Trends and developments in Thailand’s cosmetics market

Thailand’s cosmetics market has a growing interest in natural and organic ingredients, sustainability, and the integration of beauty and technology. One that knows the future of the industry well, from formulation to packaging is Aesthetic Plus Co., Ltd.

 

Aesthetic Plus  was established in 1992 in Nakornpathom province by a team of skin care professionals, and has grown to become a leading ODM and OEM in the cosmetics and skin care industry. The company offers skin care, anti-acne, makeup, spa, and body care, along with extensive consultation services covering product formulation, packaging design, and market insights. It is renowned for customizing cosmeceutical products for dermatologists, skin care clinics, and hospitals, boasting certifications from both international and Thai Food & Drug Administration (ISO, GMP, Halal) as well as a Green Industry certificate.

 

Ringier conducted an interview with Ms Pichamon Usaha, Vice President of Aesthetic Plus Co., Ltd., discussing the market trends in Thailand, and her approach to leading the cosmeceutical market. The conversation also covered her strategies for researching and developing significant cosmeceutical products that cater to complex medical needs.

 

 

Dr Pichamon Usaha, MD of Aesthetic Plus Co., Ltd

 

 

Are there new developments going on in Thailand’s cosmetic market?

First of all, the government has a policy that aims to promote Thailand as a “Medical Hub”, and this comprises two main industries: Medical Treatment and Healthcare & Beauty. The government supports entrepreneurs by facilitating roadshows to promote Thailand's medical capabilities abroad. Furthermore, the medical hub benefits from increased R&D funding and grants from the Ministry of Science, leading to more favorable outcomes for these industries.

 

The present beauty trends in Thailand focus on rejuvenating and strengthening skin health.  Almost all cosmetic manufactures are required to develop their products with their customers to meet the consumer requirements by customizing formulation to meet our customer request as well as purchasing research projects from universities to develop formulas.

 

Increasing demand for aging skin care products such as moisturizing creams, serums, and lotions is another trend. Both local and international customers prefer using Thai botanical extracts for skin care and spa products such as "White Kwao Krua" (Pueraria mirifica) a local Thai herb for firming, Turmeric, Andrographis paniculata and Mangosteen for their antibacterial treatments.

 

What is Thailand's competitive edge over imported brands?

Thai cosmetics utilize local natural extracts easily sourced in Thailand, which are perceived to be more natural to synthetic extracts used by international brands. The credibility of Thai products, especially in CLMV (Cambodia, Laos, Myanmar, Vietnam) markets, lies in the integrity of Thai regulations, ensuring that ingredients are accurately labeled.

 

In Thailand, there are rich sources of essential oils extracted from indigenous herbs, which offer exotic unique scents such as lemongrass, basil, pandan, and kaffir lime which are different from the imported brands.

 

Thai cosmetic manufacturers are capable of blending these scents to align well with global preferences, particularly for spa products. This unique combination of natural extracts and culturally resonant scents enhances the appeal and marketability of Thai cosmetic products for both local and international consumers.

 

What are the trends in skin care packaging?

The growing trend in the cosmetics industry is towards sustainability, with a shift towards using recycled materials such as repurposed plastics and paper-based packaging. For example, paper tubes are being utilized for lipstick packaging.

 

There's also a movement towards refillable inner packaging, such as cream pouches and perfume bottles, to reduce waste and promote environmental consciousness. This emphasis on sustainability not only aligns with global environmental concerns but also reflects a commitment to responsible manufacturing practices within the Thai cosmetic industry.

 

As an ODM/OEM, what support do you provide customers?

As an ODM, we customize the specific formulations based on our customers’ requests. Our R&D team will develop the formulation based on mutual collaboration with universities. Over 90% of the formulations primarily rely on university-derived extracts to formulate the mix extracts, conduct product efficiency tests, and analyze the efficacy of raw materials then manufacture a sample sent back to universities for testing in experiment groups. Approximately 10%, we buy the universities research formulations.

 

As an OEM, we create a partnership that begins at project inception to market launch. Our focus lies heavily on research in medical skin care to ensure the safety and efficacy of our products. This gives our customers the confidence to sell our products in local and international markets.

 

We prioritize post-sales service, providing a team of dermatologists to address any skin-related concerns of end-users. Additionally, we offer legal consultation to ensure compliance with FDA regulations, preventing legal disputes.

 

We also assist in producing promotional clips to showcase product manufacturing processes and provide export support documentation. With 31 years of experience in the cosmeceutical industry, we have earned a reputation for reliability and trustworthiness. Our commitment to quality and comprehensive support services distinguishes us within the industry, ensuring successful partnerships and market penetration.

 

Are there new ingredients that consumers look for, or maybe you have proposed? 

Probiotic and postbiotic ingredients are incorporated into skincare products as anti-bacterial agents and to stimulate collagen creation, thereby combating aging effects. A growth factor is also interesting -- it is a secreted biologically active molecule which can affect the cells growth that produce amino protein chains, mimic human cell conditions. It aids in treating acne, aging, and hair loss, by promoting cell regeneration. Additionally, it facilitates tissue regeneration in diabetic patients.

These advanced ingredients showcase the innovative approach of utilizing bioactive components to address various skincare and health concerns.

 

What about your market share in each category?

About 70% of our customers consist of hospitals and dermatology clinics specializing in acne and melasma treatment. These diverse customers base highlight our commitment to provide high-quality skincare solutions to address specific dermatological concerns.

 

For the remaining 30%, we provide OEM and branded products to customers who demand aging skincare solutions, including moisturizing creams, serums, and lotions aimed at rejuvenating the skin.

 

Our products are exported to various regions, including CLMV, the Middle East, ASEAN countries, China, and the USA. Approximately 20% of our customers are international clients who import our products for distribution in their respective markets.

 

Is halal cosmetics demand growing?

Our customers primarily consist of hospitals and dermatology clinics. They typically do not require Halal certificates. However, for OEM customers exporting to Muslim-majority countries, there is still a demand for Halal certification to instill confidence in consumers. Additionally, some clients may need to obtain local Halal certification in the destination country to ensure compliance with local regulations and cultural expectations. This dual approach to certification ensures that our products meet both international standards and local requirements, thereby accommodating the diverse needs of our clientele and expanding our market reach.

 

What are the opportunities in OEM/ODM?

The “Medical Hub Policy” which focuses on establishing Thailand as a medical hub presents significant opportunities for growth and expansion.

 

Continuous growth in the health and beauty business is another factor, driven by health and self-care among the female population.

 

Finally, our long-standing reputation as the market leader provides a strong foundation for growth.  We maintain strong connections within the medical community, despite the complexities of serving this customer segment, which presents barriers that our competitors.

 

…and the challenges?

I suppose our challenges lie in the rise of disruption forces. We will expand our business diversification into areas, traditional Thai herbal medicine, and medical equipment manufacturing.

We also require increasing collaboration with universities for research in terms of resource allocation and alignment of objectives.

 

Now we are fully implementing an Enterprise Resource Planning (ERP) system with all modules that can streamline operations but this requires thorough planning and integration across departments. Increasing automation in our processes can lead to efficiency gains but requires investment and adjustment in organizational culture. It also requires the upskill and reskill of staff to meet evolving business demands and technological advancements to stay competitive.

 

Can you share some information about your collaborative research with educational institutes?

We have several collaborative research projects with educational institutes. This is our social contribution mission. If any university requests support in R&D, testing and sample production, we provide free formulation services, and send formulas to universities for human research, and allow universities to sell them. For examples:

1. Probiotic toothpaste which reduces tooth decay bacteria and probiotic serum which reduces acne developed with the Faculty of Dentistry, Prince of Songkla University.
2. Oral care: Reduces COVID transmission, developed with Faculty of Dentistry, Mahidol University.
3. Para rubber extract: Reduces acne, developed with Faculty of Science, Mahidol University.
4. Snail serum & cream which developed with Faculty of Science, Chulalongkorn University
5. Local seaweed extract: Supports local communities by providing income from seaweed farming. Extract used as a moisturizer, developed with Khon Kaen University.

Please tell us more about your services in packaging and raw material quality assurance & ​testing as well as the Micro Lab.

The Micro Lab performs various tests to ensure product quality assurance as follows:

1. Total Plate Count: General bacteria count must not exceed 10 cfu (colony-forming units).

• Packaging Test: Checks for contamination in packaging after cleaning. If failed, Packaging materials are rejected.
• Raw Materials Inspection: If materials fail, they are rejected and returned to suppliers.
• Bulk Inspection: Failed bulk products undergo reprocessing until on specification of product.
• Finished Goods: If fail, products are disposed of.

2. Specific Pathogen Testing: In-house tests for specific pathogens like E. coli.
3. Challenge Test: Determines suitable preservative percentages to control microbial growth.

• Packaging Material Quality Assurance: Physical tests ensure cleanliness, including analysis of cleaning marks, dust, breakage, scratches, and screen print quality.
• Plastic Tube Drop Test: Evaluates the durability of plastic tubes to prevent easy breakage.
• Raw Material Inspection: Conducts physical tests including color, pH, odor, viscosity, and supplier-provided certificates request.