The Asia natural and organic beauty market is growing fast, reports analyst Ecovia Intelligence in this special commentary.
The recent acquisition of New Zealand natural beauty brand Trilogy reflects the growing importance of Asia in the global market for natural and organic cosmetics. CITIC Capital China Partners, a Hong Kong-based private equity firm, has paid US $211 million for the New Zealand-based company. Trilogy is the leading natural skincare brand in its home country, and has a significant footprint in Asia and the US.
Ecovia Intelligence believes a major motive for the purchase is expansion in the fast-growing Asian market. Natural and organic cosmetic sales in Asia increased by 21% last year, compared to single digits in Europe and North America. Asia has high growth potential, considering the market share of total cosmetics remains below 1% in almost all country markets.
John Masters Organics, a leading American organic personal care brand, was purchased by a UK investment firm mainly because of its strong presence in Asia. It was acquired, along with its Japanese distributor, for US $336 million two years ago. Chinese companies have also purchased European brands of natural cosmetics to expand in the Asian market.
Demand for natural and organic cosmetics has taken off in Asia as consumers become more aware of synthetic chemicals in cosmetics and toiletries. Following the trend in Europe and North America, investment is now pouring into the Asian market.
Ecovia Intelligence predicts the highest growth in the Chinese and Indian markets. China is already the number one Asian market for some Western brands. It represents over half of Asian sales of Jurlique, the leading Australian natural cosmetics brand. L’Occitane has just announced that China is now the second largest market for its natural-based cosmetic products.
As will be presented at upcoming Ecovia Intelligence events, distribution is a major challenge for natural & organic cosmetic brands in Asia. It does not have the same distribution infrastructure for natural & organic products as Western markets. Thus, many brands are taking the direct route and opening concept stores. Some, such as the Indian organic cosmetics firm Azafran Innovacion are focusing on building distribution networks. It has an aggressive plan to expand its retail outlets from 1,500 to 10,000 this year.
Multinationals are also looking to expand their presence in the Asian market. P&G acquired the Snowberry brand of natural skincare products a few months ago. Unilever has purchased a brace of natural personal care brands in the last few years; they include Schmidt’s Naturals, Sundial Brands, REN Skincare, as well as Seventh Generation. It has also made investments in True Botanicals and Gallinée. Ecovia Intelligence expects the multinationals to utilise their distribution networks to introduce some of these brands in Asia.
Standards are another major challenge for the Asian and global market for natural and organic cosmetics. COSMOS and NaTrue are now established in Europe, however adoption rates in North America and Asia remain low. Ecovia Intelligence finds that certified products represent less than 10 percent of natural & organic cosmetics in North America.
New ethical labelling schemes are gaining traction. In Europe, vegan and fair trade labels are now established on cosmetics and personal care products. In the US, Burt’s Bees has moved away from the NPA natural standard, opting for the National Eczema Association seal of acceptance for its Sensitive skin care line. AllergyCertified launched its Skin Allergy Certified standard in 2013, and now has over 450 certified products. The Made Safe and Environmental Working Group (EWG) Verified Program are also becoming popular. The latter has 1,286 certified personal care products.
As consumers increasingly looking for certified products, it is highly likely that some of these new labelling schemes will gain popularity in Asia. With growing proliferation in standards and labelling schemes, a major decision for brands, is not which ones, but how many to adopt.
Standards & ethical labels, Asian growth potential, as well as an update on the global market for natural & organic cosmetics, will be given in these upcoming events organised by Ecovia Intelligence:
Sustainable Cosmetics Summit North America Sustainable Cosmetics Summit Latin America Natural Cosmetics Masterclass: Ethical Labels Sustainable Cosmetics Summit Asia-Pacific
About the Sustainable Cosmetics Summit
16-18 May, New York
25-27 June, São Paulo
11 July, London
12-13 November, Hong Kong
Since 2009, the Sustainable Cosmetics Summit has been covering sustainability issues in the cosmetic & personal care industry. The North American edition will be hosted at the Park Central New York on 16-18th May, Latin American edition at the Pullman São Paulo Ibirapuera on 25-27th June, whilst the Asia-Pacific edition will take place in Hong Kong on 12-13th November. More details are on www.sustainablecosmeticssummit.com
About the Natural Cosmetics Masterclass
Organised by Ecovia Intelligence, the Natural Cosmetics Masterclass (Future Direction of Ethical Labels) will take place at Regent’s University London on 11th July 2018. More details on the Natural Cosmetics Masterclass is on http://www.ecoviaint.com/masterclass18
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