TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Cosmetics industry disrupted by new players
Change Size
New players: New Indonesian cosmetic products marketed through social media like Instagram are unsettling established players like Mustika Ratu and Martina Berto. Polka, By Lizzie Parra (BLP), and Rollover Reaction, for example, are rising in popularity among makeup enthusiasts. (JP/Evi Mariani)
M
ajor players in the domestic cosmetics industry may have to move out of their comfort zones to stay competitive as new names have begun to disrupt the landscape, thanks to the internet.
Brands such as Polka, By Lizzie Parra (BLP), or Rollover Reaction, might all have sounded foreign five or 10 years ago among cosmetics enthusiasts, but these brands have recently become very popular, particularly on social media, and their presence has caught the attention of their more established peers.
Putri K. Wardhani, the chairwoman of the Cosmetics Companies Association (PPAK) and president director of publicly listed Mustika Ratu, acknowledged that the phenomenon of the internet had delivered new challenges to major business players.
The beauty industry plays a big role in boosting the country’s economy. There are presently 760 companies employing 75,000 people and sustaining an additional 600,000 jobs in related industries nationwide, according to data from the Industry Ministry.
“This is a challenge to all brands. The challenge is how to answer to market demand and adapt to drastic lifestyle changes,” Putri told The Jakarta Post recently, adding that higher internet literacy rates and an expanding social media presence in society were potential engines for growth and profits.
As the internet develops, the total number of internet users climbs as well. Indonesia has 100 million internet users — compared to 55 million in 2011 — and many of them have various new products at their fingertips.
New brands mushroom constantly and their attractions are displayed on numerous social media forums, such as Instagram and Facebook.
It does not hurt that people have more money to spend either. Gross domestic product per capita stood at US$11,035 in 2015, an increase of more than three times compared to 1990, according to the World Bank.
Newcomer Polka, for instance, relies heavily on the digital world to sell its products. The company believes that online marketing is the best tool to reach what it calls a “borderless market”. Its lip lacquer — a liquid lip color that creates a glossy look — hit the market last year and has sold like hotcakes among teenagers.
Tiara Adikusumah, the co-founder of Polka, said the company’s products were halal and “cruelty-free”, claiming that the products were processed without harming animals.
The power of social media has also surprised makeup-artist-turned-beauty guru Elizabeth Parameswari, who launched her own cosmetics brand BLP with initial capital of Rp 500 million ($37,988) in June.
After marketing her products online via Instagram and her website, Elizabeth sold around 10,000 pieces of her eight initial lip coat products in less than two months.
She is now in the process of doubling production and gearing up to launch 10 new products.
Meanwhile, for other major players, the only thing to do now is to be creative, especially given the fact that sales have been largely flat over the past few years, as shown by their financial reports.
Mustika Ratu only saw a 5.35 percent increase in sales from 2011 to 2015, while Martina Berto booked a measly 7.15 percent rise in sales during the same period.
“We can’t ‘sleep’ amid tight competition, even for a second. We need to be creative to maintain our market share,” Martina Berto corporate secretary Desril Muchtar said.
The publicly listed Martina Berto claims to control a 7 percent market share in the decorative makeup segment through several brands such as PAC and Sariayu. (mos/vps)
