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The Competitive Landscape of the Beauty Industry in the Philippines

GOOVER DAILY REPORT July 17, 2024
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TABLE OF CONTENTS

  1. Summary
  2. The Historical Evolution of Beauty Standards in the Philippines
  3. Market Dynamics and Consumer Behavior
  4. Key Players and Competitive Strategies
  5. Impact of Beauty Trade Shows
  6. Cultural Impact of Beauty Camps
  7. Conclusion

1. Summary

  • The report titled 'The Competitive Landscape of the Beauty Industry in the Philippines' examines the dynamic and rapidly evolving beauty industry in the Philippines. It discusses the influence of historical events, cultural shifts, and global trends on local beauty standards. Key drivers include social media, generational preferences, and environmental factors shaped by the tropical climate. Notable findings include the high market penetration of K-Beauty, the significant role of beauty trade shows like PhilBeauty and BeautyCon 2024, and the cultural impact of beauty camps such as Aces and Queens. The market is marked by competition between international brands like Johnson and Johnson and local brands such as Sunnies Face, with distribution channels extending from malls to e-commerce platforms.

2. The Historical Evolution of Beauty Standards in the Philippines

  • 2-1. Indigenous Traditions and Early Beauty Practices

  • The history of beauty standards in the Philippines dates back to indigenous traditions where beauty practices included tribal tattoos and shell headpieces. These adornments were prominent during the period of the Spanish-American War at the turn of the century.

  • 2-2. American and Japanese Influences During the 20th Century

  • Following the U.S. control of the Philippines, American beauty trends became influential. During the 1920s and 1930s, women embraced glamorous updos and heavy makeup inspired by jazz and the silver screen. However, the Japanese occupation during World War II brought significant changes. Post-war, the Philippine film industry flourished, and beauty trends were set by mestiza actresses who popularized red lips and rosy cheeks. America's influence continued into the 1960s with styles inspired by Jackie O and Imelda Marcos, transitioning into the hippie styles of the 1970s.

  • 2-3. Modern Influences from K-pop and Western Cultures

  • In the 2000s, there was a marked shift towards Korean music and television, influencing beauty trends such as long straight hair. The present-day beauty standards in the Philippines are heavily shaped by both K-pop and American culture, featuring styles like full wavy hair and dark brows. K-beauty, a significant part of the 'Korean Wave,' has its roots traced back to the Three Kingdoms period. It was during the Japanese-occupied Korea era that modern cosmetics were first introduced, leading to the creation of Korea’s first mass-produced makeup, Park's Powder, in 1915.

3. Market Dynamics and Consumer Behavior

  • 3-1. Impact of tropical climate and environmental pollutants on product choices

  • In the Philippines, the tropical climate and environmental pollutants influence consumer choices in beauty and personal care products. Both male and female consumers are looking for products that maintain a healthy appearance and protect their skin from toxic pollutants. Products containing active ingredients like Niacinamide, Hyaluronic Acid, Salicylic Acid, and Retinol are increasingly popular. The demand for such products is driven by the need to protect the skin against environmental stressors.

  • 3-2. Generational differences in brand preferences

  • Brand preferences vary significantly across different generations within the Filipino market. Older consumers, who are familiar with U.S. brands, tend to prefer these due to their long-standing presence and reputation. On the other hand, millennials and Gen Z populations show a growing inclination towards skincare products from Korea and Japan. Notably, popular Korean skincare brands such as Innisfree, CosRx, Laneige, Banila Co., and dear Klairs have garnered significant attention among younger consumers.

  • 3-3. Role of social media and e-commerce

  • Social media has a profound effect on the beauty and personal care market in the Philippines. Platforms like Facebook and Instagram are pivotal in influencing consumer purchases through local endorsers and influencers. Furthermore, e-commerce channels such as Lazada and Shopee, along with online social media stores, contribute significantly to sales. The visibility and accessibility provided by these platforms enable brands to effectively reach and engage with their target audiences, thus driving sales and brand awareness.

4. Key Players and Competitive Strategies

  • 4-1. International brands and their market strategies

  • International brands dominate the beauty market in the Philippines. American skincare brands hold a 35% market share, followed by Korean brands at 34% and Japanese brands at 20%. Prominent brands include Johnson and Johnson, Shiseido, Estee Lauder Companies, L’Oreal, Unilever, and Procter & Gamble. Popular Korean skincare brands such as Innisfree, CosRx, Laneige, Banila Co., and dear Klairs are highly sought after. These brands leverage traditional distribution channels such as supermarkets, hypermarkets, drug stores, mall kiosks, specialty stores, and convenience stores to dominate overall sales. Additionally, ecommerce platforms like Lazada and Shopee, along with online stores on social media sites like Facebook and Instagram, have significantly boosted sales. Products containing active ingredients like Niacinamide, Hyaluronic Acid, Salicylic Acid, and Retinol are gaining popularity, with brands like The Ordinary, Paula’s Choice, Goop, and CeraVe seeing rising demand.

  • 4-2. Local brands and their market adaptation

  • Local brands in the Philippines are gaining traction in the beauty industry, catering to both male and female consumers. Notable local brands include Sunnies Face, BLK, Colourette Cosmetics, and Happy Skin. These brands are responding to consumer demand for products that help maintain a healthy appearance and protect against environmental pollutants. The high growth is driven by a price-sensitive market where readily available skincare products are typically in the $5-$10 range. Different consumer demographics show varying preferences; older consumers tend to favor U.S. brands due to familiarity, while millennials and Gen Z are more inclined towards Korean and Japanese products.

  • 4-3. Influencer collaborations and promotional campaigns

  • Social media plays a crucial role in influencing beauty and personal care product purchases in the Philippines. Brands actively partner with local endorsers and social media influencers to promote their products and enhance brand awareness. This strategy has proven effective in reaching younger demographics that are highly active on platforms like Instagram and Facebook. Collaborative efforts between brands and influencers often result in promotional campaigns that drive sales and increase customer engagement.

5. Impact of Beauty Trade Shows

  • 5-1. Overview of major events like PhilBeauty and BeautyCon 2024

  • BeautyCon 2024, titled 'Journey Into Beauty', was held from March 20 to 23 at the SMX Convention Center Halls 1 and 2. It is recognized as one of the largest beauty events of the year. This event, organized by Watsons, SM Beauty, and LOOK At Me, hosted over 100 beauty and personal care brands and was free for Watsons Club, SMAC, and LOOK At Me members. The event featured a broad range of beauty categories, including cosmetics, fragrances, skincare, haircare, body care, and more. Participants included renowned Filipino beauty brands such as Issy Cosmetics, GRWM Cosmetics, Colourette Cosmetics, Absidy Beauty, BLK Cosmetics, Happy Skin Cosmetics, and Vice Cosmetics. Additionally, trending Asian brands like Hada Labo, Laneige, Beauty of Joseon, Dr. Jart+, Tsubaki, Round Lab, and Rom&nd were featured. Luxury and international brands like Calvin Klein, Carolina Herrera, Viktor & Rolf, Armani, Shiseido, Laura Mercier, Huda Beauty, Kiehl’s, and Lancôme also showcased their products. Other major brands such as Neutrogena, Celeteque, Dove, Bioderma, Nivea, Ponds, and Olay presented the latest technologies and innovations. The event also included beauty tools brands like Kiss NY, Real Techniques, JML, W Elite, Euroo, and Wet Brush. Watsons' own brands like Naturals by Watsons, Watsons Baby, Dermaction Plus by Watsons, and Collagen by Watsons were also featured. For hair care and styling, brands like Kerastase, Manic Panic, and Liese participated, alongside men’s body care and grooming brands like Gillette, Old Spice, and Rexona Men. Additionally, A-list celebrities and top-tier Key Opinion Leaders (KOLs) made surprise appearances at the event.

  • 5-2. Role of trade shows in brand promotion and consumer engagement

  • Beauty trade shows like BeautyCon 2024 play a significant role in brand promotion and consumer engagement within the Philippine beauty industry. These events provide a platform for brands to connect directly with consumers, offering exclusive discounts, special offers, and freebies. This not only helps in driving immediate sales but also in building long-term brand loyalty. Trade shows allow consumers to discover new products and technologies firsthand, which can significantly influence their purchasing decisions. Moreover, the presence of celebrities and influential beauty icons at these events further enhances consumer engagement, creating a buzz and drawing more attendees. Such shows are crucial for both established brands and new entrants, providing exposure and opportunities to showcase their products to a large, targeted audience.

6. Cultural Impact of Beauty Camps

  • 6-1. Role of Aces and Queens in Grooming Beauty Pageant Candidates

  • The 'Aces and Queens' beauty camp has significantly contributed to the success of Filipino candidates in international beauty pageants. Notable achievements include the campaigns of Andam, Gionna Cabrera, Lia Ramos, Miss Universe 2015 Pia Wurtzbach, Miss World 2013 Megan Young, Miss Universe 2013 3rd runner-up Ariella Arida, Miss Universe 2012 1st runner-up Janine Tugonon, Miss World 2011 1st runner-up Gwen Ruais, Miss Universe 2011 3rd runner-up Shamcey Supsup, and Miss Universe 2010 4th runner-up Venus Raj. The training provided by this camp, conducted in Pasig and Mandaluyong, encompasses physical fitness, make-up, fashion, and communication skills. This intensive training regime has turned the Philippines into a 'beauty pageant superpower,' according to Agence France Presse. Additionally, some trainees like Mary Jean Lastimosa have transferred to other camps, indicating a dynamic training environment within the beauty pageant sector.

  • 6-2. Criticisms and Societal Views on Beauty Pageants

  • While beauty camps like Aces and Queens have established a strong presence in the beauty pageant arena, they have also faced criticism. Beauty pageants are sometimes viewed as outdated and criticized for contributing to the objectification of women. The 'Aces and Queens' camp, in particular, received negative attention for training foreign candidates, including Miss Universe Indonesia Kezia Warouw. Despite these criticisms, the camp's founder, Gaffud, clarified that Warouw's coaching was limited to a 'pep talk' as a favor to Albert Kurniawan, a mentor providing free make-up tutorials to trainees. Furthermore, Mary Jean Lastimosa's switch from Aces and Queens to Kagandahang Flores in 2014 reportedly caused a rift between the founders of the two camps, although such transfers are a common occurrence in the industry.

7. Conclusion

  • The beauty industry in the Philippines is a multifaceted market significantly shaped by a blend of historical, cultural, and global influences. The market is highly competitive with the involvement of both international players such as Estee Lauder and L’Oreal and emerging local brands like Colourette Cosmetics. K-Beauty remains a dominant trend influencing consumer preferences. While social media and e-commerce platforms are pivotal in driving sales and brand awareness, beauty trade shows like BeautyCon 2024 serve as essential venues for consumer engagement and brand promotion. Despite criticisms, beauty camps like Aces and Queens have a profound cultural impact on societal beauty standards. However, the report identifies limitations in addressing the evolving needs of different generational cohorts and the environmental sustainability of beauty products. Future prospects include a greater emphasis on sustainable and eco-friendly products, further integration of digital marketing strategies, and enhanced consumer education on product benefits.

8. Glossary

  • 8-1. K-Beauty [Beauty Trend]

  • K-Beauty refers to the beauty products and skincare regimen originating from South Korea, characterized by innovative solutions and appealing packaging. It is a significant trend in the Philippines, affecting consumer preferences and product offerings. The historical roots date back to the Three Kingdoms period and have evolved through various influences, making K-Beauty a major player in the global beauty market.

  • 8-2. PhilBeauty and BeautyCon 2024 [Event]

  • PhilBeauty and BeautyCon 2024 are major beauty trade shows in the Philippines, featuring a wide array of local and international brands. These events serve as platforms for brand promotion, consumer engagement, and industry networking, highlighting the diversity and innovation within the beauty market.

  • 8-3. Aces and Queens [Beauty Camp]

  • Aces and Queens is a renowned beauty camp in the Philippines, instrumental in training candidates for international beauty pageants. The camp focuses on physical fitness, makeup, fashion, and communication skills, making it a critical entity in the Philippine beauty industry. Despite facing criticisms, it has significantly contributed to the country's reputation in global pageantry.

  • 8-4. Social Media [Influencing Factor]

  • Social media platforms such as Instagram and Facebook play a crucial role in shaping consumer behavior in the beauty market. They serve as key channels for brand marketing, influencer collaborations, and consumer engagement, greatly impacting purchasing decisions and brand awareness.

9. Source Documents