A Global Analysis of the Personal Care Market

Abstract

Global trends and macroeconomic factors alike have been indicative of potential in the growth of personal care markets in the Association of Southeast Asian Nations (ASEAN). In particular, there has been an observable increase in the purchasing power of consumers, which along with a rising awareness of health and a growing interest in multifunctional products, allows for the fueling of growth and market opportunities in ASEAN regions. Furthermore, a large portion of the ASEAN personal care market is held by active ingredients, which constituted an approximate 30% of the market shares in 2013, out of which 85% was attributed to moisturizing ingredients. This market distribution is thought to be yet another contributing factor in the prediction of the growth of the ASEAN personal care market. This forecasted growth is expected to be further propelled by the regional age distribution, due to an anticipated rise in the population of the middle aged (aged 40–64), as well as the significant proportion of youths within the area, which will serve as a basis for a heightened demand for personal products targeted at the young population. Such circumstances have been predicted to drive the personal care market in ASEAN into a persisting high growth, with a CAGR of 7% between 2013 and 2017. This personal care market is currently dominated by large and growing economies such as Malaysia, Philippines, Vietnam with Indonesia and Thailand. Of this, a sizeable proportion of the market share (45% for each country), is held by Thailand and Indonesia. Other notable players in the field are the key emerging markets, which include Myanmar, Laos and Cambodia. The two most popular products are hair and skin care, which make up around 55% of the personal care markets. While technological innovation, consumer spending and greater awareness assist a company in gaining competitive advantage and greater market share, there are also numerous obstacles to the development of new active ingredients. For instance, the competition from China pressurizes global companies to cut costs, reducing the profits that could otherwise be invested for new development. The ability to invest is crucial as the main differentiation, which determines the long term gain, comes from product innovation and research and development. Another obstacle is hostile legislation. Europe and the United States are the major distributors of personal care active ingredients.