The personal care market in Asia is significant in both raw material production and finished product launches. To fully grasp the ever-changing personal care market, one must certainly study it on a global scale. The following Q&A delves into the trends and issues facing the person care market in Asia. The answers are given by personal care experts in Asia including: Pushker Sona, PhD, Unilever’s R&D Director of the Global Face Care CTC Skin and Regional Technology Centre; Kevin Roden, Thor Specialties’ regional technical manager for the Asia Pacific region; and Pamela Jones, conference consultant for China’s personal care and home care ingredients show, PCHi, which will be taking place in Guangzhou, China, on Feb. 24–26, 2009.
Q: What are the most notable changes to the personal care and home care industry you have seen in the Asian markets in recent years?
Roden: The biggest change I have seen is the shift towards using natural ingredients in personal care and even home care products. This has created a greater demand for natural ingredients and posed challenges to raw material manufacturers as to whether they can provide the required product or adequate supply.
Jones: In Asia, the acceptance and sophistication of new formulations is increasing. Previously, they were lagging behind in development of new formulations compared to western markets. However, persistent media influence and training of the general public has led Asian audiences to quickly accept new ideas and trends. This applies not only to the personal care industry but the home care segment as well.
A notable strength in Australia is their high level of technical expertise. However, one of the downsides is that the Australian cosmetic manufacturing industry is shrinking. Government regulations and increasing manufacturing cost makes the local scene too expensive to compete with most Asian countries, even for exporting. But thankfully, they are still able to stay buoyant with their high level of technical expertise in formulating and ability to provide consultation on new technology.
Sona: I’d like to first comment on the Asian cosmetics industry as a whole. It’s quite vibrant and dynamic with some countries achieving double-digit growth across various consumer segments. This success is driven by brand owners’ compelling communication and the launch of innovative products that address the needs of targeted demographics at various price points. The Asian market has seen a significant rise in the high-end and masstige (prestige for the masses) segments. The male segment has also opened up and is now growing at a healthy rate.
India is going through a huge transformation with intense competition in all segments. While there is still a demand for low or medium-priced products, the rising disposable income of India’s middle-class consumers has provided opportunities for companies to market products at high price points. At the same time, consumers are also demanding better quality and high performance products. Strong media influence has also contributed to the growth of India’s personal care industry. However, the market still suffers from lower consumption compared to neighboring countries in ASEAN.
Q: Besides India, the other important global player is China. Where do you think the country stands in terms of influence on the personal care and home care industry?
Jones: China occupies an extremely important position in the global personal care market. Virtually all multinational companies have their Asian manufacturing headquarters based in China, mainly due to the cost-effectiveness of setting up business there and the country’s strategic location on the world map. China’s prospects are good with their high standards in R&D and proliferous multiplication of new plants. They are also able to supply most raw materials locally, cutting out long lead times taken for import.
Roden: I agree that China is a crucial player, both as a giant consumer and as a manufacturer for global exports. The large domestic market puts pressure on Chinese and international formulators to develop products that meet the specific needs of local consumers.
Sona: There is no doubt that China is one of the fastest growing markets worldwide, driven by foreign business penetration. It is expected that supply and demand in China will continue to grow at more than 10% due to their robust economy and an almost half a billion consumer base--the largest in the world. China offers an excellent business opportunity when it comes to sourcing of raw materials and products. It is also an ideal place to build R&D hubs due to the availability of skilled workers and its sound infrastructure.
Q: What are some promising global trends that you see for the personal care and home care ingredients industry in 2009?
Roden: Where natural products are not available, the pressure has been to produce products with lower toxicity, real or perceived by the market. The development of new preservative formulations to meet these needs has been particularly challenging.
Sona: I agree with Kevin. With the heightened awareness and increased vigilance of consumers and regulatory bodies, there will be a clear focus on functional ingredients that are safe and cost-effective. In addition, there is also a growing inclination towards ingredients with a good sensory feel and offers a naturally healthy look.
Jones: For personal care, I think the tissue or wipes market will experience some interesting growth. The convergence of cosmetics and pharmaceuticals to form cosmeceuticals is also another promising trend I see on the horizon. We’re seeing a lot of personal care manufacturers expanding into dietary supplements or oral cosmetics that offer beautifying benefits. In addition, the home care industry will see a further shift to concentrates, thus reducing the amount of packaging and the use of raw materials. This fits in nicely with the low chemical, environmentally-safe ideology that is being preached globally.
REACH is also causing a ripple effect scenario across Asia. Multinationals that are manufacturing products for use in Asia and as exports to Europe will have to ensure their factories comply with REACH. What we will see is a global standardization of regulations and product safety as manufacturers in countries outside Europe strive towards REACH standards. Suppliers of raw material ingredients will feel the impact first as their customers are demanding that their ingredients comply with REACH. Products with raw material ingredients that were previously approved for use might now be disallowed and companies will have to go back to the drawing board to reformulate their products. This is a behavioral trend that will take precedence in 2009. The end result is greater safety and peace of mind for the consumer.
Q: What knowledge do you hope attendees leave with from the upcoming PCHi conference?
Jones: As the conference consultant, I hope attendees can learn something new from the information presented by international experts at PCHi. China is striving to be on the cutting edge of new technology and ideas, and the conference provides an avenue for people to tap into this abundant pool of knowledge.
Sona: That’s right. They can get an overview of latest technological advancements and market trends to assist them in building superior products. The different conference tracks offer strategic insight on new ingredients, delivery systems and fresh directions that can help drive the growth of various segments in the personal care industry.
Roden: I hope that attendees are able to learn about new aspects of technology or toxicology regulations which they can take back to their home country to benefit their workplace.
Q: Could you give us a sneak preview on the topics you’ll be presenting at PCHi?
Sona: My talk focuses on how companies can create breakthrough innovations through having a deep consumer understanding, leveraging emerging marketplace technology and use good formulation practices to design the product. After all, innovation is more than invention. It is the sweet spot between invention and insight.
Roden: I will be presenting on the regulatory requirements affecting manufacturers who are producing personal care and home care goods for sale within Asia and for export to European countries. I will talk about the Harmonization of Cosmetic Regulations through the Asian Cosmetic Directive and REACH and also cover testings required to meet these requirements. I am also looking forward to sitting in at one of the conference sessions on product claim substantiation, as I believe this is becoming an important issue for the industry.
Jones: I’d like to also add that as we speak, a new section of the conference is evolving. I am in the midst of organizing workshops that provide hands-on demonstrations of the technologies that are being presented. This is something that’s seldom seen at most trade shows and will be a value-added experience for attendees.