Southeast Asia and India will be the most lucrative growth markets for luxury beauty in Asia Pacific, according to latest report from LUXASIA and Kearney
SINGAPORE, Oct. 12, 2023/PRNewswire/ -- Global consulting firm Kearney and LUXASIA, Asia Pacific's leading omnichannel brand builder, recently released a whitepaper titled "Unlocking hyper-growth in Asia's luxury beauty landscape." in Asia's luxury beauty landscape), highlighting the opportunities, challenges and solutions for luxury brands in Asia. Reveals that Southeast Asia (SEA) and India are poised to be the next “gold rush” in luxury beauty, reaching a market potential of US$7.6 billion by 2026, with a projected CAGR of 11% between 2021 and 2031. This strong growth is expected to continue and the market size is expected to almost triple within 10 years.
Unlike China, Japan, Singapore and South Korea, other markets in Southeast Asia and India are relatively unsaturated, with a limited presence of both international luxury beauty brands and attractive local brands, and significant growth potential. of luxury beauty spending per capita. As these economies mature, the upper and middle classes are expected to exceed one billion people by 2026, and more consumers are expected to shift from mass consumption to luxury. This therefore presents a limited but golden window of opportunity for luxury beauty brands to come in now and flourish.
However, harnessing growth remains difficult in Southeast Asia and India due to diverse market ecosystems. Luxury brands today face six main challenges in this fragmented region, including multidimensional omni-commercial networks; heterogeneous preferences for local products; divergent marketing approaches; challenging regulatory frameworks; costly and idiosyncratic supply chain landscapes; and partner selection amid information asymmetry.
Accordingly, the report outlines six implementation imperatives to effectively address these challenges. These include optimizing the retail footprint to create experience centers with multiple touchpoints; take advantage of the continued growth of e-commerce unique to each market; build capabilities to take advantage of the acceleration of social commerce; develop a deep understanding of local consumers through data aggregation and analysis; leverage logistics partners to build a strong and flexible network; and win with the right omnichannel partners for brand building.
Siddharth Pathak, senior partner, head of Asia Pacific retail and consumer industries at Kearney, said: "Southeast Asia and India should be on the agenda of every luxury beauty CEO globally, as these markets are poised to lead the next stage of growth in the luxury beauty sector. To successfully emerge in a competitive landscape, brands must have a coherent strategy to leave the noise behind and harness the power of digitalization, analytics data and ecosystem support to improve their offerings and overall resilience."
Dr Wolfgang Baier, Group CEO, LUXASIA affirmed this and commented, "This golden window to capture accelerated growth cannot be wasted. New brands must act urgently to ensure platform growth. Existing brands in the market should rejuvenate their omnichannel presence, adding greater operational agility, to better navigate market developments. Backed by our track record, deep omni-network and brand-building expertise, LUXASIA is ready to partner with all luxury beauty brands to achieve long-term growth and success in Southeast Asia and India.
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