Thailand’s C&T market is enjoying healthy growth fuelled by a strong economy and increasingly sophisticated consumers, including men who are proving to be a particularly lucrative market. Jonathan Dyson reports
Major new opportunities are emerging for both international and domestic cosmetics brands in Thailand, due to strong economic growth, increasingly sophisticated consumers and a vibrant market in which new products and innovations are leading to growing competition.
With 70 million consumers, the economy in Thailand is a key mid-sized and medium income market. It has recovered well from the severe floods in 2011 that affected much of the country, with GDP growth forecast at 5.7% for 2012.
As a result, disposable incomes are rising steadily and, combined with a range of societal changes, are helping drive demand for all types of cosmetic products.
The value of the beauty and personal care market in Thailand grew 8% in 2012, according to a recent report on the beauty and personal care market in Thailand by market research firm Euromonitor International. It forecast the market would reach THB164.7bn ($5.5bn) by 2016, representing a projected CAGR between 2011 and 2016 of 4.3%.
Ketmanee Lertkitcha, President of the Thai Cosmetic Manufacturers Association, tells SPC that the Thai personal care product industry is focused primarily on skin care and hair care ranges, and is focusing increasingly on the development of natural products. “There is strong interest in these types of products in Thailand and elsewhere, and due to the biodiversity in Thailand we can create a wide range of these products,” she explains.
Thailand is home to several herbaceous plants that are used for the production of cosmetics, in particular pueraria, a leguminous plant found in northern Thailand.
Lertkitcha says that sales of products such as creams, lotions and serums manufactured in Thailand using pueraria are growing fast. “Pueraria is proving especially popular for its anti-ageing qualities,” she says, adding that such products are particularly popular in Japan.
She says that moisturising effects are the key to the benefits offered by products using pueraria and other similar herbaceous plants found in Thailand. In addition to anti-ageing, other benefits include anti-acne, antiseptic and whitening.
The association’s President says that more research is being carried out in Thailand on the development of herb based cosmetics: “The government has been offering more support to the private sector and is encouraging Thai cosmetics manufacturers to develop their own brands. This has led to more research on developing new products and innovations, with different professionals working together.”
Lertkitcha adds that that the industry would also probably benefit from the ASEAN Economic Community (AEC), a liberalised common market of ASEAN countries to be established from 2015. “We are well prepared for the AEC,” she says. “Thailand has an advantage because it was the first ASEAN country to concentrate on GMP [good manufacturing practice] 20 years ago.”
She explains that as well as the greater opportunities to sell products to other ASEAN countries, the Thai industry will benefit from the upcoming harmonisation of laws within the AEC regarding the information that manufacturers are required to provide about each cosmetic product.
“According to the AEC directive, all cosmetic products will be classified as general cosmetics. This means manufacturing companies only have to provide the FDA [Thai Food and Drug Administration] with the address of the companies that have produced, assembled or imported the product. Currently, Thailand [companies] have to notify the FDA of the full details of the product before it is manufactured. This is due to the priority placed by the government on protecting the consumer, which has led to lots of different laws.”
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- Companies:
- Beiersdorf
- L'Oreal
- Colgate Palmolive
- Procter and Gamble
- Unilever
- Better Way (Thailand) Co Ltd
