Indonesia Online Beauty and Personal Care – Local Charms

1. Indonesia Online BPC – a multi-billion dollar opportunity by 2025

Indonesia overall BPC market decreased by double-digit % levels between 2019 & 2020. The share of categories such as Bath & Shower, Skincare and Haircare increased while categories such as Men’s Grooming & Colour Cosmetics decreased between the years 2019 & 2020. The category is expected to be back in growth going forward.

Interestingly, the Online BPC Market has grown at double-digit levels between 2019 & 2020. it is expected to sustain this growth trend to hit multi-billion dollar size by 2025.

2. Indonesia’s BPC market is poised for steady growth, as the lower BPC spend per capita versus China and the US provides significant headroom

Indonesia’s BPC spending ~60% of the spend in China and 15% that of the US. Hence, there is significant headroom for higher BPC expenditure over time. We noticed that Indonesia’s per capita online BPC spending was moderately impacted (due to Covid) during 2020 and 2021. During this period, the share of spend on Personal care increased slightly, at the expense of Beauty.

3. Local Indonesian BPC brands are gaining traction and expected to maintain their winning streak

The share of local Indonesian brands in the BPC Market has steadily increased vis-a-vis the International brands during 2019 and 2020. We expect this structural shift to continue in the foreseeable future.

4. Online search and social media have the highest influence in creating product awareness

Consumers build their awareness of new Beauty & Personal care products/brands mostly through online search / social media platforms. Ads on eCommerce websites are the second-largest method of product & brand awareness for the customers. TV is the third most relevant medium for Product & Brand awareness in the Beauty & Personal care category.

5. Top factors that influence buying behavior are price, trust and website reviews

Price / Promotion is the top factor for customers’ purchase decisions. Product Assurance & Website reviews are the other two aspects relevant for customers’ buying decisions. This indicates that product research is necessary pre-purchase step and that product quality ranks high on purchase consideration.