Malaysia Beauty and Personal Care
U.S. exporters should consider the large and growing Beauty and Personal Care (B&PC) product Market in Malaysia. According to Statista.com, revenues in this space are projected to reach $2.5 billion in 2021 and grow at a 4% compound annual growth rate through 2025. Malaysia’s population of 32.7 million people enjoys an average per capita income level of $11,414, which translates to a group of potential affluent consumers.
The United Nations’ Comtrade database mentioned that Malaysia imported $1.3 billion of B&PC products in 2019, with the U.S. accounting for $132 million. The U.S. Bureau of the Census derived data states the top six U.S. exports to Malaysia are essential oils, shaving and skin care products, cleansers and soaps used for washing the skin, cosmetics ingredients, hair care, and perfume and toilet waters. U.S. exports to Malaysia grew in 2020 despite the pandemic, led by increases in exports of essential oils (+$5.3 million) and shaving and skincare products (+$4.0 million),and cleaners and soaps (+$1.6 million) that compensated for a decrease in exports of perfume and toilet waters (-$0.3 million), cosmetics ingredients (-$1.5 million) and hair care products (-$1.3 million).
Other major B&PC exporters to Malaysia include the European Union ($278 million), China ($181 million), Thailand ($155 million), Singapore ($153 million), Korea ($93 million), Indonesia ($92 million), and Japan ($72 million).
Long-term trends driving growth include greater financial independence for working women, greater interest in natural and organic products among the youth, and greater attention to grooming by men. Growth in disposable income levels and the construction of new shopping malls has created opportunities for global brands to directly reach out to affluent customers.
The pandemic in 2020 greatly accelerated the use of e-Commerce websites including Shopee, Lazada, and Zalora. E-Commerce suits price-conscious consumers who telework at home. This recent trend is expected to continue due to the conveniency of home delivery and accessibility to products. A rebound in sales in the B&PC space is expected in the latter half of 2021 and early 2022, when more people return back to in-person workplaces.
Several local distributors interviewed by the Commercial Service in Malaysia mentioned several product line-ups they will consider when the economy, market demand, and consumer sentiment improve. Common requirements amongst the distributor networks include mid-price functional skincare, best-in-class pharmaceutical grade skin care, efficacious and safe skin care, and hair care products that are backed by clinical data. Innovative packaging that stands out in the increasingly saturated B&PC market is essential. Strong brand recognition on social media in the country of origin is also important.
U.S. products generally have a positive market perception in Malaysia. These products are viewed as having high quality and being natural, organic, vegan and free of animal testing. However, the higher price points often required by U.S. exporters can make them less competitive. Furthermore, almost 70% of the population in Malaysia is Muslim, which translates into increasing demand for Halal-certified cosmetics and skin care products. Malaysia is a multi-ethnic society; hence cosmetics color range requirements is broad. Also, our team sees a trend where consumers are turning away from harsh chemicals and artificial fragrances.
The National Pharmaceutical Regulatory Agency regulates cosmetics and many other beauty and personal care products. Documents submitted for regulatory notification should be prepared in accordance with the technical document templates provided by the ASEAN Cosmetic Directive. The cosmetics submission dossier must include an Authorization Letter from the product owner and a Product Information File with relevant technical and safety information. New cosmetic product approvals takes up to 30 working days and have a validity period of two years. Product approval renewals can take up to five working days, and only companies registered in Malaysia can act as notifiers. These notifiers can be a manufacturer, importer, wholesaler, or seller.
If you have questions on the information provided above, please reach out to us.
Contact: Tracy Yeoh (tracy.yeoh@trade.gov) or Office.kualalumpur@trade.gov.