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In the past decade, more than 26 million people in Malaysia have grown to use the internet, and 80 percent of users 1 between the ages of 16 and 64 are shopping online. While ranking fifth in the world2 for eCommerce growth rates, Malaysia’s cosmetics market also saw 6% current value growth in 2018, reaching MYR1.1 billion.
Focusing on market changes and consumer demands, we’ll be zooming into three of the largest trends in the eCommerce cosmetics market in Malaysia, as well as how you can make the most out of them. We’ll also give examples from successful brands, and examine what they’ve done to sustain a strong consumer base in one of Southeast Asia’s largest economies. But first, having an overview of Malaysia’s cosmetics eCommerce market always helps.
Like its neighbouring counterparts, online shopping has made international brands accessible to more Malaysians, which they love. Additionally, Malaysia’s GDP per capita is the third-highest among ASEAN nations3. Because of that, this Southeast Asian ‘Tiger Cub’4 economy is a popular choice for eCommerce merchants to expand into in order to gain market share.
Furthermore, eCommerce spending grew by 24 percent in 2018, and with the country’s government making the growth of the online economy5 a national priority, it’s likely that Malaysia will continue to enjoy strong growth in online shopping over the coming years.
While the average unit price6 of cosmetics remained steady in most categories in current terms in 2018, L’Oréal maintained its lead in cosmetics in 2018 with a 23% value share. For the next few years, cosmetics is anticipated to see a 7% growth rate to reach MYR1.5 billion in 2023.
In addition, with a rising number of younger Malaysians who are exposed to international travel experiences7, there will be more consumers who are interested in trying out foreign brands they encounter during their travels. This is likely to lead to a larger number of international players entering the competitive landscape in the mass cosmetics market in Malaysia.
Furthermore, consumers opting for mass cosmetics products tend to be more price-conscious, which makes them more likely to purchase during sales periods7 or during any form of promotion. Hence, to stand out from the increasing competition, promotional pricing will also remain a crucial marketing tactic for you to compete.
Some of the largest existing brands in the Malaysian cosmetics market7 include Maybelline (13.7%), Mary Kay (8.1%), Silkygirl (6.1%). On the other hand, when we look specifically at premium cosmetics brands, we’ll see that brands such as Mac (8.4%), Estee Lauder (8.3%) and Artistry (6.2%) have the most market share.
For more information like this on Malaysia’s Top eCommerce Product Categories, check out our Malaysian eCommerce insights and shipping tips resources.
Now that we know the strength and potential of the eCommerce cosmetics market in Malaysia, let’s deep dive into the three main consumer trends driving the market.
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According to the work-life index published by technology company Kisi, Kuala Lumpur has the worst overall work-life balance8 among 40 major cities in the world. Other Asian cities ranked relatively low as well, with Singapore, Hong Kong, and Tokyo placing 32nd, 35th and 39th on the list respectively.
With the rising numbers of Malaysians leading active and busy lifestyles, more consumers are looking for smaller packaging sizes9 and squeezable tubes that are convenient to be carried around when travelling.
One innovative example is Revlon’s recent launch of several face make-up products in squeezable plastic tubes9 to cater to consumers who are constantly on the go. Revlon PhotoReady Candid even has an airless lotion pump attached to the squeezable plastic tubes to enable easy application by users, while the small 30ml tube pack type is smaller and lighter than the previously used glass packaging.
According to Euromonitor, smaller-sized squeezable plastic tubes9 and rigid plastic containers with unique closures are expected to continue to attract consumer interest. This will mainly be due to Malaysian consumers with increasingly busy lifestyles looking for products that can be carried around with them and easily applied.
In addition, unique packaging design9 continues to be a crucial distinguishing factor for cosmetics players to remain competitive. For example, Maybelline Master Flush Stick was also launched with a unique packaging design that enables easier application. The product combines the blusher with a soft sponge applicator on two ends of the blusher, eliminating the need for carrying a blusher and sponge separately for application.
Bold colours and unique designs with more practical functionality that save space are expected to remain trends in the cosmetics industry. This could be because of the large number of good brands in the saturated market, necessitating Malaysian consumers to have to differentiate them via other means.
For eCommerce merchants, packaging with attractive visuals could be even more pertinent to attract consumers since they are not able to touch and feel your product -- which is one of the greatest benefits of having a brick-and-mortar outlet10. However, by having clear images or videos that show your product features and packaging, as well as the sizing dimensions of your product, you’d be able to overcome this drawback.
In addition, there are also other factors to ensure a smooth eCommerce experience for your consumers that can help to keep them coming again and again, even without a physical presence in the country. For instance, timely delivery and undamaged parcels are some of the most important things to maintain a good reputation among your customers.
Logistics service providers who are well-acquainted with Malaysia’s culture and shipping regulations can also simplify much of your cross-border shipping process and ensure a great experience for your customers, making it easier for you to start expanding your cosmetics eCommerce business in the country.
Cosmetics products with skincare benefits6 are increasingly popular and demanded by consumers, since they are cost-saving and time-saving. Furthermore, with the emergence of more sophisticated consumers all around the world, there is definitely higher demand for products with more benefits than just for makeup purposes.
For example, the newly introduced Sulwhasoo Perfecting Cushion EX is a sheer, long-lasting gel cushion that contains sea buckthorn berries. This ingredient is packed with antioxidants and provides skin care benefits such a radiant complexion.
Another example is the latest Laneige Skin Veil Base, a foundation which helps to correct skin tone with Dual Calibration System, made up of both Yellow Calibration System and Vitamin Calibration System. Vitamin Calibration System mainly comprises a strong antioxidant effect from the super berry extract it contains, which helps to promote a bright, toned effect.
Due to rapid urbanisation, the changing air quality in Malaysia has led to a rise in demand for anti-pollution skincare to prevent further damage to their skin. Different colour cosmetics6 with features such as promoting a flawless finish and anti-pollution are also expected to attract a considerable amount of attention from consumers in Malaysia.
Additionally, as Malaysia has a tropical climate with sunny days all year round, locals tend to have long exposure to sunlight. Certain K-Beauty brands like Etude House12 have incorporated sunscreen to their foundation or other cosmetics products so that consumers would be drawn to the two-in-one feature of their product.
As many of these multi-purpose cosmetics products come from newer brands in Korea, this proves that innovation is important to remain relevant to your consumers, even as a foreign brand. When asked about why Malaysians are attracted to using Korean beauty products, 54% of respondents13 said that they found the K-Beauty products are more suited to their skin. 48% also thought that K-Beauty products are more effective and produce better results than other products, in addition to having a wider variety for different needs.
To gauge the behavior of your customers and to better understand their demands, it might be good to start off your business through cross-border eCommerce before entering the country physically. This is because having an online business and choosing cross-border shipping can save you tons of money that you would spend on sunk costs like rental and warehousing costs if you were to physically establish a presence in Malaysia. You can also find more insights into Malaysian eCommerce and how you can use cross-border shipping to reach them in our Malaysia eCommerce and Shipping guide, updated for 2020.
Overall, it would be good to combine multiple features into your cosmetics products, such as having anti-pollution or sunblock, to gain traction in the market. As consumers have many brands to choose from, this is definitely one good way to stand out from your competitors.
While there is an abundance of cosmetic brands in the market, there used to be limited choice for Muslim women who prefer halal cosmetics. Times have changed with halal cosmetics and personal care products emerging as the fastest growing consumer segment14 for Malaysia, according to a report in 2016 on the Ministry of International Trade and Industry website (MITI).
The Halal Industry Development Corporation (HDC) has stated that there are currently more than 100 certified halal cosmetics and personal care companies. Amara Halal Cosmetics (USA), Inika Organics (UK), Talent Cosmetics (South Korea), Tuesday In Love (Canada), Momohime Skincare (Japan) and Wardah Cosmetics (Indonesia) are among the brands which are forging paths in halal beauty15.
This trend of increasing demand of halal products also exists in other industry verticals, such as in modest wear fashion and skincare. In a survey conducted to understand perceptions towards cosmetics products in Malaysia, it has been reported that all of the Muslim participants showed a positive perception toward halal certification16. Muslim participants also found that it is a vital factor for Muslim consumers to consider whether or not a cosmetics product is halal prior to making the purchase.
It is believed by some users who have cosmetic products on during perform prayers, cosmetic products used by Muslims should be halal. This is especially important for working women who need to pray while having makeup on. With 61%17 of Malaysia’s population being Muslim, it would be good for your product to be halal-certified when entering the country, so that you can appeal to both Muslims and non-Muslims alike.
When it comes to consumer demographics, we can also examine the age group of the users in Malaysia. As the largest age group of eCommerce personal care users falls within the 25-34 age group at 30%18, there exists certain ways you can reach out to Muslim millennials specifically.
For instance, brands can make use of social media advertising to appeal to Muslim millennials, especially by partnering with popular social media influencers in Malaysia known for their beauty tips. Some examples are Ameera Khan and Elfira Loy who both have millions of followers on Instagram and are Muslim women themselves.
Social media marketing can be much cheaper than traditional means of marketing such as television advertising. Because of how visual some cosmetics products can be, such as lipstick or eye shadow, they are great for bloggers and vloggers to do online tutorials11.
Additionally, since Malaysia has a very high mobile social media penetration rate that ranks top 5 globally19, and is the highest in the region, partnering with social media influencers might make it much easier for you to tap on the large following that they’ve already attained.
Furthermore, on a global scale, beauty was the third-most-searched topic on Google in 2016, and the number of views of beauty videos on YouTube rose by 67 percent from 2015 to 2016. With more than 1.5 million beauty videos (accounting for 4.6 billion views) uploaded each month on YouTube, cosmetics products particularly appeal to the selfie generation because of their visual nature.
By engaging with consumers—mostly millennials—directly through social media rather than traditional advertising, challenger brands have created a new way of marketing20. It is more than transactional; rather, it is about creating a relationship.
Encouraging the exchange of product experiences via Facebook, Instagram, and YouTube is a powerful way of building a community around a brand and can help to enhance its perceived quality20. By encouraging these practices, brands cultivate the sense that consumers are present at the creation. Importantly, this new approach to marketing allows born-digital players to charge relatively high prices.
Therefore, while demand for halal cosmetics is rising, it still remains important to be able to market your product to the right consumer segment. One way to do this is to partner with Muslim beauty social media influencers for tutorials or other such video content to engage millennials, the largest age group of eCommerce personal care consumers in Malaysia.
To wrap up, by understanding who, what and how your potential customers in Malaysia’s cosmetics market shop online, you might be able to better appeal to your target segment. While Malaysia may appear as a saturated market with many strong foreign brands in the market, the cosmetics market is still a growing one that provides many opportunities for newer merchants to enter the market, especially if you’re able to meet the demand of locals -- as several K-Beauty brands have proven.
Delivery is still an important part of the eCommerce experience. If you’re sourcing your cosmetics supplies from beyond Malaysia, it’ll be helpful to find a shipping partner to help you with getting these eCommerce products delivered on time and on target to your Malaysian customers.
Popular eCommerce platforms and experienced logistics service providers who are well-acquainted with Malaysia’s shipping rules and regulations can also simplify much of your cross-border shipping process, making it much easier for you to start expanding your business in the country.
As a whole, if you’re looking to better understand the consumer trends behind this market, it’ll be good to look at what the young consumers are talking about on social media, and cosmetics influencers who are admired by many. By also looking at what foreign brands who have succeeded in this market have done, you might find it easier to gain your potential customers’ support by replicating similar methods.
If you’re also interested in Malaysia’s skincare market trends, you might want to check out our article covering three major skincare eCommerce trends in Malaysia or our Health and Beauty series below!
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