Cosmetic Products Market
Thailand
Overview
2004 2005 2006 (Estimated)
Total Market Size 834 908 1,078
Total Local Production 1,075 1,300 1,560
Total Exports* 437 620 743
Total Imports* 196 228 261
Imports from the U.S. 51 50 57
*The Thai Customs Department, Ministry of Finance
The exchange rate is $1/THB36
The overall growth rate of the cosmetic products market in Thailand in 2006 is expected to be at 12 percent, 3 percent more than the year before. The increasing growth is considered to be significant considering the continuing economic slowdown and the prolonged unstable political situation in Thailand. High quality, international branded cosmetic products are expected to do better and may have a growth rate between 15-20 percent due mainly to good brand image, brand loyalty and perception of good quality. Products from the United States are highly regarded and lead the imported market. Competition from France, Japan, the United Kingdom and Germany is getting stronger. Perfume from France remains the market leader in Thailand followed by perfume from the US. Hair care and make up products maintained a single digit growth (at 5 and 7 percent respectively), while skin care and perfume showed better growth at 17 and 15 percent respectively. Products such as anti-wrinkle cream, anti-aging facial cream, and whitening facial and body lotion have good growth potential. They are classified as problem-solving cosmetic products that suit customers’ needs. More cosmetic products especially designed for men are becoming popular. Thailand remains a strong manufacturer and exporter of shampoos and other hair care products, color cosmetic and skin care products. Direct sales are the preferred distribution channel and account for 60 percent of the total market.
Competition among the cosmetic suppliers and distributors is always fierce and strong. The prevailing economic slowdown makes the competition more severe, especially among medium to low quality body care, skin care and hair care products. The suppliers of these products always introduce new strategies not only to retain their existing customers but also to capture greater share and enlarge their customer base. All leading cosmetic companies invest heavily in promotional campaigns to keep their market share and to stimulate the market. High-end international brand cosmetic products use women’s magazines as their major advertising means to reach their potential buyers. Premiums and point-of-sale promotional campaigns are also used regularly to stimulate sales. Counter sales at major department stores are their main sales channel. The counter sales account for approximately 30 percent of the total cosmetic sales in Thailand. For low to medium quality cosmetic products, TV is the main venue used for advertising campaigns. Sampling and giveaway are the two leading promotional strategies utilized to introduce new products and to stimulate the sales of existing products. Uniliver and Procter & Gamble are the leading advertising spenders in Thailand. Direct selling, discount stores, drug stores and convenience stores are the major channels of distribution for medium and low quality cosmetic products.
More than half of the imported cosmetic products are high-end facial cream, mostly anti-aging, and body and skin care products. The products from the U.S. dominate this sub sector with approximately 32 percent share. Leading brands include: Estee Lauder, Clinique, Shisheido, Christian Dior and Lancome. Imported perfume still supplies 90 percent of the total demand of perfume products in Thailand. Perfume from France dominated the market with approximately 56 percent share in 2005. The perfume products from the U.S. came second and had about 17 percent share of the market.
The overall growth potential for the cosmetic products during the next three years (20062008) is optimistically expected to grow between 15-20 percent. With a total potential customers base of 18 million (women between the age of 15 to 50 years old), most of them are professionals, Thailand’s market for cosmetic products has a very strong group of potential buyers. Political stability after the general election expects to be held early 2008 should enhance the consumers’ confidence. Consumer spending is expected to grow positively after a new elected government is formed.
Make-up, skin care, and perfume products generally have an import duty rate of 30 percent, while hair care products generally have 20 percent import duty. A product registration and import authorization are required by the Thai Food and Drug Administration in the Ministry of Public Health prior to the actual shipment of the cosmetic products.
Import Regulations and Import Duties
Importation of cosmetic products is controlled by the Thai Food and Drug Administration of the Ministry of Public Health. A product registration is required prior to the actual importation and marketing of the cosmetic products. The registration process is not complicated, but may take one to two months time. The basic documents required by the Thai FDA include a notarized Certificate of Free Sale or a Certificate of Manufacture issued by the manufacturer in the manufacturing country (United States) and notarized by a Notary Public in the U.S., and a full ingredient/composition listing issued by the manufacturer and notarized by a Notary Public. Both documents have to be legalized either by the Thai Consulate in Washington, DC or the American Embassy in Bangkok, Thailand.
Import Duty Contact information at the Thai Food and Drug Administration office:
HS Code No. Descriptions Duty Rate (%)
3303 Perfume 30
3304 Make Up Products & Lotion 30
3305 Hair Care Products 20
3307 Shaving Products and Deodorant 20
Mr. Pongpraphan Susantitpong – Director Cosmetic Control Division Food and Drug Administration Ministry of Public Health Tivanon Road Muang, Nonthaburi 11000 Thailand Tel: 662-590-7169 Fax: 662-591-8468 E-mail: cosmetic@fda.moph.go.th
Best Prospects/Services
Best prospects for cosmetic products from the U.S. include:
-Anti-aging facial treatment
-Wrinkle free eye treatment
-Whitening facial treatment
-Whitening body lotion
-High-end make-up and skin care
-Medicated shampoo
-Medium and high-end perfume
-Body spray
-Cosmetic products for men
Resources
Trade Show
Thailand Health and Beauty Show 2007 To be confirmed, normally between October and November Bangkok Thailand Organized by The Department of Export Promotion, Ministry of Commerce Website: www.depthai.go.th
Websites
Food and Drug Administration Ministry of Public Health
Mr. Nalin Phupoksakul – Commercial Specialist
U.S. Commercial Service American Embassy E-mail: nphupoks@mail.doc.gov