How does Korea affect Indonesia’s Beauty?

K-Beauty has significantly reshaped beauty ideals in Indonesia. The pursuit of “glass skin” and a bright complexion, popularized by K-pop idols and K-dramas, has created aspirational standards.

These ideals link beauty to confidence, success, and modernity, making Korean aesthetics highly desirable. K-Beauty products also resonate deeply because their lightweight, hydrating, and natural formulations suit Indonesia’s tropical climate and Asian skin types better than heavier Western alternatives.

This wave of K-beauty fervour has sparked a surge in local product innovation, with numerous Indonesian brands eagerly imitating Korean cosmetics, from core concepts and formulations to eye-catching packaging and branding strategies.

Take Somethinc, a rising local powerhouse, which has crafted products like its HYALuronic9+ Advanced + B5 Serum and AHA BHA PHA Peeling Solution, echoing the Korean staples from COSRX, complete with sleek, minimalist bottles that scream premium K-skincare.

Emina, Indonesia’s go-to teen cosmetic line, mirrors this by offering glossy lip stains and compact cushions in playful, pastel-hued packaging inspired by the cute aesthetics of Etude House.

Even more telling are brands like Avoskin, Hanasui, and Miss Glam, which draw inspiration from Korean giants such as By Wishtrend, Nature Republic, and COSRX.

These adaptations highlight how local players infuse K-beauty’s tech-driven trends with cultural relevance, fueling a homegrown movement where entrepreneurs aspire to replicate, and perhaps one day rival, South Korea’s global beauty dominance.

A Tale of Inspiration: Comparing Korean and Indonesian Skincare Innovations

Indonesia’s Beauty Market Dynamics

Young and fast growing, the total cosmetics market revenue of Indonesia has reached US$ 9.17 billion and is projected to reach nearly US$10bn as of 2028, growing annually by 4.6% (CAGR 2025-2028) (Insight of Consulting, 2024).

Several factors drive this expansion: a rising middle class, increased urbanization, and greater beauty awareness for both women and men. Crucially, Indonesia has a youthful demographic profile, with Gen Z alone constituting approximately 27.9% of the population, about 75 million people, and when combined with Millennials, over 52% of the population is under 35 years old (VOI, 2021).

This massive, trend-conscious young consumer segment is the reason why Indonesians are highly influenced by global pop culture, especially the Korean Wave (K-pop, K-drama, K-beauty).

According to Kantar, the beauty and personal care category grew 16% annually as of Q1 2025, four times faster than general FMCG. In 2024, Indonesia imported roughly $317 million in cosmetics, with ~$56.7 million from Korea, making Korea the 2nd largest cosmetics importer in Indonesia. (Kantar, 2025)

Prabowo (Indonesia’s President) and Lee Jae-myung (South Korea’s President) 
vow to deepen strategic ties © The Korea News

Indonesia and South Korea enjoy a strong economic partnership (IK-CEPA free-trade agreement) that reduces the trade barriers (Kumparan, 2022).

This has encouraged many Korean beauty brands and OEM giants—such as COSMAX, a Korean company that expanded to Indonesia in 2013.

As of August 2025, Cosmax Indonesia has achieved stellar growth, achieving annual sales of KRW 113.2 billion in 2024 (+31.9% YoY) and KRW 29.6 billion in Q1 2025 (+22.8% YoY), boasting an average annual growth rate of 48% over the past three years (TopDaily, 2025).

Globally, Cosmax has secured its position as the No.1 cosmetics ODM worldwide. Existing in 100 countries, Cosmax has consolidated sales of KRW 2.166 trillion in 2024, surpassing Italy’s Intercos and Korea Kolmar, and recording a 51.6% YoY surge (The Dong-A Ilbo, 2025).

In the first half of 2025 alone, the company posted KRW 1.21 trillion in sales and KRW 112.2 billion in operating profit (+30.2% YoY), underscoring its drastic worldwide growth momentum.

These achievements are driven by Cosmax’s strategic localization and its ability to adapt K-beauty trends into global contexts, making Indonesia a key driver for the Group’s international success (MK Korea, 2025).

© Cosmax.com

Indonesian distribution companies also frequently partner with Korean suppliers (e.g. Infinisia Sumber Semesta Co., Ltd., an Indonesian cosmetics raw materials distributor has 7 suppliers from Korea (Infinisia, 2025).

Many local brand owners use Korean ODM (original design manufacturer) services to develop products aligned with K-beauty trends. Conversely, Korean firms tap Indonesia as a production base or investment location, attracted by its large consumer base and lower labour costs.

Indonesian Food and Drug Regulatory (BPOM) even shows thousands of new product registrations each year, reflecting both imports and local creations (Insight of Consulting, 2024).

E-commerce is the driving force behind this growth. With around 189.6 million digital commerce users, beauty and personal care hold the largest share at 54.4% of total transactions.

Platforms like Tokopedia, Shopee, and Lazada have made Korean products more accessible across the archipelago. Research shows that featuring K-pop idols as brand ambassadors on Tokopedia boosted purchase interest by 46.1%, while on Shopee, 80.3% of surveyed Gen Z students said their buying decisions were influenced by their idols.

Moreover, Gen Z in Indonesia shows a strong tendency to buy during live streaming (62% made purchases via live shopping based on a 2024 data), making features like Shopee Live and TikTok Live powerful conversion tools.

After TikTok Shop reopened in Indonesia, the number of beauty products sold surged by 250%, underscoring the explosive adoption of social commerce (Food Navigator Asia, 2025).

Globally, TikTok Shop’s beauty category recorded even more dramatic growth, with GMV reaching US $2.1 billion in Q4 2024, up 153% year-on-year (InfoCharm.io, 2025).

Moreover, the beauty and personal care sectors dominate the platform: nine out of the top ten stores and eight of the top ten best-selling products belong to this category. Additionally, beauty is the most active category on TikTok Shop, with 63% of all brands and 87% of local beauty brands operating a TikTok Shop account (Momentum Works, 2025).

Best Selling Products from Korea at Sociolla © Sociolla.com

As of 2025, Indonesia has approximately 1,292 cosmetic companies, underscoring a thriving beauty landscape.

However, the nation still faces a critical challenge: the inability to produce raw materials domestically. Most local manufacturers rely on basic natural extracts, while South Korea has soared ahead with advanced technologies such as PDRN, exosomes, and encapsulation.

In a recent FGD with Paragon, Dra. Mediana Hadiwidjaja from Infinisia Sumber Semesta, acting as a key respondent, pointed out that at the undergraduate level, Indonesia still has no dedicated degree in cosmetic science; the subject is only offered as an elective course.

She is actively advocating for the establishment of a specialized cosmetic science program to strengthen local research and innovation. Without concerted government support, in the form of policy, research funding, and educational infrastructure, this gap in raw material production remains one of Indonesia’s most pressing weaknesses in the cosmetics sector.

Mediana Hadiwidjaja attending the Annual BKKPII 2025 Meeting (RRI.com, 2025)

Emerging Trends and Ingredients

Both markets are witnessing rapid evolution in beauty trends and ingredients:

• Skincare dominance:  Consumers focus on acne care, brightening, and anti-ageing. Key ingredients include multi-type hyaluronic acid, ceramide, retinol, and peptides. Korean clinic-grade actives like vegan PDRN, microneedles, and exosomes are gaining popularity in Indonesia.
• Digital and social influence: Indonesians are tech-savvy and beauty-obsessed. Korean celebrities and influencers help brands engage local audiences. For instance, Hanasui’s revenue surged by 252% after positive reviews from viral influencer Dokter Detektif amid the overclaim skincare controversy.
• Value and versatility: Price-sensitive consumers want multifunctional products (e.g. SPF + moisturizer + brightening). Brands like Skintific respond with affordable, multi-active formulas. A study found 60% of Indonesians now read packaging to check ingredients.
• Clean and sustainable beauty: Demand for natural, “clean” formulations is growing. Local brands emphasize halal-certified, eco-friendly ingredients and packaging. Korean brands, too, are marketing green credentials and transparency (for example, vegan skincare).

Key Takeaways

• Indonesia’s beauty market is booming thanks to its large youth population (over 270M people, 52% under 35) and rising middle-class. Skincare is king (projected >$800M by 2026), and consumers are eager for innovation, often from Korea.
• The Hallyu effect means Indonesian consumers heavily follow Korean beauty standards. Trade data confirms this linkage: Indonesia is one of Korea’s key export markets for cosmetics. Meanwhile, global brands (Korean, Chinese, Western) compete for market share, with Chinese brands rising fast due to affordability.
• Beauty trends continue to evolve: Korean innovations (microneedles, PDRN, exosome, snail mucin, etc.) and Indonesian preferences (brightening, multifunctional, halal/natural) are merging. Staying updated on these trends is crucial for brand owners, suppliers, and distributors in both countries.

Overall, Indonesia and South Korea form a dynamic beauty symbiosis. Indonesia’s young consumers fuel demand for K-beauty, while Korea contributes innovation and global influence.

Yet as Chinese brands rise, the landscape is shifting. Looking forward, with stronger research, smarter regulation, and better education, will Indonesia have become “the next Korea” in beauty innovation—moving from a trend-follower to a trendsetter?

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With its sprawling archipelago of over 17,000 islands, not only is Indonesia a diverse tapestry of cultures but it is also home to a dynamic demographic landscape.

Boasting a population surpassing 270 million, Indonesia stands as the fourth most populous nation in the world, representing about 3.45% of the global total.

According to UNICEF, children make up a full third of Indonesia’s population, totalling approximately 80 million individuals, which also positions Indonesia as the world’s fourth-largest child population.

As such, Indonesia consistently witnesses a growing demand for mom and baby care products across the archipelago. Indonesia’s demographic prominence underscores its significant role on the world stage and the saturation of its baby and child market presents a ripe opportunity for mom and baby care businesses in the country.

Mom and Baby Products Generates Money

In 2023, Indonesia’s Baby & Child market exhibited noteworthy dynamics, generating a substantial revenue of US$88.11 million.

Projections suggest a promising trajectory with an anticipated annual growth rate of 4.58% (CAGR 2023-2028), reflecting a robust and expanding market.

While Indonesia’s market holds its ground, a global comparison points to China’s dominance as it leads with a staggering revenue of US$623 million in the same year. On a per-person basis, Indonesia contributed US$0.32 to this market in 2023, signifying a measurable economic impact.

This financial landscape is not only driven by conventional products but also influenced by evolving consumer preferences.

Notably, there is a discernible surge in the demand for organic baby food products within Indonesia, propelled by a rising tide of health-consciousness among parents.

This trend aligns with the broader global shift toward organic and sustainable choices, shaping the landscape of the Baby & Child market in Indonesia and highlighting the changing preferences of the nation’s parents, as reported by statista.com.

As parental consciousness regarding health and hygiene continues to grow, the Indonesian market presents significant opportunities for imported baby products.

The period spanning 2014 to 2018 witnessed an impressive annual increase of 8% in the retail sales of baby and maternity products.

Fuelled by a rising purchasing power, the trajectory suggests a promising outlook for Indonesia’s baby and maternity market in the years to come.

Mom and Baby Care Now

As Indonesia experiences a steady increase in childbirth rates, the landscape of baby care products has transformed into a captivating arena for both well-established and emerging brands alike.

Within this dynamic market, baby lotion cream reigns supreme, accounting for a commanding 39.4% share, closely followed by baby soap and telon oil.

Leading the charge are globally recognized brands such as Zwitsal, Johnson & Johnson, Mitu, and Buds, all making significant strides in Indonesia’s domestic baby care sector.

Yet, it’s not just the international players shaping the market; local Indonesian brands like Bambi, Cussons Baby, Moell, and Gently have emerged as pivotal contributors, each offering their unique touch to meet the diverse needs of parents.

Adding to the vibrant mix, local favourites like My Baby Telon Oil Plus Eucalyptus Longer Protection, MS Glow Kids Daily Baby Cream, and Lactacyd Baby Gentle Care have garnered considerable attention and loyalty.

As one of the OEM manufacturers in Indonesia, PT. Etercon Pharma, plays a significant role by producing mom and baby care products under the brand name Pure Baby. These companies, alongside the global players, have earned recognition for their extensive experience in catering to mothers, providing a diverse range of baby care products tailored to various needs.

According to a survey conducted by JakPat (focusing on Indonesian consumers) on 12 September 2022, Cussons Baby has emerged as the favourite baby care brand, securing a remarkable 40.6% approval from 910 respondents.

Following closely is Zwitsal, chosen by 36.7% of respondents, trailed by My Baby and Johnson’s. This data emphasizes the strong brand loyalty and consumer trust that these established names, both global and local, command in the Indonesian market.

Mom and Baby Demand Now

The Baby & Child segment includes products designed for the young and for the protection of their skin. These incorporate baby lotion, baby oil, baby powder and sunscreen for babies and children. Excluded are skincare products for adults, e.g. sunscreen.

In Indonesia, an increasing number of mothers exhibit a willingness to overlook higher prices when purchasing baby care products for their children. They prioritize the well-being and comfort of their little ones over cost considerations, seeking high-quality products that meet the highest safety and health standards.

This phenomenon illustrates parents’ commitment to providing the best for their precious ones, regardless of the potentially higher costs associated with premium baby care items.

Such an attitude reflects shifting values and priorities among modern mothers who go for quality and innovation in caring for their children, contributing to the growth of the baby care product market in Indonesia.

Indonesian mothers are increasingly discerning when it comes to selecting baby care products, emphasizing a strong preference for natural, eco-friendly, and ethically sourced options.

The demand extends to products that undergo dermatological testing, ensuring safety for delicate infant skin. Additionally, the surge in awareness about environmental impact has led to a growing inclination towards vegan and cruelty-free products among Indonesian moms.

These conscientious choices align with a cultural ethos that values harmony with nature and a commitment to ethical practices.

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As we explore haircare in the Asia Pacific region, our Indonesia expert puts the spotlight on Indonesia…

Indonesia Outlook for Haircare

As a science that studies how to care for hair and scalp, to choose cosmetics according to hair type, climate and treatment techniques, the sector’s beauty experts recommend ways to treat hair, which are grouped into (1) daily haircare by washing hair using shampoo, conditioner, and dry treatment, (2) periodic care with cream baths and masks, (3) Special treatment for hair after straightening (keratin).

In response to hair problems and current trends, Indonesian salon services are proliferating and focusing, starting from basic treatments such as haircuts, cream baths, hair masks, and hair colouring to straightening and extensions.

The increasing variety of salon services and professional products for haircare in Indonesia is predicted to drive the market until 2028. However, the high price of services and haircare products is a major issue in this industry.

As is the case globally, more and more Indonesian consumers are learning how to take care of their hair with online tutorials and the help of influencers. Google noted a surge in searches for haircare activities throughout 2022.

‘Dry hair’ ranks first with an increase of up to 70% vs last year on YouTube. Second, you’ll find ‘dandruff’ with a 60% increase on YouTube, too followed by ‘hair spray’ (+20% year on year) on Google. Fourth was keratin with a 20% rise on Google.

Haircare Search Trends on Google and YouTube to Rise in 2022, What to Look Out for? (Katadata, 2022)

2023 Haircare Developments in Indonesia

 The Indonesian haircare market is experiencing remarkable growth, a phenomenon driven by increasing consumer awareness and spending on personal grooming products.

Rising significantly is the number of haircare products ranging from traditional herbal-based treatments to more technologically advanced products. Examples range from old school aloe vera plant to get its benefit but nowadays consumers tend to look for some technology including encapsulated aloe vera.

In general, consumers in Indonesia are more ingredient-aware and are seeking organic alternatives. Companies are responding by launching new product lines made from natural ingredients which include aloe vera, coconut oil, and other plant-based ingredients.

A company that tends to launch new products using natural ingredients is PT. Gondowangi Traditional Kosmetika, who are famous for their natural haircare products.

Source: https://gondowangi.com/natur/

As technology improves, many brands are offering personalized haircare solutions based on a customer’s specific hair type and requirements such as dandruff solutions due to scalp irritation. This allows customers to find the right products that work best for their hair and leads to customer satisfaction.

The online retail market in Indonesia is growing rapidly. According to McKinsey, in 2021, it became the ninth-largest e-commerce sector in the world, valued at $43 billion,  with many brands capitalising on the trend.

Companies operating in the Indonesia haircare industry are investing more in research and development to create innovative products that meet the evolving choices of consumers such as anti-pollution product for hair, scalp special treatment for man etc.

This includes the development of new ingredients such as frangipani flower extract, mangosteen extract and even vitamin C, ceramide and technology to make haircare products more effective.

With a growing population, many haircare brands are expanding their operations into rural areas in Indonesia to reach a wide customer base.

According to Statista Market Forecast1, the revenue in the haircare market in Indonesia amounts to US$1bn in 2023 and is expected to grow annually by 4.10% (CAGR 2023-2028).

Increasing product awareness, financial independence among female consumers, and considerable attention to male grooming are the main drivers of this expected growth because of the male population’s concern about  their appearance and interest in cosmetics.

In addition to that, digital penetration (currently standing at 73.7% in Indonesia) has also increased rapidly, which in turn improves the e-commerce infrastructure, making haircare products more accessible to consumers.

The following are leading haircare companies in Indonesia with the most sales both in the marketplace and e-commerce:

L’Oréal

Present in Indonesia since 1979, the French behemoth has always demonstrated its commitment to the growth of the beauty industry focused on innovation, digitalization, education, and human resources. Based on the report from the Databooks Katadata official website, L’Oréal saw revenues of US$ 40,310 billion in 2022.

Source: https://www.loreal-paris.co.id/elviverecycle

Makarizo

This brand claims it can overcome various kinds of hair problems almost as a “trend centre” for haircare products. The future looks bright for Makarizo with more intensive promotions and additional product innovations tailored to the market such as natural based ingredients, digital trending and hair treatment tutorials.

Source: https://akashainternational.com/id_ID/makarizo-hair-energy/

Pantene

Pantene has been around for decades and it dominates the Indonesian market and is produced by PT P&G Indonesia, which has been marketed in Europe since 1947. Since its first marketed product, Pantene has continued to innovate to meet its customers’ needs and wants, especially those related to haircare.

As reported on the Compas official website in 2022, Pantene was ranked third as the best-selling shampoo product brand in Indonesia during the second quarter of 2022, and there were approximately 32.3 thousand transactions of Pantene products in one quarter only from its sales at

Source: https://www.pantene.co.id/id-id/produk-toko/rangkaian-produk/total-damage-care

Haircare Opportunities in Indonesia

Hair Growth Treatment

In Indonesia, where beauty and personal care are highly valued, hair growth treatments will always be a popular claim sought by consumers, including combating hair thinning and promoting hair regrowth and proven effective.

Numerous brands offer shampoos and hair tonic infused with essential oils, vitamins, or natural extracts that claim to promote hair growth and reduce hair loss.

Source: Miranda Hair Growth Formula Shampoo, with Sunflower oil and biotin to help hair growth and reduce hair loss

Gently Hair Serum is infused with candlenut oil and ginseng extract, which are known to nourish and thicken the hair, stimulate hair growth, increase hair density, promote healthy and non-dry hair, and strengthen hair roots and strands.

It is formulated specially for baby and kids.

ERHAIR Hairgrow Serum is a hair serum that tackles hair loss and helps stimulate new hair growth by using its Kopexil and Panax Ginseng extracts.

These work together to reduce hair loss and promote hair regeneration by improving blood circulation and nourishing the hair.

Hair Straightening

Indonesia is one of the most ethnically diverse societies on earth as it consists of 1,300 ethnic groups, each having distinct hair types. As a result, hair types in Indonesia can vary widely, however wavy and curly hair are the most common hair types in Indonesia.

Therefore, the pursuit of sleek and straight hair has led to a surge in the popularity of hair straightener treatment products within the country. A semi-permanent treatment has become a game-changer for individuals seeking long-lasting straight hairstyles.#Easystraight Hair Energy from Makarizo has created an easy to use hair straightening cream which provides a solution for straight, neat, and permanent hair without having to go to a salon.

Haircare for the Hijab-Wearing Market

The report by The Royal Islamic Strategic Studies Centre (RISSC) in 2023 indicates that the Muslim population in Indonesia has reached 237.55 million people, making it the largest in the Association of Southeast Asian Nations (ASEAN) region as well as globally.

The Muslim population in Indonesia accounts for 86.7% of the total, hence the booming segment of hijab-wearing women who face unique challenges including dryness, breakage and scalp issues.                       

Shampoo products especially created for hijab—wearing consumers (Sariayu and Pantene).

Ideal Haircare for the Indonesia Market

As Indonesia has a tropical climate with humidity usually between 70 and 90%, it’s crucial to prioritize clean hair. Because of that, it is recommended to cleanse one’s hair with a gentle, sulfate-free shampoo to remove dirt and pollutants. Hydrate hair with a moisturizing conditioner and treat it with deep conditioning treatments to combat dryness caused by humidity and minimize heat styling.

The Market is Shifting

The distribution channels for haircare products in Indonesia is split mainly between supermarkets/hypermarkets, specialty stores and online stores. Supermarkets/hypermarkets hold the largest market share, comprising approximately 40% of the total distribution channel.

Globally, Asia-Pacific emerges as the leading haircare market with a 40% share. This dominance can be attributed to factors such as the region’s substantial population, rising disposable incomes, and rapid urbanization.

The market landscape has undergone a significant transformation as offline stores have gradually given way to online shopping. This shift has been driven by the convenience and accessibility offered by e-commerce platforms for purchasing haircare products.

As a result, the online haircare market has witnessed substantial growth, prompting brands and retailers to establish robust digital platforms and expand their product offerings.

While offline stores still hold significance, the online shopping trend is expected to continue shaping the haircare market, providing consumers with convenience, variety, and a seamless shopping experience in the digital realm.

Conclusion

Indonesia’s haircare industry is on a path of continuous growth and evolution. The market offers a diverse range of products, from natural and sustainable solutions to personalized haircare.

Digital platforms, especially social media and e-commerce, play a crucial role in shaping consumer behaviour and introducing new trends.

Additionally, the demand for halal-certified products presents a significant opportunity for brands.

By staying up to date with consumer trends and focusing on innovation, the haircare industry in Indonesia is set to flourish for years to come.

Find out more about haircare at in-cosmetics Asia on 7-9 November, with Love is in the Hair, spotlighting formulated haircare ingredients.

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Put simply, the cosmetic industry in Indonesia is developing at a remarkable pace. Statistics from the Indonesian FDA (BPOM, Indonesia’s National Drug and Food Control Agency) show that the industry, which includes the pharmaceutical, chemical, traditional medicine and cosmetic industry sectors experienced a growth of 9.61% in 2021.

New brands compete and blossom in Indonesia

In parallel, within a year (2021 to 2022), the number of cosmetic companies in the country jumped by over 20%, from 819 to 913 entities.

The emergence of new industries inevitably leads to the proliferation of new brands, which must navigate a variety of challenges and issues in order to establish themselves as viable and successful enterprises within the market.

A major challenge that new brands face is the need to differentiate themselves from existing competitors. In the sunscreen market, for instance, emerging brands must compete against established players such as Azarine and Wardah, as well as other large brands.

Additionally, with the influx of Chinese brands into the Indonesian market, there is intense competition and pricing pressure as these newcomers regularly offer lower prices to capture market share.

Thus, it is imperative for new brands to effectively communicate their value proposition to their target audience in order to succeed.

Flourishing Indonesian cosmetic industry

Personal care is also the product category that has received the most distribution licenses by BPOM in Indonesia in the last 5 years with an astounding 411,410 products launched on the market.

Cosmetics have been receiving more attention from Indonesian consumers for a while and this is due to several factors.

Key to this is the rise of the middle class with higher purchasing power. Indeed McKinsey & Company forecast that the middle class in Indonesia is on course to grow from 45 million in 2018 to 135 million people by 2030. This represents a significant increase in purchasing power and presents opportunities for businesses to tap into this growing consumer base.

Also, this dynamic focus on personal grooming and appearance has been fuelled by Indonesia’s social media users (over 180 million), making it one of the largest social media markets in the world and providing fertile ground for beauty influencers.

As was the case elsewhere, the COVID-19 pandemic has also boosted demand for cosmetics as consumers in Indonesia are now shopping more than ever before on e-commerce platforms such as Shopee and Tokopedia.

The pandemic has also caused Indonesians to focus more on their health and beauty, resulting in a surge in demand for – safe – cosmetic products.

Paragon Group to the fore

During the pandemic, the Paragon Group launched new cosmetic brands to cater to the changing needs of Indonesian consumers who were spending more time at home and shopping online. The company unveiled brands such as Emina and Putri, which offer affordable and halal-certified cosmetic products designed for younger consumers.

The existing brands of the Paragon Group, like Wardah and Make Over, also expanded their product lines to keep up with market trends and consumer demand.

Overall, the Paragon Group’s focus on launching new and diverse cosmetic brands during the pandemic helped the company to meet the needs of Indonesian consumers while contributing to the growth of the industry, including the Halal products Tavi or Kahf.

Challenges for R&D

R&D in Indonesia is currently facing several challenges. These include the cautious development of formulations with new textures as companies tend to prioritize watching the market rather than being innovative trendsetters.

Research and development departments often face the test of a balancing act between introducing new textures and living up to market expectation.

The demand for active ingredients to undergo in vivo testing places constraints on R&D’s ability to create new products. The regulatory requirements set by BPOM necessitate extensive testing of active ingredients before they can be incorporated into products, thus limiting R&D’s flexibility to explore innovative formulations.

The tendency to cling to current and past practices can make it challenging for companies to embrace new technologies. Innovation adoption can be hindered by the fear of the unknown and the perceived risks of implementing novel technologies in the industry. It is therefore crucial for companies to maintain a balance between integrating new technologies and adhering to established practices.

New brand strategies – it’s all about identity!

A study by global measurement and data analytics company Nielsen reveals that 59% of consumers prefer to buy new products from brands they are familiar with.

A unique brand that stands out from the competition can create a sense of familiarity and trust with consumers, increasing the likelihood of repeat purchases and brand loyalty. Currently, the variety of cosmetic products in Indonesia is very wide.

Skincare products made from natural ingredients are particularly popular. As an example Sensatia Botanicals and Martha Tilaar make-up products are designed to withstand the hot and humid climate in Indonesia.

Haircare products cater to different hair types, and fragrance options include traditional Indonesian scents example Herborist and Bali Alus.

But, for the new brands out there, how easy is it to communicate their unique selling point to ensure better visibility and recall?

Clearly, creating products that are affordable yet high quality, unique and packaged in eye-catching material complete with an attractive logo are a must. But also key is producing a visionary concept.

Wardah’s achievements

Wardah is a popular Indonesian cosmetic brand that focuses on producing halal-certified skincare and make-up products. To successfully deliver its brand to Indonesian consumers, Wardah has obtained halal certification to cater to the needs of Muslim consumers. The company has also kept its products affordable to a wide range of consumers and has relied on Instagram and Facebook to market them to a younger audience.

On the R&D front, Wardah continues to innovate with new product lines boasting natural ingredients, such as seaweed and tea tree oil.

Wardah has also created a positive in-store experience by offering product testers and knowledgeable sales staff.

As a result, Wardah has successfully delivered on its brand promise, gaining popularity among Indonesian consumers who value halal-certified and affordable skincare and make-up products.

Relentless innovation

As we know, innovation is a key factor to capture market share and allow brands to differentiate themselves from their competitors by offering unique solutions to customer needs. Innovative brands can also create a buzz and generate excitement among consumers, leading to increased awareness and customer loyalty.

For a brand to be as successful and innovative as the likes of Apple, Tesla, and Google, the challenge is creating stand-out products for the future and here are a few examples of brands that have done just that in Indonesia.

1. Azarine, known to produce one of the best sunscreens in Indonesia. It also claims to have a lightweight and non-greasy formula, making it comfortable to wear in Indonesia’s hot and humid climate.

2. Somethinc, for their best seller completed serum. These factors have helped to establish the brand’s reputation for producing safe and effective skincare products, which has contributed to its popularity among consumers.

3. Implora, for their affordable yet great quality lip cream. Implora is able to offer affordable and lip creams by using efficient production processes and focusing on key ingredients whilst committing to high quality.

4. Wardah, with their pioneer halal products, creating the Halal cosmetic trend not only in Indonesia but also globally.

As the best selling American author and philanthropist Sarah Ban Breathnach once said “The world needs dreamers and the world needs doers. But above all, what the world needs most is dreamers that do”. Judging by the level of activity and innovation on the Indonesian cosmetics market, the dream is becoming reality….

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Indonesia is one of the countries with the largest Muslim population in the world, surpassing Pakistan and India. According to Ministry of Home Affairs (Kemendagri) data, as of December 31  2021, Indonesia’s Muslim population was 237.53 million, 86.9% of the total majority population of Indonesia.

In recent years, the increasing religious awareness of young Muslim consumers and the growing Muslim population around the world have led to an increasing trend of using Halal products all over the world. The Indonesian middle class now have very high purchasing power, especially in the cosmetics sector, and play an important role in influencing modern Indonesian society. It’s no wonder Indonesia is one of the countries with the highest consumption of Halal products in the world.

About Halal cosmetics in Indonesia.

Halal cosmetics have existed in Indonesia since 1995, starting with the brand Wardah which has been a pioneer of Halal cosmetics in Indonesia since. Wardah raised the initial awareness to Halal cosmetics, but it did not become mainstream until 2014.

Halal product regulation was started in 2014 by the Indonesian government and cosmetic products were affected domestically and those coming from overseas. To be Halal, the ingredient of their raw materials to finished products must follow Islamic law. This meant it must not contain ingredients derived from pigs, blood, human body parts, predatory animals and reptiles, and must comply sharia in accordance with the recommendations of The Institute of the Indonesian Ulema Council (MUI).

Overview of Halal cosmetics in Indonesia

Euromonitor shows a staggering 11.99% growth in sales of beauty products since 2017, contributing to IDR 19 trillion. According to statistical data, the growth of beauty products increased by around 6.46% in 2021 despite being affected by the Covid19 virus, with online sales dominating.

According to data from goodstats.id for the use of Halal cosmetics, Indonesia ranks second after India. Indonesia continues to grow rapidly and is said to have become the centre of the cosmetics industry due to government support and a large female population.

According to Muti Arintawati, president and director of the Ulema Council of Indonesia (MUI), there were only 64 cosmetic companies with Halal certification in 2017. The number has continued to grow rapidly, with 129 companies in 2018, 162 companies in 2019, and 214 companies in 2020.

Challenges of Halal cosmetics

These government regulations must be complied with by October 17, 2026, requiring all producers, both raw material suppliers and finished product manufacturers, to be Halal certified.

These regulations pose a major challenge for all raw material suppliers, especially from overseas. By the above dates, you should be able to obtain Halal certificates for the raw materials you export to Indonesia. Halal certification can be done in each country of raw material production by Halal certification providers cooperating with BPJPH (Badan Penyelenggara Jaminan Produk Halal).

But there is also good news, as the government has lowered the registration price for Halal certification of domestic products to $3 and provide convenience in carrying out Halal registration to cosmetic business actors in Indonesia by providing a short time in Halal registration services in 15 days and forming many organizations to verify Halal documents so that the process can be faster. According to the government, the aim is to promote the domestic production of beauty products.

PS: The future of halal beauty was discussed at the recent in-cosmetics Asia event in Bangkok – you can now download the presentation here 

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The Cosmetic Outlook

For several years, the cosmetic market in Indonesia has been very promising. Brand owners are now competing to create new, diverse and efficient products. Based on data provided by compas.co.id, a market insight platform, the top three ranking beauty products are facial cleansers with the product achieving 26% of total sales, followed by serums with a 16% share and thirdly, moisturizers, accounting for 13% of sales.

As of now, facial cleansers are still dominated by multi-national companies such as Unilever with brands such as Ponds and Garnier, followed by local brands such as Wardah, with their Wardah Perfect Bright facial wash. On the contrary, most sales of serums and moisturizers are dominated by local brands ranging from MS Glow to Implora, and Somethinc as they compete with each other to create a product as good and attractive as possible.

Natural or Chemical?

Nowadays, Indonesians are very well-educated about the ingredients in the skincare they use. Consumers tend to do their own research about the ingredients in the skincare products they are looking for. The information about the ingredient can easily be found on the internet and the results obtained may determine the purchase. Therefore, it is very important for brand owners to always follow the trends that are currently loved by skincare users in Indonesia.

Based on a survey done by Statista, almost 96% consumers who use skincare in Indonesia choose products that contain natural ingredients, and the rest opt out of the one made of chemicals. However, natural ingredient takes a longer time to get the results in contrast to the products using chemicals.

There are lots of popular natural ingredients used in personal care products, such as Bakuchiol oil used for anti-aging, Centella asiatica to sooth the skin, or Aloe Vera for dry skin and sunburn. There are many advantages from using natural ingredients, one they’re less irritable to the skin which is good for sensitive skin, environmentally friendly, and they can provide the same efficacy as chemicals although requiring more time.

Natural ingredients in Indonesia are also relatively easy to register at the Badan Pengawas Obat dan Makanan (BPOM), the Indonesian Food and Drug Registration Agency. In fact, using traditional or natural ingredients has become a part of popular culture in Indonesia since several decades ago and these natural ingredients have been used in these products including body scrubs, flower water, and lotions. The ingredients commonly used are coconut oil (minyak Kelapa), aloe vera (lidah buaya), Aleurites moluccanus (Kemiri), rose water, etc.

Back to Basic Ingredients

Despite the love of natural ingredients in Indonesia, the popularity of using chemical or synthetic-based active ingredients still exists. Up until now, the use of skincare ingredient containing retinol or niacinamide is still very popular because of their clinically tested significant effect. Although these ingredients are considered old-fashioned ingredients, in these recent years, they are back on trend as it claims to improve the skin barrier for niacinamide and retinol for its anti-aging effect.

These basic ingredients are usually formulated for serum preparations which are very popular in Indonesia. One of the local brands popular with their retinol and niacinamide serums are Somethinc, Implora, and Azarine (who will be speaking at in-cosmetics Asia in November) and according to compas.co.id they can sell a total of up to 8 billion rupiah in total sales in 2021.

Following the K-trend

Trending ingredients in Indonesia are heavily influenced by Korean beauty. For example, in 2020, improving skin barrier was a trend in Korea. Soon, the niacinamide ingredient immediately went viral and majority of the brands produced skincare with it as an active ingredient, followed by the Retinol trend. This trend also influenced Indonesian’s product and named Niacinamide and Retinol as the most popular actives used in skin care nowadays.

Newest Hero Ingredient in Indonesia Market

The competition in the Indonesian cosmetic industry has become saturated. Currently, skincare manufacturers or brand owners need more unique new ingredients to freshen up the market. Active ingredients such as Evodia Rutaecarpa Fruit Extract as the example, can improve skin microcirculation which helps to boost the skin for a glow as well as reducing skin redness and even minimize skin pores. There is also Acmella Oleracea Extract which can give an instant botox or tightening effect right after its application. These two are the examples of unique actives that could bring something new in the market instead of using a ‘not-so-new’ active ingredient.

Good News from Indonesia

Good news came from the Indonesian government which stated that “Indonesia has the potential of plants that grow in various regions with a total of about 30,000 out of 40,000 species of plants in the world and with a high prospective to be developed due to the potential needs in local and global markets”. The government will continue to support the development of local natural cosmetic ingredients ahead in the 4.0 industrial era. In addition, the registration process of the natural ingredients cosmetics is not complicated anymore.

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Outlook

Over the years, we have seen the skincare market in Indonesia climbing to the top. With the combination of young consumers and the post-pandemic economy, Indonesia has seen an increase in sales in the skincare market.

Based on predictions from GlobalData the skincare market in Indonesia will continue rising and is estimated to increase by 9% by 2026. This growth is a result of greater financial independence for working women, greater interest in natural & organic products among the youth, and greater attention to grooming by men.

Market overview

Before the pandemic in 2020, supermarkets had been the leading distribution channel for the Indonesian cosmetic market. However, the pandemic has shifted the cosmetic distribution channel from offline stores to online platforms. This trend is expected to continue as consumers seem to enjoy the convenience of having products delivered to their front door by delivery services such as Gojek Instant Service.

With the wide use of the internet, people working from home, and social media promotion, there is an evident push in sales from e-commerce platforms such as Shopee, Tokopedia, BliBli, etc. The skincare market is estimated to grow by a further 20% in 2023 according to McKinsey.

Key insights into the skincare market in Indonesia

Beauty is a must!

Beauty is a social standard in Indonesia, currently females in Indonesia along with their male counterparts, who they outnumber, are focused on self-care and beauty in general more than ever from an early age.

Women in modern and urban cities such as Jakarta are being socialized to believe that beauty is a must-have where companies are including ‘good looking’ and ‘attractive’ as a key part in job requirements.

Korean beauty still preferred

Korean beauty still attracts the attention of the majority of people as K-beauty products almost always come with high innovation, technology and are gentle to the skin. In addition, K-Beauty products are very variative to use, so they can be a one-stop answer to various skin problems Indonesian women face.

Over the years, due to the increase of the K-beauty trend, many Korean artists or ‘idols’ are seen to become brand ambassadors for more local brands in Indonesia, such as Sometinc with NCT Dream and Lee Min Ho for Azarine Cosmetic.

Back to naturals

Indonesia is a country rich in natural resources, therefore, the demand for natural products continues to grow as more Indonesian skincare users become more knowledgeable and aware of the use of chemical products.

This is one of the many reasons why Korean brands which focus on using natural ingredients in their products are widely popular in Indonesia, such as Innisfree or Nature Republic.

Challenge in skincare

The challenge itself comes from the consumer. Customers have a lack of product loyalty due to the plethora of products that claim to offer and provide equal or even better prices. The saturated skincare products in the marketplace can leave consumers confused with purchasing decisions, meaning they tend to try different brands or products every time.

The next challenge is from government regulations. Skincare products are considered as controlled goods by Indonesian customs, and this is a major challenge for companies and brands who would like to sell their skincare products in Indonesia. To do so, they must apply or register for a license to the Indonesia National Agency of Drug and Food Control (BPOM). The registration process and details needed to complete the documentation from both the raw material supplier and manufacturer is a long process.

Lastly, most of Indonesia’s population is Muslim therefore consumers will need to ensure that their favourite product is “Halal” or not. This means that the product must follow Islamic Law, which must not include any swine/pork or non-halal animals or must conform with Islamic law. Therefore, every cosmetic product distributed in Indonesia must secure halal certification from Majelis Ulama Indonesia (MUI).

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Feeling inspired to see ingredients and trends in action?

Then why not visit one of the in-cosmetics events around the world?