Cosmetics firms see beauty in Indonesian consumers

Thu Nov 8, 2012 2:16am EST
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By Neil Chatterjee and Andjarsari Paramaditha

JABABEKA, Indonesia (Reuters) - Vanya Sunanto never used any makeup until she was 25. But now, at 30, she uses 10 layers of cosmetics on her face every day.

Sunanto is one of the growing millions of young Indonesians that giant international firms such as L'Oreal and Unilever are targeting with increased investment this year in a variety of hair and skincare products.

"I love wearing them...These skincare products are still expensive but they really make a lot of impact on your skin," said Sunanto, a website account manager, who now spends a hefty $150 a month, or about a tenth of her salary, on cosmetics.

Sunanto has long had to import some of her "must-have" products, such as SKII Miracle Water, Clinique Moisture Surge and Cover Girl mascara, via the internet or friends travelling from abroad, since many are not yet available in Indonesia.

But that is starting to change.

L'Oreal, the world's top cosmetics firm, opened its biggest factory globally in Java this week, as it is seeing 30 percent sales growth and expects the country's beauty market to become the third biggest in Asia. Rival Unilever, the country's market leader, plans to expand its factories too, while local cosmetics firm Martina Berto is also building a new plant in Java.

Domestic demand from new middle class consumers, and investment to feed it, are now key drivers of Southeast Asia's biggest economy. Retail sales surged 22 percent in September, keeping economic growth above 6 percent, among Asia's strongest

"With this type of growth we constantly need to extend our manufacturing capability," said Peter Ter Kulve, chairman of Unilever Indonesia.   Continued...