The cosmetics and toiletries markets in Indonesia and Turkey are showing great potential for growth according to the latest research from Euromonitor International, attracting interest from a growing number of international cosmetics players.
In Indonesia the cosmetics and toiletries market is predicted to grow by over 34% between 2006 and 2011 according to Euromonitor International’s forecasts, while the market in Turkey looks set to offer longer term growth as its troubled economy begins to recover.
The growth in the cosmetics and toiletries markets in Indonesia and Turkey is being driven by growing GDPs (up by 62% and 173% respectively between 2001 and 2005) and large populations. Diana Dodson, Senior Cosmetics and Toiletries Industry Analyst at Euromonitor International explains, “Both Indonesia and Turkey have the makings of important consumer markets.
Both countries are characterised by rapid urbanisation, emerging middle classes and low cosmetics usage, making them the perfect target markets for multinational companies”.
Consumer interest in appearance drives growth in Indonesia
One of the key drivers for growth in Indonesia is the emerging consumer concern over appearance, rather than just cleanliness, as consumers start experimenting with new types of products. Sales of anti-agers for example increased in value by over 27% in 2006 in Indonesia, and are forecast to increase by a total of 145% by 2011, according to the latest research from Euromonitor International.
Sales for skin care products in general grew by over 23% throughout 2006 as they became used more frequently, particularly as the twice daily facial regime becomes more entrenched.
‘Masstige’ segment holds promise in Turkey
The masstige segment in Turkey, comprising the increasing mass uptake of higher quality products, is providing a key opportunity for cosmetics and toiletries manufacturers, as the cosmetics market develops and consumers up their usage and trade up to pricier products. Diana Dodson observes, “Mass brands such as L’Oreal Paris and Procter and Gamble’s Max Factor are considered to be expensive, but also high quality, and as such are becoming increasingly popular”.
Multinationals take advantage of these prime markets
Multinational companies are already cashing in on these burgeoning markets. Unilever is the number one player in Indonesia, and 6 of the top 10 cosmetics companies are also international. Their success comes from their superior economic power and ability to tailor their brands to suit local tastes.
Euromonitor’s Diana Dodson comments, “Foreign brands are perceived as being more effective and of a higher quality than their home-grown competitors. Companies that will out-perform the rest are those that own highly recognisable brands but also offer specialised lines for Asian skin”.
In Turkey, multinational firms are leading the way in adding value to the market by focusing on advertising and innovation, further aided by a change in the law in 2005, allowing them to import cosmetic and toiletry products. However, foreign brands in Turkey do not have the instant status they hold in Indonesia, and therefore have to compete more fiercely with local companies on both quality and price.