Beauty Trends in Asia 2022 – Living through the age of inflation and recovery

Our latest report illustrates the macro environment in key APAC beauty markets, and takes a deep dive into how these twin forces drive consumer decisions.

Worldpanel by Kantar has released its latest annual Beauty Trends in Asia report, unveiling the insights behind beauty shoppers’ decisions. Covering nine Asian markets – Mainland China, South Korea, Taiwan, Thailand, India, Indonesia, Malaysia, the Philippines, and Vietnam – it looks at trends in the facial skincare, colour cosmetics, hair care and body care categories.

Asian consumers are known for being agile and adaptable in the face of change. Never has this been more vividly demonstrated than in the last year. Like much of the world, the APAC region has been under the influence of two major forces – inflation, and post-pandemic recovery. 

Learning to live with inflation

The inflationary surge isn’t being felt as hard across Asia as it is in the US, EU or UK. The rate of inflation rate has gone as high as 9.6% in the EU, and 9.1% in the US, compared to 7.7% in Thailand – the most impacted market in our study – and just 2.5% in Mainland China.

In Mainland China, South Korea, Taiwan and Thailand inflation is a relatively new phenomenon, and is giving rise to more extreme behaviours than can be seen in most South-East Asian markets. Consumers there are familiar with the experience of rising prices, and are likely to be more adaptable in their purchase patterns. 

Post-pandemic positivity

The factors affecting the beauty sector are not all negative. The end of the pandemic in most markets has been a positive for many shoppers. People want to celebrate. Beauty, a key element in the joy of going out again, has benefited. 

As a result, the market is almost stable: in Q2 of this year data from Kantar’s household panels revealed a drop of just 0.1% in total beauty spend compared with the same quarter in 2021.

In the Beauty Trends in Asia 2022 report, we look at three key trends, through the lens of the specific markets in which they are particularly strong: 

• Sophistication in affordable beauty in Malaysia, the Philippines, Thailand, and Vietnam 

Here we see value decline year-on-year based on the relative levels of inflation in each market, with drops in sales of between 1% and 5%. Consumers can be won even here, however, with brands willing to lower trial barriers and make affordable beauty a reality. There remains a desire to try new formats and products. 

• Continuous premiumisation in Mainland China and Taiwan
  

Despite minimal inflationary pressure in Mainland China (3.6%) and Taiwan (2.5%), rising concerns about the pandemic and mobility constraints caused by the lockdown led to a 5% drop in value sales in Taiwan and -1% in China for the year ended June 2022 compared to the previous year. In both markets, mask-wearing is still mandatory in public spaces. However, it appears that some facial skincare categories are being picked up by shoppers as the ‘new lipstick’, to satisfy their desire for a little bit of luxury even while their daily lives are disrupted, and disposable income decreases.  

• Resilient beauty in Indonesia, South Korea and India

With total value growth of between 5% in Indonesia and 8% in both India and South Korea, these markets did experience inflation but benefited more from the post-pandemic lift. As a result beauty purchases continued to rise. The challenge for brands here is to determine what beauty add-ons will encourage consumers to drive further growth.

Asia is not a homogeneous region. Inflation may be changing consumer behaviour and priorities, but it’s doing this in different ways in different markets. 

The counter-trend to inflation is, of course, post-pandemic optimism, with consumers eager to make new memories and get out once again. 

The impact of inflation depends on local shoppers’ experience of rising prices, while the post-pandemic bounce will be influenced by how restricted consumers were during peak moments of concern.

Understanding the balance between these two opposing pressures is critical to knowing where to invest the marketing budget, and which messages are likely to be most engaging. 

Read the report