China and ASEAN drive the market
“The largest market is in China,” highlights Organic Monitor. “In spite of many green brands boycotting the Chinese market, it remains the most prominent in Asia. High-end brands are coming into the Chinese market, attracted to the rising purchasing power of its consumers. Japan has the second largest market for natural and organic cosmetics in Asia.”
With a broader definition of natural and organic cosmetics, Future Market Insights values sales of these products in ASEAN countries  only to 2.5 billion U.S. dollars in 2014 and expects it to reach 4,4 billion U.S. dollars by 2020, reflecting a CAGR  of 9.5%, according to. “The ASEAN organic cosmetics market is expected to account for nearly 6.6% of the global organic cosmetics market by 2020,” says the company in a recent report .
Thailand and Indonesia, accounted for 53.8% of the ASEAN natural and organic cosmetics market in 2014. Thailand is expected to dominate the overall ASEAN Organic cosmetics market, accounting for 29.3% market share by 2020. However, Singapore is expected to record highest CAGR 9.8% followed by Malaysia.
According to Organic Monitor, concept stores are the most important channel for natural and organic cosmetics. “Many brands - Western and Asian - are opening stand-alone stores or salons for their brands. The American company Aveda is the frontrunner, operating concept salons across Asia. A growing number of Asian brands, such as Forest Essentials, are also investing in concept stores to raise visibility and awareness of their product ranges,” explains the company.
In the ASEAN, the franchise outlet is expected to post double-digit growth and emerge as the dominating distribution channel for natural and organic cosmetic products. According to Future Market Insights, Department stores are predicted to hold second position in terms of CAGR.
As the market is taking off, Organic Monitor finds greenwashing a major challenge for natural and organic brands in Asia. “Asia is rife with brands making false natural / organic marketing claims, with some placing fake logos and symbols on product packs. As a consequence, there is a high level of consumer confusion about natural and organic cosmetic ingredients. Marketing is another major hurdle, with many brands not effectively communicating their green credentials,” points out Organic Monitor.
As a consequence, standards are becoming increasingly important, with a growing number of brands taking the certification route and many organic retailers requesting certification to ‘legitimise’ marketing claims of brands. According to Organic Monitor, Ecocert standards are the most popular, having the highest adoption rate amongst Asian brands.