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31 Mar 2006

Industry

Thai Cosmetics, 2006: Trade Surplus Likely to Continue, Income Nearly THB30 Billion

คะแนนเฉลี่ย

Based on the latest report of the Global Trade Atlas, the world's market turnover of cosmetics in 2004 totaled USD101.688 billion, while the figure over the first nine months of 2005 reached USD82.164 billion, rising over the USD74.179 billion in 2004, an increase of 10.76 percent, over-year. Among the world's top five exporters are France, Germany, Ireland, the US and the United Kingdom where their combined export value account for more than 50-60 percent of the world's annual cosmetic exports. Within the ASEAN bloc, Thailand is the second largest exporter, with Singapore in the lead. However, Thailand ranks fourth in Asia, lagging behind Singapore, China and Japan, with exports totaling USD660.5 million, or equivalent to THB26 billion in 2005.

Looking at Thai cosmetics' competitive potential in the world's market in 2006, KASIKORN RESEARCH CENTER (KResearch) takes the view that the country may be able to maintain its current status close to what was seen last year, given strong demand for such products in the global market and bright prospects in the target market economies. Meanwhile, cosmetics under Thai brand names have gained more recognition in the world market, thanks to their world-class standards of product quality, attractive packaging and a wide variety of product types on offer. Of late, Thailand's herbal cosmetics have gained greater popularity in foreign markets due to their unique designs and scents. Remarkably, over the past 4-5 years, Thai cosmetics have exhibited satisfactory growth in the world market. Overall, exports of Thai cosmetics in 2006 are likely to rise by 12-15 percent, while Thailand's imports of such products are set to post growth of some 10 percent this year. As a result, Thai cosmetics may earn the country more than USD700 million ? or almost THB30 billion in revenue. Thus, it is likely that Thai cosmetics will continue to enjoy a trade surplus in the global arena.

However, as Thailand's market share for this category of goods is still not very high and remains stalled somewhat, therefore KResearch views that Thai merchants should steadily expedite strategic adjustments in production and marketing. This can be done in many ways, including development of innovative new products featuring Thai herbal ingredients that are becoming more popular each day in overseas markets, because Thailand is more ready with abundant and varied natural ingredients than rivals. Meanwhile, entrepreneurs should add value to these goods and ensure that they have the claimed properties. They should create awareness with customers to realize the distinctions between products, and be able to respond to the demand of target groups at suitable prices. They should improve cost management to lower production cost. In addition, significance should be given to research on consumer behavior and using the results of such studies to define marketing plans, public relations and advertising that reach each target group, whose demands are increasingly more varied.

Marketing strategies should be clear to stimulate buying decisions, which will also create awareness among customers. Even if the product is exceptional, without consumer awareness, undergone production and development will be useless. Brands must be created and good relations fostered with customers to maintain market share and increase sales volume, or the opportunity to survive in the market in the long run. In addition, the state sector should extend support seriously and steadily, such as in certifying product quality, organizing exhibitions, reducing tariffs for imported raw materials and packaging, because Thai rates are still higher than rivals such as China, Malaysia, etc. These approaches will definitely enable the Thai cosmetic industry to enjoy sustainable development, create employment, enhance income distribution, and earn higher foreign exchange income from exports of Thai cosmetics in the future.

Industry

Cosmetics