Outlook
Over the years, we have seen the skincare market in Indonesia climbing to the top. With the combination of young consumers and the post-pandemic economy, Indonesia has seen an increase in sales in the skincare market.
Based on predictions from GlobalData the skincare market in Indonesia will continue rising and is estimated to increase by 9% by 2026. This growth is a result of greater financial independence for working women, greater interest in natural & organic products among the youth, and greater attention to grooming by men.
Market overview
Before the pandemic in 2020, supermarkets had been the leading distribution channel for the Indonesian cosmetic market. However, the pandemic has shifted the cosmetic distribution channel from offline stores to online platforms. This trend is expected to continue as consumers seem to enjoy the convenience of having products delivered to their front door by delivery services such as Gojek Instant Service.
With the wide use of the internet, people working from home, and social media promotion, there is an evident push in sales from e-commerce platforms such as Shopee, Tokopedia, BliBli, etc. The skincare market is estimated to grow by a further 20% in 2023 according to McKinsey.
Key insights into the skincare market in Indonesia
Beauty is a must!
Beauty is a social standard in Indonesia, currently females in Indonesia along with their male counterparts, who they outnumber, are focused on self-care and beauty in general more than ever from an early age.
Women in modern and urban cities such as Jakarta are being socialized to believe that beauty is a must-have where companies are including ‘good looking’ and ‘attractive’ as a key part in job requirements.
Korean beauty still preferred
Korean beauty still attracts the attention of the majority of people as K-beauty products almost always come with high innovation, technology and are gentle to the skin. In addition, K-Beauty products are very variative to use, so they can be a one-stop answer to various skin problems Indonesian women face.
Over the years, due to the increase of the K-beauty trend, many Korean artists or ‘idols’ are seen to become brand ambassadors for more local brands in Indonesia, such as Sometinc with NCT Dream and Lee Min Ho for Azarine Cosmetic.
Back to naturals
Indonesia is a country rich in natural resources, therefore, the demand for natural products continues to grow as more Indonesian skincare users become more knowledgeable and aware of the use of chemical products.
This is one of the many reasons why Korean brands which focus on using natural ingredients in their products are widely popular in Indonesia, such as Innisfree or Nature Republic.
Challenge in skincare
The challenge itself comes from the consumer. Customers have a lack of product loyalty due to the plethora of products that claim to offer and provide equal or even better prices. The saturated skincare products in the marketplace can leave consumers confused with purchasing decisions, meaning they tend to try different brands or products every time.
The next challenge is from government regulations. Skincare products are considered as controlled goods by Indonesian customs, and this is a major challenge for companies and brands who would like to sell their skincare products in Indonesia. To do so, they must apply or register for a license to the Indonesia National Agency of Drug and Food Control (BPOM). The registration process and details needed to complete the documentation from both the raw material supplier and manufacturer is a long process.
Lastly, most of Indonesia’s population is Muslim therefore consumers will need to ensure that their favourite product is “Halal” or not. This means that the product must follow Islamic Law, which must not include any swine/pork or non-halal animals or must conform with Islamic law. Therefore, every cosmetic product distributed in Indonesia must secure halal certification from Majelis Ulama Indonesia (MUI).
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