New research has shown that the Asia-Pacific (APAC) health and beauty market is experiencing rapid expansion driven by innovations in macroeconomic conditions, new product launches, a rise in online shopping, and increased manufacturer investment.
According to Global Data, personalised, natural, organic, and multi-functional products will be significant factors propelling the category's market premiumisation.
With a projected compound annual growth rate (CAGR) of 4.7 percent from 2022 to 2027, APAC was the largest regional market for health and beauty products in 2022.
Men's toiletries, in particular, are anticipated to gain the fastest value CAGR at 7.7 percent over the forecast period, followed by fragrances.
Shraddha Shelke, Consumer Analyst at GlobalData, explained that the APAC economy was recovering from the brunt of COVID-19 and the cost-of-living crisis, powered by rising demand in China, India, and other emerging economies in the region.
"Rising household disposable incomes, surging public outdoor activities, and the increasing foreign tourist influx are fuelling demand for premium health and beauty products," said Shelke.
Shelke continued that e-commerce sales were on the rise, with startups and major corporations launching direct-to-consumer health and beauty brands, making e-retail the leading distribution channel in 2022 in the APAC health and beauty industry, surpassing hypermarkets, supermarkets, and convenience stores."
This e-commerce preference directly reflects changing consumer spending habits due to the pandemic, a habit that is anticipated to remain. As a result, manufacturers are expected to step up their social media and online presence and adopt novel technologies to attract these digitally savvy consumers.
The rising penetration of e-commerce and social commerce will be crucial for growth opportunities and brand success and is expected to drive the APAC health and beauty industry's value sales growth through 2027.
Shelke said that Procter & Gamble was the leading manufacturer in 2022 in the APAC health and beauty industry, followed by Unilever and L'Oréal.
"However, these multinational companies (MNCs) face stiff competition from domestic startups and brands that adapt more agilely to fluid consumer preferences."
The consumer desire for locally made and sourced products is a crucial opportunity for capitalisation, especially when assessing millennial and gen z consumers.
