Asian rituals captivate cosmetics groups; Skincare accounts for 63% of the beauty market in Asia, compared with 32% in the US.

April 23, 2013 2:51 pm

Asian rituals captivate cosmetics groups

By Scheherazade Daneshkhu

When cosmetics groups’ executives survey the Asian market, it is the Korean woman’s beauty regime that gets them excited. She spends 30-40 minutes at night on skincare, using 10-11 products. That compares with the typical French woman who uses only three products in 3-10 minutes a night. The Korean beauty ritual has parallels among other Asian women, so the potential to sell multiple products is higher in Asia than in other regions. With so many creams and serums layered on the face, their weight and texture has to be lighter than that produced for other parts of the world, says Nicolas Hieronimus, head of L’Oréal’s luxury cosmetics division. Some 50 per cent of L’Oréal’s Lancôme Asian sales are for products developed specifically for the region. Some categories – such as whitening creams – do not exist in France, says L’Oréal. “There is no single model for beauty,” the Paris-based company said of the controversial products, which most of the large international cosmetics groups, including Estée Lauder and Clarins, also sell. Whitening creams have a penetration rate of 46 per cent among women in China, 78 per cent among urban women in India and only 5 per cent in the US. L’Oréal says this is because dark spots are the first signs of ageing in Asia, unlike for Caucasian women, who suffer more from wrinkles instead. “There is a genuine demand for whitening products which we respond to by offering products whose function is to eliminate hyper-pigmentation and to even and brighten the skin tone,” said L’Oréal. Asian women much prefer skincare to the other two beauty categories of fragrances and make-up. Skincare accounts for 63 per cent of the beauty market in Asia, compared with 32 per cent in the US. For cosmetics groups, that represents an opportunity to develop the market for fragrances and make-up, mainly through advertising. “China will be a three-category market like the rest of the world in years to come,” forecasts Mr Hieronimus.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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