A new report by leading global data and analytics company GlobalData has found that the Asia-Pacific (APAC) region will continue to be the world’s largest skincare market through to 2022; and is forecast to reach $US90.9 billion.
The company in its latest report “Opportunities in the Asia-Pacific Skincare Sector” forecasts that the APAC region, which accounted for a 57.5 per cent value share of the global haircare sector in 2017, is set to grow at a compound annual growth rate (CAGR) of 6.4 per cent between 2017-2022.
The biggest attributer to this exponential growth is consumer trust in natural ingredients, and a boost in innovations in plant-based formulations.
Although counterfeiting of skincare products currently poses a major threat to the manufacturers in APAC, the region’s judicious consumer base provides abundant opportunities for brands to innovate on products with ‘natural/organic/non-synthetic’ formulations. The report notes that products with ingredients like green tea extracts and macadamia oil are driving the growth of both luxury and mainstream skincare brands; while an image conscious male population is adding to the sales of skincare products. This will in turn push the brands to focus on the consumer affinity towards natural and organic ingredients, thereby boosting growth, according to Srimoyee Nath, GlobaData senior analyst of consumer markets.
The APAC market for skincare products is highly fragmented with the top five brands holding a value share of 14.2 per cent in 2017. The presence of a large number of brands makes the market increasingly competitive, with consumers often switching brands and settling for more personalised products.
The top 10 companies in the region include L`Oreal S.A., Kose Corporation, Shiseido Company, Amorepacific Corporation, Kao, Procter & Gamble, Amway Corporation, Unilever, Beiersdorf Ag and LG Corp. Most of these are present in body care and facial care categories. However, depilatories, hand care and make-up remover categories are less exploited areas for the leading companies in the skincare sector, reveals GlobalData.
The company has identified Hong Kong, South Korea, China and Malaysia as the four high potential countries in the region based on the company’s ranking methodology. Rising disposable incomes in growing economies such as China, as well as a strategic location of Hong Kong, are expected to drive the value and volume sales in the region. Moreover, a significant male population in these countries seeking skincare solutions catering to specific male nuances is also boosting growth in the sector
