Indonesia Beauty & Personal Care Market outlook to 2028

Indonesia Beauty & Personal Care Market Overview

• Indonesias beauty and personal care market is undergoing significant growth, reaching a market size of USD 9.10 Bn driven by increasing consumer awareness of personal grooming, rising disposable income, and a shift toward premium products. With a population of over 270 million and a growing middle class, the demand for a wide range of beauty products, from skincare to cosmetics, is surging. This has made Indonesia one of the most dynamic markets in Southeast Asia, attracting both local and international players.

• The market is primarily driven by major urban centers like Jakarta, Surabaya, and Bandung, where consumer spending on personal care products is highest. The beauty-conscious urban population is not only interested in basic personal hygiene products but also premium skincare and cosmetic brands. The rise of e-commerce platforms and social media influencers has also contributed to the growing popularity of beauty products among younger consumers.
• Indonesia's 2014 Halal Product Assurance Law mandates that all beauty and personal care products sold in the country must be halal certified. As of 2023, over 95% of beauty products sold in Indonesia have complied with this regulation. This has created opportunities for both local and international companies to capture the Muslim consumer segment. The Indonesian Halal Product Assurance Agency (BPJPH) is actively working with companies to streamline the certification process and ensure adherence to halal standards.

Indonesia Beauty & Personal Care Market Segmentation

• By Product Type: The market is segmented into skincare, hair care, makeup, fragrances, and hygiene products. Skincare holds the largest market share, accounting for over 35% of total sales, driven by the demand for anti-aging, moisturizing, and skin-brightening products. The hair care segment follows closely, fueled by increasing demand for shampoos, conditioners, and hair treatments, particularly those tailored for tropical climates. Makeup and fragrances are also witnessing robust growth, supported by the rising influence of beauty influencers and social media trends.

• By Distribution Channel: The market is also segmented by distribution channels, including offline and online platforms. Offline retail, which includes department stores, specialty stores, and supermarkets, still dominates the market. However, online sales are growing at a rapid pace, driven by the rise of e-commerce platforms such as Tokopedia, Shopee, and Lazada. In 2023, online channels accounted also expanded in the total beauty and personal care sales, a trend that is expected to continue as consumers shift to the convenience of online shopping.

Indonesia Beauty & Personal Care Market Competitive Landscape

The Indonesia beauty and personal care market is competitive, with major players including global brands and local companies that cater to specific consumer needs, such as halal-certified products. Companies like L'Oral, Unilever, and Procter & Gamble dominate the market due to their extensive distribution networks, brand loyalty, and innovation in product offerings. Local brands such as Wardah and Mustika Ratu also hold significant market share, primarily due to their focus on halal-certified products, which appeal to the country's Muslim-majority population.

Indonesia Beauty & Personal Care Market Industry Analysis

Growth Drivers

• Increasing Middle-Class Population: Indonesias growing middle-class population is a significant driver of the beauty and personal care market. As of 2024, Indonesia has 47 million people in the middle-income category, projected to expand further due to robust urbanization trends. This population segment is increasingly spending on non-essential items like beauty and skincare products. The consumption expenditure in Indonesia was recorded at USD 843 billion in 2023, with beauty and personal care contributing significantly to the total consumer goods market. This upward trajectory indicates strong demand growth for beauty products among middle-income consumers.
• Rising Disposable Income: Indonesias rising disposable income plays a pivotal role in driving beauty and personal care consumption. According to the World Bank, Indonesia's GNI per capita for that year was reported at USD 4,580, reflecting an increase from USD 3,870 in 2022. As more disposable income flows into the economy, consumers are allocating higher spending toward discretionary goods like premium beauty and personal care items. This economic shift has made Indonesia a lucrative market for both mass and luxury brands, enhancing the overall market dynamism.
• Shift Toward Premium Products: With rising incomes and increasing awareness of global beauty trends, Indonesian consumers are shifting toward premium beauty and personal care products. This shift is evident in urban areas such as Jakarta and Surabaya, where modern retail and luxury beauty brands have established a strong presence. Household final consumption expenditure on personal care products increased substantially in 2023, showing a steady increase compared to the previous year. The increasing disposable income has made high-end skincare, cosmetics, and personal care brands more accessible to a wider audience.

Market Challenges

• Increasing production of Counterfeit Products: The influx of counterfeit beauty products in Indonesia poses a significant challenge to legitimate market players. Counterfeit items, commonly found online, create confusion for consumers attempting to distinguish between authentic and fake products. These fake goods, often sold at significantly lower prices, undermine the reputation of premium brands, resulting in reduced consumer trust and damaging brand value. The prevalence of counterfeit products hampers the overall markets growth by diverting revenue from legitimate businesses and diluting brand integrity.
• Regulatory Barriers (Market Compliance): Indonesia's beauty and personal care industry encounters regulatory hurdles, especially concerning compliance with local manufacturing and import laws. The Indonesian National Agency of Drug and Food Control (BPOM) strictly monitors product safety, labeling, and halal certification, making it challenging for companies to navigate the regulatory landscape. This process often results in delays for new product launches, especially for international brands unfamiliar with local requirements. The complex compliance framework places additional pressure on companies to ensure they meet stringent safety and labeling regulations before entering the market.

Indonesia Beauty & Personal Care Market Future Outlook

The Indonesia beauty and personal care market is expected to continue its upward trajectory through 2028, driven by rising consumer demand, increasing urbanization, and the growing influence of digital marketing. With more consumers becoming aware of personal grooming and beauty trends, the market is set to witness sustained growth. Additionally, the demand for natural and halal-certified products is expected to remain strong, offering lucrative opportunities for both local and international brands.

Future Market Opportunities

• Growing Demand for Natural and Organic Products: There is a growing consumer preference for natural and organic beauty products in Indonesia. In 2023, 30% of beauty product launches were labeled as natural or organic, signaling a shift in consumer awareness regarding ingredients. The trend toward organic and chemical-free products has prompted local and international brands to expand their portfolios with eco-friendly formulations. Indonesias rich biodiversity, which includes thousands of plant species, offers local manufacturers a unique advantage to cater to this demand through indigenous ingredient sourcing.
• E-commerce and Digitalization: E-commerce is a significant growth avenue for Indonesias beauty and personal care market, with online sales accounting for around 23% of total beauty product sales in 2023. The widespread availability of smartphones and the penetration of internet services (with 66% of the population having internet access) have boosted digital sales channels, particularly for beauty products. Leading platforms like Tokopedia and Shopee are offering brands an opportunity to reach a broader consumer base, particularly in tier-2 and tier-3 cities, where brick-and-mortar stores may not be prevalent.