The Malaysian skin care market is expected to grow at a CAGR of 15% over the forecast period, reaching a value of MYR8.1 billion by 2021. This growth is being driven by rising awareness of the importance of skin care, increasing disposable income, and the growing popularity of Southeast Asian brands. The leading player in the market is Procter & Gamble (M) Sdn Bhd, with a retail value share of 12%.

Key Data Findings

• Retail value sales increase by 8% in current terms in 2021 to MYR4.0 billion
• Facial care is the best performing category in 2021, with retail value sales growing by 10% in current terms to MYR3.3 billion
• Procter & Gamble (M) Sdn Bhd is the leading player in 2021, with a retail value share of 12%
• Retail sales are set to rise at a current value CAGR of 15% (2021 constant value CAGR of 12%) over the forecast period to MYR8.1 billion

Industry overview 2022 of The Malaysian Health supplements market

Mandatory Wearing masks create a demand for skin care items.

In 2021, skin care products saw a positive overall performance, with many of them being seen as essential beauty items, particularly moisturizers and treatments. Even though COVID-19 restrictions were still in place for much of the year in Malaysia, people stayed at home and continued to work from there, which helped drive sales. With beauty salons closed during the lockdown, some consumers turned to at-home treatments, resulting in increased demand for mass face masks, anti-agers (both mass and premium) and mass facial cleansers.

The need to wear masks and take care of facial skin problems related to them cause an uptick in demand for dermocosmetics, which continues to see double-digit growth. Malaysian consumers who can afford more expensive skin care products trust those items more because they are backed by scientific claims that have been verified by specialists such as dermatologists. Skin care also trending above bath and shower in popularity, based on value share within dermocosmetics beauty and personal care. In 2021, Beiersdorf’s Eucerin will remain the leader in dermocosmetics facial care with the launch of Eucerin Pro Acne Solution. This product is marketed towards consumers who are experiencing acne due to mask wearing. To help promote this product, health and beauty retailer Guardian ran a campaign from February 1-28th offering customers who purchased the product in store a free gift. The brand also introduced the DermaAnalyzer, a skin age scan technology, which is available at health and beauty specialist retailer Guardian. Other brands such as Cosmoderm are actively focusing on developing skin care products that target acne, such as its Cosmoderm Tea Tree Oil skin care range. La Roche Posay’s Effaclar range is rapidly gaining in popularity among Malaysian consumers.

Demand for anti-aging products is growing in Malaysia, as more younger people start using them.

Brands that cater to both premium and mass audiences are increasingly focused on anti-agers, as more Malaysians are starting to use these products at a younger age. those who usually have a more sophisticated skin care routine at home.In 2021, Olay debuted its Olay ProX 3D Youth Essence, Olay ProX Retinol Essence and Olay ProX Fading Essence anti-agers. Wardah also launched its own skin care range-Wardah Crystallure Supreme. L’Oreal has Bio-essence Bio-Age’Luxe Retinoid which not only includes an eye serum but an eye therapy applicator as well. These device targeted serums are becoming more popular among the older demographic group. People want products that will help them look younger, and this drives up the price of skin care items since anti-aging products are usually more expensive than basic skin care stuff.

Fairly fragmented competitive landscape led by multinationals, while e-commerce continues to penetrate with new imports attracting consumers’ attention

There are many brands vying for a spot in the beauty and personal care landscape, but only a handful have double-digit value share. These include multinationals Procter & Gamble (who own premium-positioned SK-II, as well as mass-positioned Olay), and L’Oréal (whose labels Maybelline and L’Oréal Studio Line are both present in the premium segment). L’Oréal Dermo-Expertise is an affordable skin care option for middle-class consumers who want to try new products.

Recently, people have become more price conscious and are hesitant to spend extended periods of time in public spaces such as health and beauty retail establishments. With the added closures of department stores during lockdowns, consumers gravitated towards online shopping for both the convenience of home delivery and perceived safety concerns. Additionally, e-commerce offers a greater number of discounts that appeal to shoppers. More and more mass brands are selling their products online, either on third-party marketplaces like Shopee, their own websites, or through the online stores of big retailers in the health and beauty industry such as Watsons or Guardian.

Therefore, players and retailers focused their distribution strategies on e-commerce which led to collaborations such as between GrabMart a third party delivery service and skin care brands including Laneíge and Innisfree (AmorePacific Malaysia Sdn Bhd). To promote this service, both brands utilized social media pages such as Facebook. Gifts and free delivery were offered to those who spent over a certain amount. Aesop, from Natura & Co, was another store that looked towards e-commerce due to its reliance on in-store experiences; however, it decided to move online through Lazada’s LazMall in order to attract consumers who were shifting their spending during the pandemic as well as non-essential stores being closed down.

Many retailers are now using artificial intelligence tools, such as skin analyzers or readers, to emulate the relationship between store sellers and customers. These tools help determine the customer’s skin type and recommend a specific skincare routine. For example, health and beauty specialist retailer Watsons has a Facial Mask Finder that recommends facial masks based on skin type. Another example is Kiehl’s Instant Skin Reader, which helps customers choose the right products for their daily skincare routine.

PROSPECTS AND OPPORTUNITIES

Stronger demand for skin care predicted over the forecast period, initially driven by the mass segment due to high inflation

Skin care demand in Malaysia is expected to grow between 2022-2027, with strongest growth coming from the mass market segment. However, due to price sensitivity and rising inflation, premium segments may see slower growth or even decline in value share.

In the early months of 2022, a number of categories are set for stronger growth. This includes facial care such as face masks and acne treatments due to ongoing restrictions, including the wearing of protective face masks in public. This is also set to drive further demand for facial cleansers, moisturisers and treatments, and lip care. As Malaysians increasingly express interest in natural ingredients and skin care products with a natural positioning and mild formulations, Aiken from Wipro Unza has introduced its new Prebiotic Hydra Plus Express Skin Repair range. Nivea, too, has launched several new products to meet this demand: Nivea Aloe Vera Caring Lip Scrubs; Nivea Pop Ball Pink, containing watermelon and pomegranate; and a cleansing oil infused with natural macadamia oil, coconut oil and grape seed oil.

As the pandemic continues, people are increasingly focused on hand care, maintaining stringent hygiene routines like regular handwashing and using alcohol-based sanitizers. These trends will lead to strong growth in both volume and value terms for mass hand care products (at constant 2021 prices). Several products which have placed a greater focus on this area of skin care include Vaseline Intensive Care Advanced Repair Hand Cream, and St Ives Swiss Formula. The latter launched its new range of mass skin care at the end of the review period using natural ingredients such as cocoa butter, oatmeal and shea butter, acai and chia seed oil.

Further innovation in terms of formats and ingredients likely in order for players to offer differentiation in crowded landscape

There is also potential for further innovation in terms of formats as the skin care category continues to grow in Malaysia. Facial cleansing wipes was a small part of theskin care market at the end of the review period but has potential to attract urban, more affluent consumers who want time-saving and convenient solutions as part of their skin care regimes. It’s also probable that brands will continue to explore different ingredients, such as dermocosmetics brand Sebamed did with their launch of Sebamed PRO! Vital Serum. This product is infused with probiotics and stem cell extracts from coffee plants which the company claims can help reduce signs of fatigue and revitalize skin. The popularity of natural and organic skin care products has skyrocketed in recent years, and Malaysia is no exception. Aiken Prebiotic Hydra Plus Micellar Water, a product free from harsh chemicals like parabens, uses rice water for a gentler formulation. Dr. organic entered the Malaysian market at the end of the review period with official organic certification. Many consumers are interested in health and wellness, so products that use raw ingredients, vitamins, and minerals without harmful chemicals or mineral oils are likely to be appealing.

Further potential for mass brands to enter dermocosmetics to offer greater affordability

Over the next few years, we predict dermocosmetics will see more growth within skin care. People are becoming increasingly aware of how to better take care of their skin, including using products that protect against pollution and other external factors that can damage skin health. As a result, we can see that companies like Watsons, Guardian, and AEON Wellness are beginning to bring in more dermocosmetics products from overseas markets to meet this demand. However, an even greater number of mainstream brands such as Nutox are also now venturing into the production of dermocosmetics. The latter afford consumers much better access to these cosmetics due to their more affordable pricing models.

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