Over the last decade, more than 26 million Malaysians have gained access to the internet, with 80 percent of users 1 between the ages of 16 and 64 shopping online. Malaysia’s cosmetics market grew by 6% in 2018, reaching MYR1.1 billion, ranking fifth in the world2 in terms of eCommerce growth rates.
We’ll look at three of the biggest trends in Malaysia’s eCommerce cosmetics market, as well as how you can capitalize on them, with a focus on market changes and consumer demands. We’ll also look at successful brands and what they’ve done to keep a strong consumer base in one of Southeast Asia’s largest economies. But first, having a general understanding of Malaysia’s cosmetics eCommerce market is always beneficial.
Overview of Malaysia’s Cosmetics eCommerce Market
Online shopping, like its neighboring counterparts, has made international brands more accessible to Malaysians, which they enjoy. Furthermore, Malaysia has the third-highest GDP per capita among ASEAN countries. As a result, this Southeast Asian ‘Tiger Cub’ economy is a popular choice for eCommerce merchants looking to gain market share.
Furthermore, eCommerce spending increased by 24% in 2018, and with the government making the growth of the online economy a national priority, Malaysia is likely to continue to enjoy strong growth in online shopping in the coming years.
While the average unit price of cosmetics remained stable in most categories in 2018, L’Oréal maintained its lead in cosmetics with a 23 percent value share in 2018. Cosmetics are expected to grow at a 7% annual rate over the next few years, reaching MYR1.5 billion in 2023.
With a growing number of younger Malaysians exposed to international travel experiences, there will be more consumers interested in trying out foreign brands they come across while traveling. This is likely to result in a greater number of international players entering Malaysia’s competitive landscape in the mass cosmetics market.
Furthermore, consumers who choose mass cosmetics are more price-conscious, making them more likely to buy during sales periods7 or during any type of promotion. As a result, promotional pricing will continue to be an important marketing tactic for you to compete in order to stand out from the increasing competition.
Maybelline (13.7 percent), Mary Kay (8.1 percent), and Silkygirl are among the largest existing brands in the Malaysian cosmetics market7 (6.1 percent ). When we look specifically at premium cosmetics brands, we can see that Mac (8.4 percent), Estee Lauder (8.3 percent), and Artistry (6.2 percent) have the highest market share.
What are the three key consumer trends driving Malaysia’s eCommerce cosmetics market?
Malaysians who are always on the go are increasingly looking for unique packaging and packaging features that provide convenience.
According to the work-life index published by technology company Kisi, Kuala Lumpur has the worst overall work-life balance among the world’s 40 major cities. Other Asian cities fared poorly as well, with Singapore, Hong Kong, and Tokyo ranking 32nd, 35th, and 39th, respectively.
With an increasing number of Malaysians leading active and busy lifestyles, more cosmetics consumers are looking for smaller packaging sizes and squeezable tubes that are easy to transport when traveling.
Euromonitor predicts that smaller-sized squeezable plastic tubes9 and rigid plastic containers with unique closures will continue to pique consumer interest. This is primarily due to Malaysian consumers’ increasingly hectic lifestyles, which call for products that can be carried around with them and easily applied.
Furthermore, unique packaging design remains an important distinguishing factor for cosmetics players to remain competitive. Maybelline Master Flush Stick, for example, was launched with a unique packaging design that allows for easier application. The blusher is combined with a soft sponge applicator on two ends of the blusher, eliminating the need to carry both the blusher and the sponge separately for application.
Cosmetics that can help with skincare, as well as appearances, are gaining traction in the market
Consumers are increasingly interested in cosmetics with skincare benefits because they are both cost-effective and time-saving. Furthermore, with the emergence of more sophisticated consumers all over the world, there is undoubtedly a greater demand for products that offer more benefits than just makeup.
Sulwhasoo Perfecting Cushion EX, for example, is a sheer, long-lasting gel cushion infused with sea buckthorn berries. This antioxidant-rich ingredient provides skincare benefits such as a radiant complexion.
The changing air quality in Malaysia has led to an increase in demand for anti-pollution skincare to prevent further damage to their skin as a result of rapid urbanization. Different color cosmetics with features such as promoting a flawless finish and anti-pollution are also expected to pique the interest of Malaysian consumers.
Furthermore, because Malaysia has a tropical climate with sunny days all year, locals are exposed to a lot of sunlight. Certain K-Beauty brands, such as Etude House, have incorporated sunscreen into their foundation or other cosmetics products in order to draw customers in with the two-in-one feature of their products.
Because many of these multi-purpose cosmetics products are from newer Korean brands, it demonstrates the importance of innovation in remaining relevant to your consumers, even as a foreign brand. When asked why Malaysians are drawn to using Korean beauty products, 54 percent said that the K-Beauty products are better suited to their skin. In addition, 48% believe that K-Beauty products are more effective and produce better results than other products.
Halal cosmetics are becoming increasingly popular among Malaysian Muslims
While there are numerous cosmetic brands on the market, Muslim women who prefer halal cosmetics used to have few options. According to a 2016 report on the Ministry of International Trade and Industry website, halal cosmetics and personal care products have emerged as Malaysia’s fastest-growing consumer segment14 (MITI).
According to the Halal Industry Development Corporation (HDC), there are currently over 100 certified halal cosmetics and personal care companies. Among the brands forging paths in halal beauty are Amara Halal Cosmetics (USA), Inika Organics (UK), Talent Cosmetics (South Korea), Tuesday In Love (Canada), Momohime Skincare (Japan), and Wardah Cosmetics (Indonesia).
This rising demand for halal products is also evident in other industry sectors, such as modest wear fashion, and skincare. According to a survey conducted to understand perceptions of cosmetics products Malaysia’s cosmetic in Malaysia, all Muslim participants had a positive perception of halal certification. Muslim participants also discovered that it is critical for Muslim consumers to consider whether or not a cosmetics product is halal before purchasing.
Furthermore, beauty was the third-most-searched topic on Google in 2016, and the number of views of beauty videos on YouTube increased by 67% between 2015 and 2016. Cosmetics products are particularly appealing to the selfie generation due to their visual nature, with over 1.5 million beauty videos (accounting for 4.6 billion views) uploaded each month on YouTube.
Challenger brands have created a new way of marketing by directly engaging with consumers—mostly millennials via social media rather than traditional advertising. It is more than just a transaction; it is about building a relationship.
To summarize, you may be able to better appeal to your target segment by understanding who, what, and how your potential customers in Malaysia’s cosmetics market shop online. While Malaysia may appear to be a saturated market with many strong foreign brands, the cosmetics market is still a growing one with many opportunities for newer merchants to enter, especially if you can meet local demand as several K-Beauty brands have proven.