The Asian beauty explosion: How can brands benefit?
The global retail industry has changed dramatically since the turn of the century, with trends such as the evolution of mobile technology and the explosion of social media transforming how consumers get inspiration, engage with brands and make purchases.
It is a challenging time for many retailers, but also one of great opportunity for innovative businesses that are able to tune in to what their customers want and need.
Recent growth in the beauty sector has highlighted the opportunities available in retail at the moment, despite the challenges so many companies are facing across the industry. In no region is the potential of the beauty market more evident than Asia.
Beauty bucks the trend
The beauty market has shown it has the resilience and enduring appeal required to continue growing in recent years, while other industries and sub-sectors within retail have buckled under various pressures.
Earlier this year, the Financial Times reported that beauty is "thriving" against a backdrop of record bankruptcies and store closures across the wider retail industry. The market is now thought to be worth some $465 billion (£356.2 billion) globally.
Moj Mahdara, chief executive of trade event Beautycon, said beauty is taking off at a time when retail is going through a "massive reinvention".
"Eighty-six per cent of women buy make-up; 78 per cent buy skincare," he said. "Billions of people are online at all times, scouring for something that's going to make them feel better."
In 2017, the beauty sector "defied the odds" by achieving value growth of close to five per cent, according to Euromonitor International. This was fuelled by trends including a desire for luxury spending within expanding global middle and upper middle classes, and the emergence of "disruptive" digital brands that are grabbing the attention of younger consumers.
As far as regional trends go, Asia has shown itself to be a hotbed of growth and innovation in the beauty market.
Asia's key trends
Japan and South Korea are two of the best-established markets on the Asian beauty scene, home to a number of brands that are having a big impact within the region and further afield.
Firms such as Shiseido of Japan and Glow Recipe of South Korea have won fans through their product innovation and ability to capture the attention of the younger demographic. Chinese brands are also achieving growth by tailoring their approach to meet the needs of local consumers, according to Mintel.
Looking beyond Asia's economic powerhouses, some of the most exciting opportunities for growing brands could be found in emerging markets such as Indonesia, the Philippines and Vietnam.
The potential of these countries is growing all the time for retailers, partly thanks to rising spending power in the expanding middle class and the demand for bespoke products that are relevant and useful for local populations.
Euromonitor International highlighted India and Indonesia as the "next frontiers" of beauty industry expansion, with India set to overtake Germany, the UK and France to become the fifth-largest beauty market by 2022. Indonesia is expected to be the third-largest contributor to actual revenues in skincare, behind only the US and China.
To take advantage of the clear opportunities available in Asian beauty markets, businesses must invest in research and preparation to ensure they can offer something that provides genuine value for their local audience.
Not only is it important for product offerings to resonate with consumers, but marketing campaigns and content must also be tailored to achieve maximum engagement.
Through localisation, companies expanding into Asia – a region of great complexity and cultural diversity – can ensure all of their promotional material feels natural, appropriate and relevant in each country they enter.
Steps to success in Asia
Given its huge diversity and the unique demands and quirks of different nations across Asia, brands hoping to achieve long-term success in the region need to take a targeted approach. 'One-size-fits-all' is a philosophy doomed to fail in this part of the world.
In the beauty sector, retailers need to know which countries are predominantly Muslim and will expect halal-certified products, for example.
It could also be highly beneficial to recognise the demand for skin whitening products in the Philippines, or to learn that many South Korean consumers view beauty products as something functional, as opposed to an indulgent treat.
Businesses hoping to succeed in Asia must also ensure they get their digital strategies right. The region was home to more than two billion internet users as of December 2017 – nearly as much as the rest of the world combined – and social media plays a hugely significant part in the lives of millions of consumers.
Maximising search visibility, social media engagement and general online activity is likely to be a crucial ingredient in any company's success in the region.
For those that get it right, it's clear that there is massive potential for retailers and ecommerce brands to achieve growth and profitability in Asia.
With all the signs pointing to ongoing expansion in the beauty sector, this could be one of the most dynamic, competitive and fast-moving spaces in the industry, which means plenty of opportunity for ambitious firms.
Image: maroke via iStock