With sales amounting to US$11.2bn in 2001, the Asia-Pacific region scoops the lion’s share of skin care sales globally, accounting for over 37% of the overall market. Following the economic repercussions of the Asian financial crisis of 1997-1998, the region’s sales of all personal hygiene and cosmetic articles have made a strong recovery, although suffered a 3.5% decline last year due to economic recession in Japan.
Skin care sales however, proved to be quite resilient, losing just 1.3% in 2001 – the sector having established itself as the largest and amongst the fastest growing of all products in the region, with growth that easily outperformed the market as a whole. Like the other more cosmetic sectors of the market, sales of skin care products have been positively affected by increased levels of consumer confidence as the region has continued to recover. Expenditure on facial skin care accounted for the main part of sales, due to the mass popularity of products such as skin-whiteners across the region.
Increased penetration in emerging markets…
At country level, skin care accounted for a major share of sales in a number of national markets, most notably South Korea. Share tends to be most significant in the most developed markets, such as Hong Kong and Japan, where more consumers are sufficiently affluent to afford higher margin products such as nourishers/anti-agers. Share of such products has increased rapidly in these countries in recent years, in accordance with more women entering the work force, resulting in such women having higher disposable incomes to spend on products previously perceived as superfluous, and in countries such as India, on higher priced international brands.
…and higher per capita spend in others
As many consumers in the more developing parts of the region turn their attention to some skin care products for the first time, in Japan, where this sector is mature, sales are driven by the strength of facial care products and the prevailing importance amongst women of maintaining an extensive facial skin care regime. In terms of consumer expenditure, Japan accounted for over one half of total regional spending on skin care, reflecting high levels of disposable income, but also the country’s fastidious approach to personal grooming – underpinned by the importance of a daily skin care regime. In contrast to the Western three-step skin care regime, the Japanese facial skin care process can involve up to seven stages, comprising two cleansers, three moisturisers, a toner and a beauty lotion. Although not all women engage in this lengthy routine, the average facial skin care process takes much longer compared to the West. Another significant factor that has affected skin care sales in Japan is its rapidly ageing population, which has led to a profusion of new products targeted at the 50+ age group, particularly creams with extra nourishing properties, those containing effective anti-ageing properties and ingredients for very dry skin. In addition. sales of skin whiteners have surged, driven by heightened concern to maintain beautiful skin amongst Japanese women of all ages. Mirroring a pan-regional trend, sales were also boosted by the growing number of working women, which stimulated consumer demand for more convenient product formulations, such as facial washes and disposable cleansing wipes. Whilst certain products witnessed a decline in unit prices, somewhat hindering full potential value growth in this country, facial moisturisers and nourishers were both able to boost their unit prices further in 2001 with the launch of higher-priced premium brands offering scientifically-advanced features.
As evident in most national markets, nourishers/anti-agers are expected to lead growth across Asia-Pacific over the next five years, having turned in a consistently robust performance in recent years – most notably achieving 3% value growth last year, the strongest of all skin care products. As products which claim to rejuvenate the skin and reduce wrinkles tend to be higher priced products, typically premium or upper mass alternatives, value sales are likely to be inflated further, at a higher rate than accordant growth in volume terms.
The rise and rise of whitening
In important national markets such as Japan, South Korea and Taiwan, the thriving bihaku (white beauty) boom remains one of the most significant driving forces for overall growth, as manufacturers cater to the Asian preference for a fair complexion. According to leading industrial sources, up to 60% of Japanese women use skin whitening products in their daily regime, presenting manufacturers with a strong opportunity for continued growth. In 2001, the major players sought to maximise potential value sales by offering complete skin whitening regimes, comprising not only of moisturisers, but also cleansers, toners, day and night nourishers and even facial cleansing wipes. Kanebo’s Blanchir Whitening Night Conditioner stood as one of the best sellers in 2001. Whitening products are expected to see a surge in growth over the forecast period, given their dynamic performance in 2001. The launch of more sophisticated cosmeceutical products should also add value to more developed markets, such as South Korea and Hong Kong.
Despite continued economic uncertainty in its largest market, Asia-Pacific looks set to remain the most valuable regional market for skin care over the next five years, with sales boosted by rising disposable incomes, particularly in the region’s developing economies. Also critical will be the growing availability of international brands, fuelled by the continued expansion of the retail network. The key global skin care players are already gaining ground – particularly in the prestige arena – by tailoring their offer to the Asian consumer, and thus throwing down the gauntlet to the Japanese giants (Godzilla notwithstanding). One thing’s certain; when all the preparatory work is complete the rewards are likely to be great – little can quell this region’s thirst for skin care.