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26 May 2006

Industry

Cosmetics, 2006: Focusing on Quality ... Differentiation ... Expanded Markets

คะแนนเฉลี่ย
At present, Thai consumer behavior is showing increased interest in cosmetics. Cosmetics have become an important part in the daily lives of many consumers of both genders and all age groups ranging from the teenagers and students to the working-aged persons, among not only female consumers, but also males; a relatively new group whose importance is increasing. Cosmetics are used to enhance beauty as make-up or are skin care preparations, preparations for hair, as well as oral and dental hygiene, shaving, bathing and personal deodorants. At present, cosmetic products in Thailand have an aggregate market value of more than THB20 billion. As for the domestic market in 2006, KASIKORN RESEARCH CENTER (KResearch) holds the view that it will likely remain unchanged from last year at around 8-10 percent due to the slowing economy. Products that are reaching market saturation include shampoos, conditioners and soap bars, while cosmetic products with healthier trends include sunscreen lotions, wrinkle treatment cream and whitening products.

Considering the factors that affect competitiveness of Thai cosmetics in 2006, KResearch views that there are many obstacles toward further development of the Thai cosmetics industry, i.e., innovative production technology to create new formulae needs more development, there is a problem on research and development to systematically use local natural ingredients as raw materials, plus the purchasing power of local consumers has contracted in 2006 due to higher costs of living, and the possibility of tougher rivalry in the domestic cosmetics market in 2006, etc. However, the domestic cosmetics market is aided by several potential factors. Firstly, Thailand has natural resources ? especially herbs ? that can be developed to provide a large volume of raw materials. Secondly, domestic demand has shown an increasing trend, despite the stalled economy, as nowadays, consumers are becoming more conscious of health and image. Last but not least, there are extensive distribution channels to reach customers in most areas.

KResearch, therefore, is of the opinion that in order to build a good standing in the domestic cosmetics market in 2006, it will be necessary to differentiate brands through higher product quality and ingredients or formulae that are responsive to the demands of consumers in various segments and better permit the expression of individuality, as well as express a more distinct Thai image and scents. As regards raw materials, studies and research on domestic herbs should be underlined to add concrete value.

In terms of packaging, this should be constantly developed for smart, attractive and unique designs that will encourage purchases. In the meantime, new players must build awareness toward their brands with target groups through careful product positioning. On the other hand, existing entrepreneurs whose brands are already established should regularly evaluate their market viability to maintain their brand recognition. In addition, the government and private sectors should steadfastly collaborate in developing cosmetics-related support industries to efficiently enhance the Thai domestic cosmetics industry growth, which would lead to the long-term success of Thai entrepreneurs, not only domestically but also in the international arena.

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Industry

Cosmetics