Emphasis on natural ingredients ‘advantage for Thai cosmetics-makers’
The Thai beauty market will grow at 9% to 9.3%, but Thai entrepreneurs must use more research and innovation to offer scientific evidence about their products, the Trade Policy and Strategy Office (TPSO) said.
Cosmetics exports are a significant contributor to the Thai economy, generating an average annual revenue of 70-80 billion baht, making the cosmetics industry one of the top five sectors contributing to Thailand’s GDP.
France, considered the global leader in the beauty industry, with many reputed cosmetic brands, was the world's No. 1 exporter of cosmetics, totalling $10.7 billion, which accounted for 15.6% of global market share.
France has consistently invested in research and development and established the Cosmetic Valley in 1994. This initiative was a collaborative investment between the private sector and the government, specifically from the association of cosmetics, perfume, and healthcare product producers.
Thailand is one of the largest markets for skincare and cosmetics in Southeast Asia. In 2022, the beauty market in Thailand was valued at over 246 billion baht, with exports accounting for 28% of domestic production. Major export destinations included Japan, the Philippines, and Vietnam.
Thai cosmetic brands are gaining increasing recognition and popularity both domestically and internationally. Brands such as Mistine, Srichand, and 4U2 are known for their affordability, innovative products, and attractive packaging. There is also a growing consumer preference for cosmetics with natural ingredients, giving Thailand a competitive edge, the TPSO report said.
TPSO director Poonpong Naiyanapakorn said Thailand’s geographical advantage allows for a rich diversity of herbs and natural resources that could be used in the cosmetics industry. This creates opportunities for the Thai cosmetics market to grow from a solid customer base. The Thai Cosmetics Association aims to push the government to promote Thai cosmetics as a form of soft power in the future.
Poonpong said that the TPSO has been monitoring the trends in the beauty and personal care sector, including cosmetics, skincare products, body care products, oral care products, and perfumes. These sectors have shown continuous growth in both the domestic and international markets. In 2022, the domestic retail market for cosmetics was valued at 25.953 billion baht, a 12.1% increase over the previous year. In 2023, it was expected to reach 28.651 billion baht, a 10.4% increase year on year.
"The beauty and personal care market is highly attractive with significant growth potential. Thai entrepreneurs have strong manufacturing capabilities, with many factories producing for renowned international brands. Additionally, Thailand's wealth of herbal resources provides unique ingredients for various cosmetic products," Poonpong said.
However, Thai manufacturers and entrepreneurs must prioritise research and development, utilising advanced technology and innovation, and ensuring credible scientific evidence for their products. Developing recognisable brands that meet changing consumer needs, such as environmental and community concerns, is also crucial. Utilising technology for marketing communication to create new consumer experiences is essential, Poonpong added.
