You’re probably already aware that the beauty industry is booming in China. Before the pandemic, China saw an average of about 7% growth year over year. These are pre-COVID years. The pandemic has disrupted that growth in 2020, but there are good indicators for the future.

While China is certainly leading the way in Asia for cosmetics, beauty brands and investors should pay close attention to other Asian markets, too.

Interest in and access to mass and prestige beauty products are on the rise across the continent. The industry is poised for rapid growth in these markets and will likely see an uptick in sales on both traditionally Eastern products like skincare and predominantly Western beauty products like makeup and fragrances.

Opportunities by Market

Demand for beauty products is growing across Asia, with one notable exception: Japan.

In past years, Japan benefited from a lot of inbound tourists coming from China, Korea, and Taiwan who helped domestic beauty sales, and its industry was growing second to China. That trend is decelerating. At the same time, the Japanese population is aging, leaving the market quasi-flat. Japanese brands and companies should thus look at other markets to create growth.

Fortunately, they have quite a few other opportunities to pursue.

Cultural Emphasis on Beauty in Korea

Korea is a competitive market, growing 4% on average. That’s because beauty is a way of living for Korean people, and consumers are very beauty conscious.

This unique view on beauty has led a lot of Korean brands to start competing with Japanese brands in Asia and trying to take market share.

As for the breakdown between prestige and mass, Korea is pretty evenly distributed. The prestige market is about half of the market and mass is the other half.

Demand for Prestige in Taiwan

Although many people compare Taiwan to China in terms of beauty trends, it’s actually much more similar to Japan. The Japanese influence on Taiwan has been huge in terms of consumer goods in general.

Like Japan, it’s a mature market with an aging population, but in Taiwan, the beauty industry is still growing at an average of 5%. The prestige side of the industry leads at 60%, with mass products taking the other 40% of market share.

A Young Population and Rising Middle Class in Southeast Asia

The beauty industry in Southeast Asia is growing at double digits, creating a new engine of growth that will be second only to China in the near future. This is due to the fact that the population is generally young. There is also a rising middle class in a population of close to 600 million people.

There’s a lot of potential in this region for any brand in the future, but the prestige market is still small, due to the region’s income distribution. As middle incomes rise, however, we can expect the prestige pie to do the same.

Increased Access to Beauty Products in India

Beauty in India is still a small market compared with the country’s population, but the industry is growing by an average of 11%.

Mass beauty products have a bigger opportunity here than prestige. The bulk of the population still has a very low income and cannot afford prestige products. But, with infrastructure improving throughout the country, there has been a rise in both beauty stores and e-commerce opportunities that are driving consumption in the mass beauty category.

Western Influence in Oceania

Oceania is a very different cluster. A lot of inbound tourists from China have been impacting the market, but in terms of structure and needs, it has more influence from the U.S. and Europe than Asia.

Opportunities for prestige and mass are well balanced between Oceania’s mixed Caucasian and Asian population. On the whole, the beauty industry is growing 5% on average in the Oceania market.

Growth in New Categories

Asia is a skin-care-driven market. Although skincare will likely remain the largest category, Asia is seeing growing interest in makeup and fragrances as well.

Makeup has been growing significantly among young consumers in the past years, driven by makeup artist brands (e.g., Laura Mercier) and fashion brands (Dior, Yves Saint Laurent, Chanel, etc.). That trend is expected to continue as consumers gain new access to luxury products.

Fragrances have shown a glimmer of hope. Historically, fragrances have been a very small segment, particularly compared with Europe. But recently, Asia has seen some success stories. Sales for Jo Malon, a British brand owned by the Estée Lauder group in Asia, have increased significantly, for example.

Ultimately, fragrances have never been a habit for the Asian market. But if that changes, there would be an explosion of growth across the region.

A Safe Bet for Beauty Brands

Growth in Asian markets is expected for beauty brands after the dust settles on COVID-19. Mass will lead the way, but opportunities for prestige products are on the rise, too. Cosmetics companies should take heed and look to Asia for their next chapter of growth.

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About Jean-Philippe Charrier

Jean-Philippe Charrier is currently self-employed at SprintAsia Pte. Ltd., which he founded. Previously, he worked with Shiseido Corporation for 10 years, holding various titles including General Manager Asia-Pacific, General Manager Global Marketing, Global Chief Officer in charge of Professional Operations Division, and President and CEO. Previously, Jean-Philippe worked at L’Oreal, holding various leadership positions.

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This beauty industry article is adapted from the November 24, 2020, Video Visit “Mass & Prestige Beauty Gains in APAC.” If you would like access to the transcript for this event or would like to speak with beauty industry experts like Jean-Philippe Charrier or any of our more than 900,000 industry experts, contact us.