Growing Demand for Natural Beauty Products in Asia-Pacific Urges on Natural Ingredients*

Oct 1, 2012 | Contact Author | By: Abby Penning
Contact the Author
Save
This item has been saved to your library.
View My Library
(click to close)
Save to My Library
Title: Growing Demand for Natural Beauty Products in Asia-Pacific Urges on Natural Ingredients*
  • Article

*News item sourced from GCI, a Cosmetics & Toiletries sister publication.

The rising green consciousness in the Asia-Pacific region is generating a growing demand for natural products, and the personal care active ingredients market has been cashing in, especially with synthetics coming under scrutiny for their lack of sustainability. Customers' growing awareness and affinity for natural ingredients, higher affordability and environment consciousness is turning them toward premium natural beauty products.

New analysis from Frost & Sullivan, Strategic Analysis of Asia-Pacific Personal Care Active Ingredients Market, finds the market earned revenues of $116.6 million in 2011 and estimates this to reach $176.4 million in 2017. "Technological innovations are giving market participants a competitive edge by enhancing the ingredients' functionality," said Frost & Sullivan senior research analyst Nandhini Rajagopal, PhD. "Following the success of the new ingredients, manufacturers are replacing traditional materials with innovative ingredients; for instance, light emollients are replacing some silicon products in final formulations."

The cosmetic industry is riding a crest due to the higher spending power of the people in the Asia-Pacific region. Also, as Asia-Pacific is expected to be economically strong for the next few years, the demand for cosmetics—and thereby active ingredients—is likely to be high. Meanwhile, changing lifestyles and poor food habits are also altering strategies in the personal care active ingredient market. Premature aging due to lifestyle habits has created a new target group of 27–40- year-olds for beauty products.

Apart from these shifting patterns, the biggest challenge faced by the active ingredient suppliers in the Asia-Pacific is the smuggling and counterfeiting of ingredients. They are also significantly pegged back by competition from low-priced Chinese products. As these illegal products evade import duty and sales tax, their suppliers can afford to price them competitively and still gain huge margins, placing enormous pressure on legitimate suppliers.

Countries need to design strict regulations and enforce adherence to eliminate the threat from counterfeit and smuggled personal care products. Further, suppliers could also establish local manufacturing facilities to mitigate the effects of this challenge."Strategic relationships between manufacturers will also help synergize their strengths and overcome individual weaknesses," noted Rajagopal. "While vertical integration of industries can result in higher margins, horizontal integrations are expected to expand the product line." Such alliances have been useful to the majors operating in this segment, and could be replicated by other participants.