The Beauty and Personal Care (BPC) market in Southeast Asia is robust with market size estimated at approximately $30 billion and growth rate estimated at 5% CAGR. While the COVID-19 pandemic impacted demand, a swift recovery is expected over the next two to three years.
Longer term, the market outlook is positive, with growth drivers including population growth, rising disposable income, brand proliferation and increasing use of digital influence.
Buying patterns differ within the region. Skin care and color cosmetics are expected to see more growth throughout Southeast Asia as markets mature. The introduction of halal BPC products is expected to increase demand among Muslim consumers, especially in Indonesia and Malaysia.
It is also evident that channels are evolving. Sales in small, stand-alone General Trade (GT) stores are strong in most markets, but Modern Trade (MT) sales (in hypermarkets, supermarkets, discounters and convenience stores, which are easier for brands to reach) are on the rise. The online channel emerged as the biggest winner during the pandemic, and that trend is expected to continue. But online retail penetration rates in Southeast Asia are lower than those in other Asian markets — there is room for growth in online sales.
Share of the premium segment in Southeast Asia is expected to increase along with overall growth. Demand for premium products is strongest in mature markets — over half (54%) of BPC sales in Singapore are premium, compared to 26% each in Malaysia and Vietnam, the next-largest premium markets.