A special report by the French Trade Commission - Business France Malaysia (November 2018)
The Malaysian hygiene and beauty market is driven by the steady rise
of purchasing power and strong domestic demand. Although it reached maturity in 2013, it still represents EUR 1.6 billion in 2016, which is + 4% compared to 2015. Skincare market grew by 7% in 2016, reaching EUR 535 million in 2016 and is expected to record a compound annual growth rate (CAGR) of 4% at constant 2016 prices for a total of EUR 656 million in 2021.
The Malaysian middle and upper-classes, who represent the majority of the country's 32.3 million people, are increasingly giving more and more importance to their image.
Furthermore, they are also eager for more sophisticated care. This Is shown by the growing demand for makeup, natural cosmetics, multi-functional beauty products, baby care and men's products.
MARKET DEVELOPMENT & LOCAL PLAYERS
Colour cosmetics are used daily by Malaysians, especially those who work in the corporate world to embody a greater self-image and confidence in the office. Rising adult literacy rates have pushed more Malaysian consumers to look for healthier beauty and personal care products enriched with natural ingredients.
Korean brands which are more adapted to Asian skin are experiencing strong success, which is also experienced by American brands who are actively developing products to suit the market. Local Malaysian brands, on the other hand, remains limited but is growing rapidly by developing particularly in the halal-certified cosmetics and perfumes sector. European products are growing in popularity, especially with French producers leading the way by being the first European supplier of beauty products in Malaysia.
The remarkable power of direct sales networks is to be exploited particularly in the field of food supplements and white label products. While high-end cosmetic products are still mainly distributed in multi-brand outlets, many companies have successfully developed their own network of boutiques (L'Occitane, Khiel's, The Face Shop, Mac, Bobbi Brown, Melvita, Aesop, etc.).
Halal certification, while not mandatory in Malaysia, offers a real competitive advantage. The global halal cosmetics market is expected to grow with a compound annual growth rate (CAGR) of + 12.9% from 2017 to 2025. This is thanks to a good socio-economic condition and a large Muslim population worldwide, estimated at about 1.6 billion, the majority of the population is residing the Asia Pacific region and accounted for approximately 62.2% of total market revenue.
The values promoted by halal certified products have become synonymous with ethical consumerism and range from social responsibility to animal welfare. To add more, the tedious certification process and rigorous requirements have caused a large number of consumers to perceive halal cosmetics as generally safer.
Beauty salons with international brands such as Sothys, Clarins, Caudalie, Decleor, Guinot and Dermalogica are proliferating in Malaysia. Institutes and spas have a strong presence in hotels and shopping centres, where they usually have a dedicated floor for it.
Only a local company with an import license (importer/distributor or subsidiary) could start the procedure for placing the cosmetic product on the market. This procedure must be carried out by a company or legal entity incorporated within the field of cosmetics, with a permanent address and registered with the Malaysian Companies Commission (with the scope of the health/cosmetic product).
The National Pharmaceutical Regulatory Agency (NPRA), which reports to the Ministry of Health, is the reference authority
and average cost of registering a product is RM 50 (around EUR 10 per product, by reference).
The notification of a cosmetic product is valid for 2 years. Renewal must be done no later than 1 month before the expiry date with processing fees.
Average registration time of a product: 1 week to 6 months (if it does not contain any prohibited substance).
The average time between the first administrative procedure for export and the placing on the market: 1 month to 1 year.
Malaysia applies it’s regional ASEAN regulations as defined in the ASEAN Cosmetic Directive.