The inauguration, last month, at the Jababeka Industrial Estate, West Java, Indonesia, around 60 kilometers east of Jakarta, of what is to date the largest L’Oréal plant in the world, has focused attention on the beauty market in Indonesia.
With an increasing proportion of households belonging to the middle class, the consumption is beginning to go beyond basic needs. Also stimulated by a relatively young population and the rapid urbanization, the demand for cosmetic products has grown by an average annual growth of 10 - 11%. In 2011, the cosmetics market was valued at nearly 1.6 billion euros .
Indonesia is therefore a cornerstone of L’Oréal’s strategy to attract a billion new consumers by 2020.
A fast changing market
Despite a long tradition of beauty rituals, some of which are still perpetuated in a more or less modernized form, the younger generation is very sensitive to new beauty criteria: slenderness and a very fair complexion are considered as signs of modernity.
“It has become very important to have a fair, luminous complexion and many young women use lightening creams. They are eager for innovation and novelty and are prepared to experiment with different hair and skin care products,” explains L’Oréal.
However, the overall use of cosmetic products, of all categories, is spreading rapidly within the Indonesian population, leading to the development of a strong cosmetic industry. There would be some 700 cosmetics companies in the country, and would have recorded an average production growth of 12.5% between 2003 and 2007.
Concerning the L’Oreal group, which has been present in Indonesia since 1979, it currently records over 39% market growth. In particular, L’Oreal succeed in becoming the leader in men’s cosmetics. “The latest brand launches have met with great success: with 11.9 million units sold since the start of 2012 the Garnier Men line topped sales win barely a year,” details the company.
With 15 brands distributed in the country, L’Oréal is present in all distribution channels: from hair salons and beauty institutes to traditional shops, and from mass retail to selective channels.