What ingredient transparency can do to boost beauty product growth

Consumers demand clarity on ingredients, driving market expansion.

The beauty industry in Asia is growing, thanks to a shift in consumer preferences toward ingredient transparency and simplicity in product formulations. Industry experts noted that consumers are now more educated and selective about the products they purchase, emphasising the importance of knowing what goes into their skincare routines.

Egle Tekutyte, Consultant for Product and Innovation at Euromonitor International, highlighted that "ingredient transparency and ingredient formulation are desired skin care features, and they're growing in importance for consumers, both globally and specifically in Asia Pacific." 

This trend is supported by data showing that consumers in the region are willing to pay 10 to 20% more for products containing natural and premium ingredients. Tekutyte added, "Consumers are caring more and more about their health and overall wellness, and this drives this ingredient-led beauty market to grow."

Annie Yao, Head of Growth for Market Intelligence at Flywheel Southeast Asia, said that the rising level of education about ingredient efficacy is a key driver. "Consumers have been adopting a lot of different things, a lot of different products, a lot of different brands," Yao explained. "It's essentially also, I think, a shift towards simplification, as in, consumers are looking for something that helps them to simplify what they are applying on their faces." 

Kenneth Carsula, Manager of the Interactive Solutions Division at YCP, agreed that the beauty market in Asia is on a "hockey stick growth" trajectory. He attributes this to "new launches of beauty products, left and right, new innovation and ingredients, among other things." 

Carsula emphasised the unique aspects of the Asian market, where "skin problems vary per individual," and the availability of targeted information has allowed consumers to better understand their skincare needs. This has led to a broader acceptance of skincare routines across all genders and an increased focus on addressing specific skin issues.

The importance of ingredient transparency extends beyond product formulation. It is also crucial in how brands market their products. "Having access to information on ingredients has definitely helped drive the growth of beauty products," says Carsula. He noted that platforms like TikTok, Instagram, and Facebook have "shortened the purchase journey of customers," making it easier for consumers to make informed decisions quickly. 

For instance, TikTok data from the Philippines shows that 64% of users searched for more information about beauty brands after seeing them on the platform, demonstrating the impact of transparent marketing.

"In India, among Indian consumers, ingredient transparency is more and more appreciated," Tekutyte said. Brands are increasingly listing key ingredients prominently on product packaging to better communicate with consumers.

However, the growing demand for transparency also brings challenges. "One of the main challenges brands are facing at the moment is that it's a very crowded space," Yao pointed out. With numerous brands offering a wide array of products, finding new, effective ingredients and communicating their benefits effectively across various channels is crucial. "It's very important to ensure that the brands elevate their functional superiority and difference from other brands through ingredient innovation," Carsula said.

Data from Euromonitor International shows that around 4,000 new products were launched in beauty and personal care across India, Singapore, Australia, and New Zealand on e-commerce platforms alone since 2023. Tekutyte noted, "Around 20% of the brands launched in 2023 were not available by the end of the year," highlighting the fierce competition and the need for brands to understand diverse consumer preferences.