“The complexity of distribution in Asia is leading many natural personal care brands to take the direct route and open concept stores,” found specialized market research firm Organic Monitor. Indeed, the structure of the distribution in Asia is very different than in Europe or in North America. For instance, Asia has few natural and organic food shops and mainstream retailers have little experience in marketing natural and organic products.
In order to tap into the dynamic Asian market for natural and organic personal care products, which is estimated to grow by over 15% a year, Western brands try to bypass traditional distribution structures and invest in their own boutiques. According to Organic Monitor, their number is mushrooming. “In the last 12 months, over 25 new concept stores have opened in Asia. Although most openings are by large natural and organic brands, small firms are also taking this ‘preferred entry route’ into Asia.”
With over 35 concept stores in the region, Jurlique is leading the way. The Australian organic skincare brand has been expanding across Asia since receiving a capital injection from Japan-based Pola Orbis last year. Jasmin Aromatique, another Australian company, is also gaining a strong market presence. It is operating 20 concept stores and has set up 4 manufacturing plants to service growing demand from the Asian market.
The French company Melvita is also focusing on concept stores, opening 15 retail stores in Asia since 2009. Neal’s Yard Remedies, a leading UK brand, has high market share in Japan with its 18 concept stores. Smaller brands like Apivita and Comvita are using concept stores as a springboard to enter the Asian market.
As consumer demand for natural and organic products continues to rise in Asia, Organic Monitor expects this development to continue. “The direct route gives many benefits; in the natural personal care industry, a major advantage is that it enables brand owners to educate consumers on natural and organic beauty products. Consumer education is vital in a market where greenwashing is common.”
Distribution will be a focal theme of the 2nd Asia-Pacific edition of the Sustainable Cosmetics Summit organised by Organic Monitor in Hong Kong on 12-13th November 2012.
