Despite the phenomenal growth of e-commerce during and after the COVID-19 pandemic, the premium beauty sector in Southeast Asia is experiencing notable growth within physical retail environments through collaboration with omnichannel brand-builders. GlobalData, a leading data and analytics company, says companies can adapt to this trend and position beauty as a significant revenue driver in their retail strategy.
Jaya Dandey, Consumer Analyst at GlobalData, comments: “The premium beauty sector in Asia’s physical retail is thriving, driven by a combination of strong consumer demand, innovative retail strategies, and an increasing emphasis on personalized shopping experiences. The high single-digit growth rates of prestige beauty categories is notable even in the context of broader retail performance, where beauty products are often seen as high-margin categories that outperform other areas such as food sales.”
Tim Hill, Key Account Director, SE Asia, GlobalData, notes: “Consumers are becoming more discerning, not only regarding product quality, but also in terms of the shopping experience. They like to try multiple products in person before making an informed choice, especially in the premium domain where prices can run high. Though companies are eager to leverage these consumer preferences and enter the market, they sometimes face infrastructural challenges. A key strategy to overcome this is to partner with omnichannel players such as beauty ecommerce giants, which are increasingly moving into the physical retail space. Individual consultation stalls in these stores promote customer engagement with a wide variety of brands. “The ability to integrate online and offline experiences will be vital for survival in this rapidly changing landscape. Maintaining a robust omnichannel presence allows retailers to connect with consumers across various platforms, including online and physical stores. This strategy not only caters to different shopping preferences but also ensures that brands remain accessible to a wider audience. A hybrid approach allows these companies to leverage their online success while maintaining a physical presence, creating a seamless shopping experience for consumers. “Southeast Asia is home to a burgeoning upper middle class, who are eager to splurge on luxury beauty. They are more aware of international brands, and given their higher disposable incomes, they are willing to spend on premium beauty products. GlobalData 2024 Q2 Consumer Survey reflects this, wherein about 25% of respondents deemed low price as good value for money while purchasing beauty and grooming products, and a much higher 34% responded that high-quality ingredients represent more value for money.” Luxasia, Southeast Asia’s leading network in beauty and luxury, has enabled market entry and penetration for several brands. It recently captured the Vietnamese market by launching escentials, an omni-retail concept for luxury fragrances, in one of the country’s prestigious malls. Similarly, premium skincare brand SK-II launched a unique concept store at the Mid Valley Megamall in Kuala Lumpur, Malaysia. Indian beauty ecommerce giant Nykaa is actively expanding its physical retail spaces across the nation. Dandey concludes: “By returning to the essentials of the beauty industry—where sensorial experiences are paramount—brands can cultivate customer loyalty in a competitive market. As the premium beauty sector evolves, embracing omnichannel strategies and personalizing experiences will not only ensure success but also foster enduring relationships with discerning consumers, shaping a vibrant future for beauty retail.”
