The global beauty industry stands out as one of the most dynamic and rapidly growing sectors. As reported by Grand View Research in 2023, the global market value for beauty products is anticipated to surpass $500 billion, with stable growth projected in the years ahead. Among the fastest-growing regions in this industry is the Asia-Pacific, including Indonesia, driven by rising consumer awareness and urbanization.
In Indonesia, social media has become a highly influential tool in raising awareness among women about the importance of self-care. These platforms facilitate various information, tips, and current trends in the beauty industry, allowing women to explore and adopt skincare practices that suit their needs.
Quoted from Kompas.id, Nailul Huda, Head of the Center for Innovation and Digital Economy at the Institute for Development of Economics and Finance (Indef), mentioned that the demand for beauty products has increased since the Covid-19 pandemic. The proliferation of beauty vloggers has influenced consumer trends and preferences, leading to increased sales in specific beauty products recommended by them. Additionally, collaborations with well-known brands have expanded their reach and strengthened brand image. As a result, beauty vloggers have become not only integral to the beauty industry but also significant contributors to shaping and driving the global beauty market.
According to Statista, the largest segment in this market is Personal Care, estimated to reach a market volume of US$3.88 billion by 2024. This indicates a strong dominance of products such as skincare, hair care, and personal hygiene products in Indonesia's beauty market.
In 2024, the revenue in Indonesia's Beauty & Personal Care market is projected to reach approximately US$9.17 billion, with an expected annual growth rate of 4.39% (CAGR 2024-2028). This forecast indicates a stable and sustainable growth potential for Indonesia's Beauty & Personal Care market in the coming years. Considering the total population, the estimated per capita income generated in Indonesia by 2024 is US$32.79, highlighting the significant market potential and consumer spending in the Beauty & Personal Care sector.
Furthermore, according to SGIE data for 2023/24, Indonesia ranks second as the world's largest market for Muslim consumers who use halal cosmetics. This highlights the popularity and rapid growth of beauty products that adhere to halal principles within Indonesia's large Muslim population.
An exemplary cosmetic brand focusing on halal products in Indonesia is Wardah. Recognized as a leader in halal beauty, according to Compass's report, Wardah achieved Rp455 billion in online sales revenue in the past year, indicating consumer trust and popularity in their products. In 2020, Wardah also embarked on exporting their products to Malaysia, totaling Rp22.9 billion, and has set sights on expanding into other international markets such as Thailand, Turkey, and Muslim-majority countries in Southeast Asia.
Furthermore, the Chinese brand Focallure has shown their dominance with sales revenue reaching Rp479.6 million for eyeshadow products in 2023.
Moreover, Indonesia is increasingly adopting sustainable skincare practices, showing a growing inclination towards using eco-friendly and responsibly sourced ingredients in beauty products. This reflects Indonesia's deepening commitment to environmental stewardship in the skincare industry.
According to the latest data from YouGov RealTime Omnibus as of April 2022, the majority of consumers in Indonesia are aware of several environmental labels. These include Ramah Lingkungan Label (66%), Green Label Indonesia (64%), IEC Label (56%), and Green Product Council Indonesia Label (55%). Additionally, more than two-fifths of consumers are familiar with the Indonesian Self-Declaration Ecolabel (46%), while one-third are aware of the LEI Eco-label (34%).
The Body Shop, a brand advocating sustainable beauty, has implemented the use of 100% recyclable plastic in its products, with 70% of its packaging being fossil fuel-free. Additionally, the brand reaffirms its commitment by refraining from animal testing for all its products. Similarly, Sukin also prioritizes environmental sustainability by using only natural ingredients. They actively engage in various initiatives to support sustainable living globally. One notable example is Sukin's collaboration with Sociolla to establish Sukin Recycle Stations across all Sociolla stores.
In this context, the beauty industry not only serves as a significant driver of the global economy but also reflects the cultural and technological evolution in this digital era. By focusing on innovation, sustainability, and adaptation to global trends, beauty companies can leverage the substantial opportunities available in Indonesia and the global market to strengthen their positions in this continuously growing industry. With appropriate strategies and commitment to quality, halal standards, and sustainability, the future of the beauty industry in Indonesia and worldwide appears promising and full of potential.
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