The Philippines is now viewed as a good market for Thai cosmetics, beyond that of neighboring countries, thanks to rising purchasing power within its middle-class population and due to changing lifestyles. With growing urbanization, proliferation of smartphones, social media, etc., middle-income consumers are now spending more on cosmetics. KResearch has estimated that the total value of Thai cosmetics exports to the Philippines will reach THB260-270 million this year, surging 20-25 percent YoY. Cosmetics that should sell well there include beauty, skin care and body care products.
Given the rising popularity of herbal and organic cosmetics in that market, business opportunities – targeting upmarket consumers – are evident for products using herbs and other natural ingredients as raw materials. This corresponds to the fact that Thailand is no stranger to ‘natural' cosmetics manufacturing.
A business model that should work well for Thai exporters there would be to develop innovative, multi-purpose products that are directed at specific customer segments. However, Thai merchants may not be up to the price competition there since local sellers are savvier about this and have broad-based clientele, allowing them to sell their products cheaper.
Apart from an appropriate business model, Thai exporters should delve into other important matters, including: 1) trade regulations and product standards; 2) reliable and experienced business partners needed for effective marketing campaigns; 3) consumer behavior studies to remain aware of ever-changing and more varied lifestyles; and 4) modern marketing channels (i.e., bloggers, product reviews by celebrities or beauty experts) that could help trigger word-of-mouth marketing. More importantly, a focus should be placed on brand awareness as well as R&D (research and development) that might be facilitated in collaboration with recognized institutions. Such tactics would allow Thai cosmetic producers to tap into targeted customer segments more efficiently, improving their opportunities toward expansion in the Filipino market that would eventually lead to sustainable growth.
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