Indonesia, with a population more than 240 million inhabitants and with rising of consumer spending power and awareness about health and beauty care, offers a promising market for cosmetics companies.
- The cosmetics market expected to grow 10 – 15 percent annually.
- In 2012 the sales of cosmetic in Indonesia was US$ 1.01 billion and imports of cosmetics was US$ 0.275 billion.
- A number of global cosmetics manufacturers successfully entered Indonesia market.
- Indonesia has 30,000 cosmetic, aromatic and medicinal plants which is the second largest number after Brazil.
- Hundreds of Indonesian family-run cosmetics producers seek partners to market their products beyond national border.
Indonesian cosmetic is developing at a solid pace, which can be seen from 2012’s cosmetic sales growth of 14 percent to US$ 1.01 billion, from US$ 0.96 billion in 2011. Strong demand is attracting increasing imports of cosmetics from abroad, especially for premium products. Imports rose steeply from US$ 166.2 million in 2011 to US$ 275 million in 2012 and increased further to an estimated US$ 281.43 million in 2013, the ministry’s data shows.
According to Nielsen, sales of cosmetics in urban areas increased by 9.4% year-on-year in the first half of 2013 and in rural regions increased by 27.5%. More than 9,000 cosmetics registered by the government in 2012 and 10,926 in 2011, more than foods or any other consumer product.
L’Oreal have been opening its largest factory in the world at the end of 2012 in Jababeka, West Java. Last year as the biggest factory of a global cosmetic company in Java the most populous island in the world. When this decision came in relation with business results only for last year they had 30 percent sales growth and they expect that the Indonesian cosmetic become the third biggest in Asia. That why also other rivals as Unilever, the current country’s market leader, plans to expand and invest to new production as well and meet demand from new middle class consumers.
Another indicator showing. Even last year were 9,000 cosmetics registered for sale by the government.
Cosmetics play an increasingly important role in the daily lives of Indonesians and the skincare market. Meanwhile, it is growing so much that cosmetic companies are even starting to take aim at men. So e.g. L’Oreal’s Indonesian sales growth is up 300 percent for men’s products and enjoying 30% average sales growth for years. Another giant cosmetics producer, Unilever has enjoyed years of steady growth and achieved a 16% increase. These affect in both revenue and profit in 2012 for Indonesia market. Cosmetic sold by direct selling (Oriflamme) in lipstick category had significant growth of approximately 30% in 2011.
In term of source, Indonesia is the world’s second largest mega centre of biodiversity after Brazil and habitat for about 90% of medicinal plants species found in Asia. Indonesian traditional medicine is called Jamu, it was the result of biodiversity and cultural diversity. Until now, the rural population still relies on traditional medicine for their health-care needs.
Family Cosmetics Sector Producers
Also Indonesia has hundreds of family-run cosmetics producers. These firms are looking for opportunity to ship their goods beyond national borders. And looking for falling trade barriers across the Asian Free Trade Area will help them much. The ASEAN Harmonized Cosmetic Regulatory Scheme, implemented in 2008. This standardizes rules on the safety and quality of cosmetics across the ten countries in the ASEAN.
Under the new regulation, in addition to a distribution permit (izin edar) and any applicable requirements under the prevailing import law, importers of drugs and food require approval from the Head of BPOM, i.e. an Import Certificate (Surat Keterangan Impor – “SKI”) which is valid for one import. This requirement also applies to imports in free trade areas and free ports.
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How to register cosmetics product in Indonesia
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