Derma cosmetics, or cosmeceuticals, is continuing to gain prominence in APAC and becoming a key segment for retailers such as Watsons.
Watsons carries several leading derma skin care brands such as La Roche Posay, Vichy and Curél, it also has its own in-house derma brand, Skin Advanced.
“Derma cosmetics will continue to play a key role in the skin category at a double-digit year-on-year growth over the past few years and they are not showing any signs of slowing down,” said Susanna Yuen, head of exclusive brands, health & beauty Asia and Eastern Europe.
Yuen highlighted that derma cosmetic products had the potential to appeal to a wide demographic. In fact, Watsons has observed demand coming from more than one demographic.
She added that because “derma cosmetics is genderless”, it appealed to men who are becoming more interested in skin care.
“Men are stepping up to explore skincare and are seeking flawless skin. They are open to derma skincare products as they are effortless with strong product efficacy,”
A.S. Watson foresees that the category will continue to see optimistic growth due to several external factors including air pollution, UV damage or even blue-light damage.
According to Associate Professor Tey Hong Liang, head of research and senior consultant at the National Skin Centre (NSC) in Singapore, about 20% of children and 11% of adults in Singapore suffer from eczema.
Tey who is also the founder of sensitive skin brand Suubalm, believes this phenomenon is not just something we are seeing in Singapore, but globally.
Dr John O’Shea, co-founder of Suubalm owner, Good Pharma Dermatology, is confident the demand for derma beauty products will continue to grow as people with sensitive skin are starting to look into more sensitive skin-friendly options.
“Some retailers have told me that the category of products designed for sensitive skin is growing at 40% a year and we are seeing new companies entering this space.”
Suubalm is sold primarily in the SEA region, has sold more than 650,000 tubes since launching in 2015. The company told us it is aiming to surpass the one million mark by the end of this year.
After countless reports and speculation, Japanese cosmetics giant Shiseido announced in October 2019 that it was buying Drunk Elephant for $845m in one of the biggest acquisition stories of the year.
Shiseido’s decision to invest in brand marked its confidence in the growth of the clean category. In particular, it sees huge potential in China where it has observed “high acceptance” of the clean beauty movement.
In Singapore, bespoke ‘clean++’ skin care company Yours raised $3.5m in funding to scale and expand its business.
“The pace of innovation has always been fast in Asia’s beauty industry. Beauty consumers here are quick to try new formulations and ingredients, but always with one goal – effectiveness,” said CEO and co-founder Navneet Kaur.
“Coupled with ingredient and authenticity scares that have been rampant across Asia, it’s easy to see why clean beauty, with its ability to deliver results in safe, proven ways, appeal to consumers.”
Kaur said the shift in consumer behaviour and company priorities would continue to drive demand for clean beauty.
“There is a real consumer demand for quality skincare products that are good for the skin and for the environment. Today’s consumers are increasingly looking at their consumption footprint and consciously making choices that don’t harm the environment.”
Kaur believes the potentials for clean beauty is only in its infancy stage.
“We foresee regulations around clean beauty to ensure the same standards for clean beauty across Asia that customers can trust. By way of this legitimisation, the industry would also have the potential to really open up for rapid growth.”
In the era of inclusivity, Asian consumers increasingly want a voice in the products they consume. This has given a rise to more Asian ingredients in cosmetics.
“I believe that the biggest driver of this trend is rise of the new Asian middle class, who are eager to make their presence felt in the world,” said founder of Rooki Beauty, Hayley Teo.
She elaborated that while Asian consumers were “hungry for consumption”, they want products that resonate with them as well.
“Since food is a big part of the cultural fabric in Asia, it’s natural that Asian-centric ingredients have started to make an appearance in skin care too.”
Teo believes utilising Asian ingredients allow brands to create “the perfect combination of excitement and familiarity.”
“When ginseng was first introduced in skincare, it was novel but not alienating since people were already used to having it in their food and medicine. Some of these Asian-centric ingredients may even benefit from a halo effect, which can help boost their credibility as a skin care ingredient.”
Rooki Beauty utilises ingredients such as Japanese matcha from a family-owned organic farm in Kyoto. The Singapore-based brand launched in 2019 and has garnered plenty of interest globally.
“There has been lots of interest and momentum and it has been quite overwhelming actually. We’ve managed to work with retailers from Australia, Spain and Mexico,” said Teo.
In the future, consumers can expect more Asian ingredients to feature in Rooki Beauty products.
“Our new serums will also feature starfruit, a popular tropical fruit found in Southeast Asia, wakame, an edible seaweed with a long history in Japanese cuisine, and kudzu root… grown near Mount Yoshino and used by top wagashi masters in Japan,” said Teo.
Beyond ingredients, Teo is also exploring proprietary cosmetic technology created in Asia.
“The Japanese are experts at fermentation. It’s a big part of their diet, which is why you have foods like natto and miso. The fermentation process also creates all sorts of new beneficial substances, like amino acids, which can be really beneficial for the skin,” she said.
Moving forward, Teo believes we will continue to see more Asian ingredients in beauty products.
“Many of the top cosmetic labs today are found in Asia. One of the ways they stand out is by investing heavily in ingredients that are indigenous to their country. You don’t have to look far to see examples of that already - there’s a reason why ingredients like volcanic clay from Jeju and horse oil from Hokkaido are big in skin care.”
While fragrance has traditionally been a luxury game, Wipro Consumer Care believes there is a huge demand for more affordable mass fragrances.
“Mass fragrances is a category that we believe will become much bigger in an Asian context. There’s not a lot of MNC players are in the mass fragrance space but there is a clear need that we are seeing from the consumer,” said Deepak Chandran, CFO, international business, Wipro.
The firm first saw potential in this space after observing consumers using deodorant as a proxy for perfume. This behaviour inspired the company to create what it calls pocket perfumes for its existing fragrance brands, Dashing and Enchanteur around three years ago.
“We believe that convenience really drives usage. Typically, the application of fragrance is once either in the morning or evening. But we built a product that can be carried in your pocket, wallet or purse and you can use it anytime you want,” said Chandran.
The launch of these mini eau de toilettes have proven to be very popular with consumers as it suited their urban and time-poor lifestyles. The success of pocket perfumes has prompted the company to extend the format to its other brands.
Currently, Dashing Pocket Perfume sales account for 19% of the brand’s total fragrance sales and is available Malaysia.
Enchanteur Handbag Perfumes, on the other hand, are available in Malaysia, India, Middle East, Vietnam. The company also has plans to expand the line into China.
Similarly, French fragrance company Corania Parfums is also looking to China to drive future growth. The family-owned business has several perfume brands in its portfolio, including Solinotes, Bonjour De Paris and Parfums Arno Sorel.
President Laurent Cohen believes the industry will continue to see more Chinese consumers adopt the use of wearing perfumes.
“Perfumes are part of self-expression. It showcases your personality, like your smile or your clothes. I believe Chinese consumers are aware of that and more will be aware soon. We believe the ritual of wearing perfume is very European. We know that Chinese love the French rituals and we think they will come to love our perfumes.”
The manufacturer expanded into China less than a year ago through cross-border e-commerce channels and will actively look to expand offline as well.
“For 2020, we believe the key for us is China. So, we will be very focused on that market. We are very excited to share our passion and expertise in perfumes with China,” said Cohen.
Microbiome skin care
In 2019, we saw a few microbiome-targeted brands entering the Asian market. In February, probiotics skin care brand Gallinée made its Asian debut through Sephora SEA.
Later in the year, AOBiome, launched AO+ Skincare, a based on its own probiotic beauty brand, Mother Dirt, for the Chinese market.
Asian consumers are no stranger to probiotics. Thanks to probiotic drink brand Yakult, millions of Asian children have grown up understanding its importance and its role in gut health. However, there is still little awareness of the skin microbiota.
“It’s interesting that the Asian market is not big on microbiome skin care yet because it’s the number one market for probiotics in food... No one has ever heard of the microbiome. To them it’s a new concept,” said Gallinée founder Marie Drago.
However, Minnie Ang, co-founder of newly launched probiotic brand Souffle Beauty, believes awareness of probiotics and microbiome in skin care is growing.
“[Asians] are no strangers to fermented foods and drinks and vegetables like kimchi. Many also take probiotics in a supplement form. It is therefore just an expanded benefit and a new application of an already familiar ingredient.”
Shanshan Liu, head of marketing for AOBiome Cosmetics shares Ang’s sentiments, adding that she has observed global brands like Lancôme have begun highlighting probiotics and microbiome in their marketing.
The budding awareness for microbiome made it the right time for the company to expand in China, said Liu.
“The aim of our products is to balance the skin microbiome. When people hear about this, they are curious and interested to try our products. The Chinese market is a mature market now, I believe, and our concept is new to them and very competitive,” said Liu.
Ang believes microbiome beauty will continue to play an important role in the beauty industry.
“In the years to come there will be a lot more brands that are going to jump on the bandwagon of microbiome skincare. With more brands in the market, consumers will also get better educated about the benefits. In the long run, science will play a crucial role in the evolution of the industry as we unveil more about the individuality and function of microbiome.”