Indonesia Cosmetic Market: The New NOW

Indonesia Cosmetic Market
The New NOW

Asia One Cosmetic and Beauty Forum,
Grand Hyatt Jakarta
Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
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2
Indonesia Beauty Boom
Growing Purchase Power

Young population
Urbanization
Copyright © 2015 The Nielsen Company. Confidential and proprietary.
Digital
Retail network
3
Source: Standard Chartered

2030 world top ten economy
4
Higher income and purchase power
High income
Upper middle
income
Lower middle
income
Loweincome
5
Bigger and faster Indonesia
2005 2015 2025

Size economy US$ 0.7 Trillion US$ 1 Trillion US$ 2 Trillion ++
Consumer market US$ 0.3 Trillion US$ 0.6 Trillion US$ 1.5 Trillion
GDP per capita US$ 1500 US$ 4000 US$ 9000
Urban population
43% 50% 68%
Source: World Bank,McKinsey

6 6
Evolution of the market
Traditional
store Supermarket Hypermarket Minimarket Convenient Specialist Online
Supply driven Market driven Imagination driven

Break
USD
9000
68%
Break
Break USD
= Urban Population USD 4000
52%
Break 3000
USD 2000 49.8%
Break 44%
42% USD 1000
30%
86 87 88 89 90 91 92 93 94 95 96 97 98 99 '01 '02 '03 '04 '05 '06 '07 '08 '09 10 11 12 13 14 15 20 25
Yearly GDP per capita Source: BPS, World Bank7

Era of consumer power
WAVE 1 WAVE 2 WAVE 3

PRODUCER POWER ECONOMIC GROWTH TRANSFORMATION
PRODUCTION DRIVEN MARKETING-DISTRIBUTION DRIVEN

• Battle for market share
• Instant, unlimited selection
• Demand Experience
• Custom over mega brands

• Immediate availability
• Novelty
• Community interest
CONSUMER POWER
8
Bonus young demography
9
Over 60% is under 40years old
10
INDONESIA annual pace +4 %
One of the most rapidly urbanizing countries in the world.
By 2025 : 68 percent
vs 52 percent in 2012 (according to UN projections).
11
Source : WB
Source: Mc Kinsey
Next growth destination:
secondary, tertiary, out java area
12
in 2020 MAC Sumatra bigger than Thailand ;
MAC Java bigger than Malaysia+ Singapore
Purchase goods beyond basic needs (during 2020-2030) is the

biggest in the world- a part for China and India.
13 13
Healthy
Convenient
Feeling good
Looking good
+ Affordable Premium
Beauty mega trends
14
Soekarno
Soeharto
Soesilo
Indonesia revolution heroes
Soe-kerberg
15
Increasing smartphone penetration
16
17
WHAT WE ARE SEEING IS A
TRANSFORMATION OF TRUST…
OLDER GENERATIONS MILLENNIALS
SEE
TOUCH
FEEL
RATINGS & REVIEWS

INFO FROM SHOPKEEPERS OFFLINE STORES
INFO FROM SOCIAL CIRCLE
18
THE DIFFERENCE...
WINDOW SHOPPING SCROLL SHOPPING
OLDER GENERATION
RELISH THE EXPERIENCE

MILLENNIALS
CONSTANT & INSTANT
19
THE DIFFERENCE...
BARGAIN SEEKING COMPARING SITES & APPS
OLDER GENERATION MILLENNIALS
COMPARING SHOP TO SHOP BORDERLESS COMPARISONS
20
THE DIFFERENCE...
TREASURE HUNTING CHAT FORUMS & SOCIAL MEDIA
OLDER GENERATION MILLENNIALS
COMPARING SHOP TO SHOP GLOBAL SEARCH
21
Digital = Pressure
22
Nielsen – Beauty Update

23
TOP eye items
Maybelline Magnum Barbie Wardah Eye Brow Pencil Brown

+84.5% +467%
Wardah EyeXpert Optimum Hi-Black Liner
+154%
Nielsen – Beauty Update 24
HARUMI
MyTipsCantik.com
25
minyo33.com
MINYO
26
Beauty Retail network
27
OPENING STORES
Personal Care Key Accounts | Store Numbers up to W4317 (October 2017)

349
318
246 253
102 108 109 106 113 105

80 72
53 60
43 46
Y14 Y15 Y16 Y17 Y14 Y15 Y16 Y17 Y14 Y15 Y16 Y17 Y14 Y15 Y16 Y17
28
SKINCARE, COSMETICS & FACIAL RELATED CATEGORIES
GREW DOUBLE DIGIT IN PERSONAL CARE STORES
Personal Care in PC KA |Top 10 Categories Personal Care | Channel Growth YA | YTD October 2017
78.4
30.0
Skincare
Cosmetics 57.6 57.8
Toilet Soap
Shampoo 38.0
Hair Conditioning 21.5 26.2

Face Powder 15.2 12.9
Cologne 4.9
4.4
8.1
Baby Oil
Face Mask 5.9
Sanitary Napkin 4.6

4.1
3.8 -23.2
3.0
Skincare Cosmetics Soap Shampoo Hair Cond Face Cologne Baby Oil Face Mask San Napkin
Powder

CATEGORY OPPORTUNITY MAPPING
CORE THE LITTLE NEXT MUST HAVE

BUSINESS BIG THING • Cologne

• Skin Care • Hair Coloring • Toilet Soap
• Cosmetic • Face Mask • Shampoo
• Face Powder • Foundation • Hair Conditioning
Way to grow :
 Store expansion
Way to grow further : Way to grow :  Effective Assortment
 Seek opportunity  Leveraging promotion
and trend from
other channel, eg
GT
30
PTI, MAYBELLINE, AND L’OREAL GREW FANTASTICALLY
Top 20 Suppliers in PC KA | Skincare & Cosmetics | Value Contributions & Value Growth | YTD Oct 2017
Rank Manufacturers Contributions Value % Chg YA

1 Paragon Technology and Innovation 12.4 132.2
2 Maybelline Inc 6.2 30.3
3 L'Oreal 2.9 36.2
4 Unilever 2.6 20.5

5 Dermanesia 2.4 50.3
6 Beiersdorf 2.2 54.5
7 Banana Boat 2.2 22.8
8 Laboratoires Sarbec 1.7 62.1
9 Gloria Origita Cosmetic 1.6 9.9
10 Alliance Cosmetics Sdn Bhd 1.2 52.1
11 Cosnova 1.0 1,453.7
12 Procter And Gamble 1.0 2.4
13 Seba Farma 0.8 -2.9
14 Rudy Soetady&co 0.7 18.4
15 Rohto Laboratories Indonesia 0.7 46.7
16 Darya Varia Lab 0.6 52.7
17 Vitapharm 0.5 17.4
18 Mandom Indonesia Tbk 0.4 168.0
19 Lab Dermatologiques Avene 0.3 31.3
20 Kao 0.3 56.9
32
Cleansers are #1 performer in skincare
Skincare by Segment | Value Contributions & Value Growth YA | PC KA | YTD October 2017
57.3%
39.1%
Hand And
Body 37.1%
Moisturizer
32.9%
Cleanser 19.3%
27.9%
Cleanser Moisturizer Hand And Body

Cetaphil: the king for cleansers
micellar water, non fragrance
Cleansers | Top 5 Brands | Value Contributions & Value Growth YA | PC KA | YTD October 2017
16.8%
199.4%
Bioderma
16.8%
Cetaphil 159.3%
8.8%
Garnier
7.8%
Wardah
100.3%
6.8%
Corine De
Farme 44.9%
36.1%
Others
43.0%
Bioderma Cetaphil Garnier Wardah Corine De Farme

Sun protection dominates, but soft skin grows
Hand & Body Lotion | Top 5 Brands | Value Contributions & Value Growth YA | PC KA | YTD October 2017
25.5 26.2 137%

Banana Boat
12.6 Nivea
16.8
9.1 Vaseline
3.8 12.2
1.5 Corine De 58% 60%
4.6 Farme
3.0 46%
Cetaphil
Others
23%
48
37
Banana Boat Nivea Vaseline Corine De Farme Cetaphil

Nivea: beauty influencers’
power influence
Nivea collaborated with two key influencers: Bubah Alfian and Lizzie Parra

Then Color it
37
GROWTH
YTD 16 YTD 17
%
LIPS
LIPS 47.2 50.1 89.1
cosmetics
now #1 EYE 46.1 40.6 57.1

choice
Cosmetics in PC KA
BLUSH 4.3 8.4 243.5
/CONCEALER
NAILS 2.3 1.0 -25.8

38
Lipstick dominates
Lipstick grew significantly as it is the easiest applicable cosmetics and various brands available
Lip Cosmetics Segments | Value Contributions & Value Growth YA | PC KA | YTD October 2017
105.5
Stick 55.7
82.0 Balm/Salve
89.1 Tinted
Gloss 18.5
Liners
-27.8
15.1
9.5 Stick Balm/Salve Tinted Gloss Liners

Wardah, Make over, and Emina still the
leader
Lipsticks | Top 10 Brands | Value Contributions & Value Growth YA by Brands | PC KA vs Boston| YTD September 2017
Wardah
1287.7%
35% Purbasari
Make Over
Maybelline 801.2%
Silky Girl
Emina
15%
Revlon 238.4%
280.0%
9% Fran Wilson 174.3%

78.5%
Nivea 12.8% 20.5% 19.6%
8% Pixy -2.8%
5%
3%
3%
3%
2%
2%
“Ngalis dulu ya”: eyebrows are important
Eyebrows are growing significantly compared to other eye makeups
Eye Makeup Segments | Value Contributions & Value Growth YA | PC KA | YTD October 2017
169.0
37.9 34.6
Liners
Mascara
99.8
Brow
33.9 Shadow
34.1 60.7
56.0 54.6
Cosmetic Multi 43.3
Use Products
Decoration
13.9 17.7
13.8 13.5 Liners Mascara Brow Shadow Multi Use Decoration

SELEBGRAM: THE INFLUENCERS
42
FROM BEAUTY FAN TO BEAUTY PRODUCERS
BLP Beauty By Lizzie Parra
Bylizzieparra
139k followers

STELLA LEE Starry lights:
False lashes & Magic eyetape Japanese Makeup
Stella Lee specializes in Japanese Makeup Reviews
StellaLee92
46k followers

SASYACHI: K-beauty influencer Korean Makeup
Sasyachi
74.8k followers TRESemme Vaseline
HELLUA: The lipstick mafia
Thelipstickmafiaaa
97.2k followers
Revlon Rollover Reaction
THE HEAVYWEIGHTS INFLUENCERS
abellyc
427k followers
bubahalfian
472k followers
alodita
220k followers

HIJABER BEAUTY INFLUENCERS
cherylraissa itsirnadewi pupututami Firrrr_

98.9k followers 59.1k followers 25.9k followers 186k followers

THE RISING LOCAL BRANDS
With local Key Opinion Leaders as their ambassadors, these local brands see rising awareness
Rollover Reaction By Lizzie Para Polka

Makeover

28 – 30 NOVEMBER 2017
INDO BEAUTY EXPO

50
BITE LIP LAB: Personalized beauty

51

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Indonesia Cosmetic Market

The New NOW

Growing Purchase Power

Source: Standard Chartered

2005 2015 2025

Source: World Bank,McKinsey

Supply driven Market driven Imagination driven

86 87 88 89 90 91 92 93 94 95 96 97 98 99 '01 '02 '03 '04 '05 '06 '07 '08 '09 10 11 12 13 14 15 20 25

Yearly GDP per capita Source: BPS, World Bank7

WAVE 1 WAVE 2 WAVE 3

PRODUCTION DRIVEN MARKETING-DISTRIBUTION DRIVEN

• Custom over mega brands

Bonus young demography

Over 60% is under 40years old

Purchase goods beyond basic needs (during 2020-2030) is the

Increasing smartphone penetration

RATINGS & REVIEWS

INFO FROM SOCIAL CIRCLE

RELISH THE EXPERIENCE

CONSTANT & INSTANT

OLDER GENERATION MILLENNIALS

COMPARING SHOP TO SHOP BORDERLESS COMPARISONS

OLDER GENERATION MILLENNIALS

COMPARING SHOP TO SHOP GLOBAL SEARCH

Nielsen – Beauty Update

Maybelline Magnum Barbie Wardah Eye Brow Pencil Brown

Beauty Retail network

Personal Care Key Accounts | Store Numbers up to W4317 (October 2017)

102 108 109 106 113 105

Hair Conditioning 21.5 26.2

Sanitary Napkin 4.6

Nielsen – Beauty Update 29

CORE THE LITTLE NEXT MUST HAVE

BUSINESS BIG THING • Cologne

Rank Manufacturers Contributions Value % Chg YA

4 Unilever 2.6 20.5

Cleanser Moisturizer Hand And Body

Nielsen – Beauty Update 33

Bioderma Cetaphil Garnier Wardah Corine De Farme

Nielsen – Beauty Update 34

25.5 26.2 137%

Banana Boat Nivea Vaseline Corine De Farme Cetaphil

Nielsen – Beauty Update 35

Nielsen – Beauty Update 36

now #1 EYE 46.1 40.6 57.1

NAILS 2.3 1.0 -25.8

Nielsen – Beauty Update 39

9% Fran Wilson 174.3%

13.8 13.5 Liners Mascara Brow Shadow Multi Use Decoration

Nielsen – Beauty Update 41

SELEBGRAM: THE INFLUENCERS

Nielsen – Beauty Update 43

Nielsen – Beauty Update 44

Nielsen – Beauty Update 47

cherylraissa itsirnadewi pupututami Firrrr_

Nielsen – Beauty Update 48

Rollover Reaction By Lizzie Para Polka

Nielsen – Beauty Update 49