As the younger generation and women demand for more beauty and skin care products, the cosmetic industry is projected to grow rapidly, from US$380.2 billion in 2019 to an estimated $463.5 billion by 2027, according to Allied Market Research. The growing number of new market entrants competing in this market has spurred innovation in the industry. One such example is the trend of cosmetics companies offering more subscription services and experiential pop-up stores – revolutionising the buying experience for makeup buyers.
The COVID-19 pandemic has also created new growth opportunities for the e-commerce sector, driving more people to shop online more frequently. This permanent shift in buying behaviour has significant implications for the cosmetics industry in Malaysia. Businesses can no longer afford to rely solely on distributing their products via brick and mortar stores, but need to have a strong online presence.
How can cosmetic companies create such a presence and successfully market and sell online? How can local Malaysian businesses also increase their market share by expanding their offerings overseas? In this article, we provide a guide to local cosmetics businesses looking to expand overseas.
What products constitute the cosmetics industry?
Cosmetics are beauty and personal care products for hygiene and beautification purposes. Whilst many might assume that cosmetics are synonymous with make-up, several other products also fall under this category. Apart from beauty products for the face, lips, and eyes, cosmetics also include products for the hair and body:
Hair-related products: perfumes and shampoos
Body-related products: deodorants, shaving products, soaps, and lotions.
Malaysian cosmetics market size and potential
According to Statista, the Malaysian cosmetics market has been growing steadily, with the total revenue amounting to US$2.68 billion in 2022 and an expected annual growth rate of 4.07%. Another report by GlobalData revealed that the makeup sector is expected to have an annual growth rate of 5.8% from 2019 to 2024, followed by skin care and oral hygiene with annual growth rates of 5.6% and 5.4%, respectively.
The Malaysian beauty industry shows great potential as the growth of this industry is driven by the higher per capita income of citizens. The middle and upper classes demand beauty and personal care products, increasing the demand for affordable and high-quality cosmetic products.
Moreover, the demand for Malaysian cosmetic brands is increasing under the influence of advertising and social media influencers. With the boom of the e-commerce industry in Malaysia, whose revenue, revealed by GlobalData, amounted to US$7.1 billion in 2021 and is expected to reach US$13.8 billion in 2025, social media influencers and advice from fashion experts are driving the demand for cosmetics and toiletries, providing great opportunities for companies to enter this industry.
The global cosmetics market is also booming and is expected to reach US$415.29 billion by 2028, according to Fortune Business Insights, with a compound annual growth rate of 5.0% between 2021 and 2028. The United States is the largest importer of Malaysia's local skincare brands and other products, with Statista projecting sales to hit US$87.99 billion by the end of 2022. The United States offers great potential for local Malaysian cosmetic brands to expand their operations abroad and generate revenue. Besides the United States, France, Singapore, Indonesia, Japan, Hong Kong, and Thailand are popular destinations for Malaysian cosmetics brands to export and expand overseas.
Start an online cosmetics business today
The growing global cosmetics market offers lucrative opportunities for Malaysian manufacturers and suppliers to expand their business operations into foreign shores. By starting a new cosmetics business in Malaysia, you can capitalise on burgeoning global trends and offer products that meet international demand.
Or if you’re adding a new line of cosmetics to an already established business, it can mean gaining new customers and increased profits. To ensure your business remains competitive in today’s age, it is key that you offer your products online and consider expanding your global target market and exporting overseas. Find out how you can set up your online store, and how to use social media platforms to reach your target audiences.
