’s skin care: Beyond 2008
Macho-sexual vs metrosexual
Increasing popularity of sportsmen
Lower acceptance of men’s colour cosmetics
Main focus will still be skin care and other men’s grooming products

VS

New technology
Focusing on convenience

Cosmetics surgery for men

Getting popular in countries like Japan and South Korea
Outline

Skin Care: Now and Beyond

Retailing Landscape

Countries Focus – Japan, China, India

Growth Opportunities and Challenges

Retailing landscape: Store-based retailers

Store-based retailers account 73% of total skin care sales

Supermarkets/hypermarkets value share increase
Department stores grow in developing countries

35.0

30.0

25.0
% value share

20.0
1997
15.0 2007

10.0

5.0

0.0
Supermarkets/hypermarkets Department stores Health
Health & beauty
and beauty retailers
2008-2013 Super/hypermarkets Department stores retailers
Outlet openings 32,100 1,163 328,033

% growth 26% 13% 21%

Retailing landscape: Non-store retailers
Non-store retailers
Internet retailing is the strongest growth channel
Direct sellers losing popularity in developed countries but growing in
developing countries

25.0

20.0
%value share

15.0

1997
2007
10.0

5.0

0.0

Homeshopping Internet retailing Direct selling

2008-13 % CAGR 6% 9% 4%
Outline

Skin Care: Now and Beyond

Retailing Landscape

Countries Focus – Japan, China, India

Growth Opportunities and Challenges

Japan, China, India: Macro Trends 2007

Japan China India

Political Stability? Yes Yes Yes
Economic GDP (% real growth): 2.1 11.4 9.2
GDP (US$ billion): 4,379.7 3,400.4 1,146.7
Inflation (% change): 0.1 4.8 6.4
Social Population (million): 127.7 1,319.1 1,148.9
Population aged 65+ (%): 22.4 9.0 5.1
Urban population (%) 66.0 44.7 29.2
Technology Internet users
(% of total population): 72.4 11.7 11.2
Level of technology
advancement: High Mid Low
Japan, China, India: Skin care key trends & developments
Skin care sales comparison
Value sales 2007
Value sales 2012
2007-2012 % Constant Value CAGR
16,000.0 14.0

14,000.0 12.0

12,000.0
10.0
US$ million

% Growth
10,000.0
8.0
8,000.0
6.0
6,000.0
4.0
4,000.0

2,000.0 2.0

0.0 0.0

Japan China India

Japan skin care India low per capita

China’s skin care being
accounts for 50% spend on skin care
eyed by companies
of total Asia sales but will strike ahead
CAGR: Compounded Annual Growth Rate
Japan, China, India: Expected developments in 5 key
areas

Beauty
Natural Ethical
Country Niche Brands Cosmeceuticals Services
Ingredients Cosmetics
Industry

Japan

China

India

Developed

Emerging

Nonexistent
Japan, China, India: Beyond 2008

Japan China India

Strongest Nourishers/anti-agers Nourishers/anti-agers Nourishers/anti-agers
growth product
Premium vs Mass driving growth Premium driving Premium driving
mass growth growth

Competitive Local companies More foreign players Local companies

landscape dominate entering China focus on natural
positioning; foreign
players expanding
Others Blurring boundaries Product safety and Beauty specialists
between food, beauty recalls growing in India
and pharmaceuticals
Outline

Skin Care: Now and Beyond

Retailing Landscape

Countries Focus – Japan, China, India

Growth Opportunities and Challenges

Growth opportunities and challenges

Food and drink with Greater

pharmaceutical Regulation
ingredients

Ingredient
Nutraceuticals Innovation

Skin Care Deliver micro amounts

Supplements positioned of medication to the
at improving outward place where it is
appearance needed

Nutricosmetics Nanotechnology
Growth opportunities: Blurring boundaries
Nutraceuticals
Lumaé

Food Pharma
Cosmeceuticals

Cosmetics
Nutricosmetics

Nutricosmeceuticals?
 Any questions?

EUROMONITOR INTERNATIONAL
Hui Hui Lim – Senior FMCG Research Analyst

huihui.lim@euromonitor.com.sg