Beauty may not last forever, but its industry seems resilient in the face of economic shockwaves.
According to McKinsey, during the global 2008 financial crisis, spending in the beauty market only dipped slightly and recovered by 2010. While the Covid-19 pandemic will have an economic magnitude far more significant than previous recessions, McKinsey notes, signs indicate that the beauty sector may not be sagging for long. China saw beauty sales fall 80% in February 2020 compared to 2019. However, by March, the year-on-year decline was 20%, which is considered a rapid rebound under the circumstances.
Malaysia also sees encouraging signs amidst the bleakness. According to Statista figures, while beauty and personal care revenue in Malaysia fell in 2020 to US$2.29 billion, it rose again in 2021 to US$2.47 billion – similar to the revenue recorded in 2019. In 2022, the total is expected to increase to US$2.74 billion.
The lucrative beauty market has sparked avid interest in the Malaysian government to grow the local industry, which further catalysed sales even during the pandemic. According to Malaysia External Trade Development Corporation (Matrade), the virtual trade promotion programme it co-organised in 2021 with beauty trade fair Cosmoprof Asia to promote Malaysian exporters to foreign markets has generated actual sales of RM1.03 million and potential sales of RM87.67 million.
Pandemic pampering
The pandemic saw people staying home more often. This has undoubtedly dampened the demand for cosmetics, but beauty is far from passé. The increased screen time for work, ‘cabin fever’, and general anxiety amid a worldwide health crisis have intensified stress and, by extension, the thirst to ‘feel good.
Beauty regimens have long been marketed as a form of self-care, and the line between both is further blurred with the rise of what PwC calls “wellcare” – a convergence of health, food and beauty to achieve wellness inside out.
In the fifth issue of Asia Connects, we featured businesses that operate on the nexus between looking good and feeling good. Our cover article of Hairstory tells how the hair salon chain aims to offer “therapy for the mind, head, and soul”. In another piece on POSH Nail Spa, we spoke to the founder about why POSH’s nail care services seek to go beyond painting delicate designs to help customers solve nail health issues.
Further buoying the growth of ‘wellcare’ is the ease of accessing various health, supplements and beauty products through eCommerce. Even wellness or alternative therapy trainers can now take their offering online and teach classes virtually – which was how Malaysia’s annual wellness and lifestyle festival MurFest operated in the past two years.
Other than shopping platforms, social media channels are inundated with beauty, hair and wellness outlets riding on the digital wave to advertise and promote deals.
But the online boom has a dark side.
A beautiful mess
In October 2020, the death of Malaysian model Coco Siew rocked the beauty industry. The tragedy was caused by a botched liposuction procedure costing RM2,500 at an unlicensed beauty salon in Kuala Lumpur, which she reportedly found online.
The beauty industry has long grappled with regulation. While the Ministry of Health requires all registered medical practitioners who wish to practise aesthetic medicine to be registered under a national registry, the fact remains that many beauty centres are operating without proper licensing.
The gaps in regulation also extend to cosmetic and supplement products in Malaysia. The country’s growing ‘backyard’ beauty industry, reportedly worth RM2 billion, has raised alarm bells among regulators. These gaps have impacted consumer confidence in the beauty, health and wellness industry, especially among smaller players like salons and spas. But it may also push industry players to step up and join forces to elevate the playing field. Our chat with Malaysia’s first beauty co-working space, Beauty & Co, explores how the company seeks to instil ethics and integrity in the competitive aesthetic market.
Curious and want to read the full stories? Download Asia Connects issue 5 for the above stories.
