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Beauty is undeniably a big industry but within the sector, the hundreds of well-loved brands are owned by only seven global conglomerates. These household names range from Unilever, L’Oréal to Estée Lauder.

The 182 beauty companies contribute heavily to a beauty market worth $63 billion in the US alone and responsible for shaping consumer ideas about modern day beauty. The US and China alone will account for 54% of the premium beauty segment by 2021.

The chart, illustrated by Business Insider, shows how interconnected beauty brands really are and which houses are most prominent. Below are a few that stand out:

L’Oréal’s footprint

L’Oréal had the most brands on this list – a total of 39 beauty brands ranging from Maybelline to Kiehl’s.

It was estimated that L’Oréal made $27.6 billion in annual beauty sales in 2016. What factors attribute to its success? The company’s ecommerce sales rose by 33% year on year in 2016 and 30% of its media spend was on digital.

For the company, ecommerce isn’t only a peripheral revenue stream, but the new growth engine.

La Roche Posay, a skincare brand under L’Oréal, also has a marketplace presence in Thailand through a flagship shop-in-shop on Lazada.

La Roche Posay flagship store, Thailand

Beyond Thailand, Johnson & Johnson in the Philippines recently launched an official flagship store for its brands, Aveeno and Neutrogena, on Lazada to take advantage of the marketplace’s high traffic.

“Ecommerce isn’t the cherry on the cake, it becomes the new cake,” says Jean-Paul Agon, CEO of L’Oreal Group.

Selling online also helps L’Oreal cut costs,

“With traditional channels, there’s counters, samples and purity materials, when we do ecommerce, the cost is lower,” says Agon.

Unilever’s footprint

Unilever has 38 sub-brands under its management, and many are drugstore staples such as Vaseline and Sunsilk. The company reportedly made $22.3 billion from beauty sales last year.

The FMCG giant announced a partnership with Lazada earlier this year to collaborate on supply chain, fulfillment, data, marketing and social commerce. As Lazada saw a 181% growth surge in one year in its FMCG category, Unilever is looking to grab a large piece of the pie.

Unilever’s digital strategy in Southeast Asia reflects the company’s global ambitions,

“It’s important to change business models, to be inspired by startups, because the model of the past is not the model of the future,” says Keith Weed, CMO of Unilever Global.

Unilever Thailand unveiled a flagship store on Lazada earlier this year, selling ten of its most popular brands on the marketplace.

Unilever, Lazada Thailand

Johnson & Johnson’s footprint

Johnson & Johnson is responsible for nine beauty brands on the list – relatively small compared to the others but what it lacks in quantity, it’s well-known brands make up in popularity among users. Aveeno and Neutrogena are household staples for body and hair care.

The J&J brands can easily be found on the shelf of US drugstore chains such as Rite Aid, and as equally easily across the globe in a department store in Singapore or Bangkok. Offline footprint aside, consumers can also find a lot of these brands online – especially in China.

“Ecommerce is becoming a strategic imperative to winning baby,” says Christina Lu, VP Marketing for consumer personal care, Johnson & Johnson. In China, 15% of baby skincare sales come from ecommerce.

The group is also doubling down on an online strategy in Southeast Asia.

Aveeno flagship store, Lazada Philippines

Estée Lauder’s footprint

The company has reached $1 billion mark in yearly ecommerce sales, with online being Estée Lauder’s fastest growth channel.

“New experiences and innovative high quality products and services, which will encompass digital marketing, disruptive in-store merchandising, compelling creativity and omni-channel offerings is a priority for enhancing the customer engagement experience,” says Fabrizio Freda, CEO of Estée Lauder.

Brands under Estée Lauder, such as Bobbi Brown and MAC leverage from being global powerhouses, and solidify their presence in countries such as Thailand by launching brand.com.

Bobbi Brown Thailand

Why are these beauty brands so successful?

In 2016, global brands such as Unilever, Procter & Gamble and L’Oréal maintained a strong foothold in Thailand even as the market saw a rise in local beauty brands. According to Euromonitor, beauty brands have experienced a faster growth rate in 2016 because of aggressive digital marketing strategies via: 

  • Online content
  • Different purchasing incentives such as click-and-collect
  • Free delivery with online purchases.

What this research shows is the importance of a digital strategy – not many brands have the capability of breaking into markets without a long term online play.

Interested in reading more on beauty? Check out eIQ’s BeautyIQ Series, where we cover different aspects of building a successful beauty brand in a digital age.

The original infographic was published on Business Insider, access the article here.

Thailand’s digital and ecommerce landscape could experience 20x growth over the next ten years as the online ecosystem becomes available to the majority of shoppers.

With social channels and new means of communication, methods of targeting consumers and a more holistic understanding of shoppers in a digital age, ecommerce is becoming a true staple in driving business growth in the country.

The integration of social channels in all platforms has also increased. Facebook has become a viable platform for buying and selling among online Thai shoppers, with 44 million active users in the country and reaching 7% yearly growth. Instagram is another important platform that has almost 10 million users in Thailand.

Meanwhile, the tech industry’s most talked about mobile app, Snapchat (that recently filed its IPO), remains a less popular social platform in the country. The app, however, is testing social commerce functions to potentially strengthen its positioning in the market.

Priceza: Predicting 20x growth in the next ten years

According to Tanawat Mahabupha, co-founder of Priceza, Thai consumers are not necessarily seeking out the cheapest deals. The quality of products and credibility of brands are becoming integral to the decision making process.

“This year, Thailand will have a strengthened infrastructure. Both payment and logistics will become crucial drivers of progress. It can be said that if e-payment takes off, so will ecommerce.”

The shopping behavior of Thais is a mix between going onto marketplaces to browse and/or shopping directly from brand.com. This is especially the case for more premium products, such as cosmetics.

Currently, Southeast Asia is experiencing the most rapid growth in ecommerce and Thailand has the highest gross merchandise value (GMV) in its group. This means that retailers and brands need to be quick in adopting digital strategies. Aside from competing over the speed of launching a product, brands also need to act swiftly in logistics and customer service. The importance of a speedy delivery service is crucial to the success of an ecommerce strategy.

Lnw Shop: Great consolidated ecosystem by sellers 

Nuttawit Polwattanakul, CEO of Lnw plc, or Lnw Shop says that this year, social commerce will experience even more robust growth. A lot of brands will be turning to channels that do not require them to pay a fee, such as Instagram or Facebook.

According to Nattawit, e-payment may take approximately 3-4 years to fully take off and calm the fears of consumers. It’s important to ensure that marketplaces accommodate the incoming new comers in payment in order to accommodate the country’s diversifying payments landscape.

The government is currently pushing initiatives for SMEs, educating the market about different marketing channels and how to use them. Most recently, the Thai government announced an official partnership with ecommerce giant Alibaba to boost growth for small and medium sized players. SMEs are also recommended to integrate Facebook Live into online strategies.

Aside from the development of payment, logistics and marketing, more sellers will want to join forces to target consumers. It is a challenge to construct and operate a website, which is why Thais prefer to join forces and provide customers with collaborative platform, especially in the area of logistics and last mile.

Ascend Group: Promotions are not enough

Thananan Arunrukchai from Ascend Group has pointed out that for e-payment to take off, it must be a no hassle, one step process, otherwise, the complications will drive consumers to resume  shopping via chat apps and bank transfers.

He also notes that it’s vital for brands to understand what their customers want and identify the appropriate marketplaces. This is more important than dishing out promotions in the long run. Some brands often overlook the importance of a customer experience, and instead focus on giving away promotions without much brand engagement.

COL Plc: It’s not easy to go online

According to Worawut Oonjai, chief executive of COL Plc., ecommerce only makes up 2-3% of total retail, hence the growth potential. According to him, it is not easy to go online. Brands should use marketplaces as a platform to test the waters and diversify their online presence.

Brands should widen their marketplace selection in order to collect enough data and the know-how to launch a brand.com.

However, if a brand truly wishes to pursue a brand.com strategy, they need to be strong enough; factors such as funding and a niche market would be necessary for a successful direct-to-consumer strategy.

Looking forward

TNS, global market research company, reports that Thai people have the highest use of social media platforms – 92% of users on a daily basis. Bain & Co also released findings that the Thailand online market is estimated to make up 15% of total retail by 2024.

For companies realizing the importance of ecommerce, are they too late to the game? Not really. Convenience store chain MaxValu recently announced that they are in the middle of executing an online strategy after witnessing a rise in online demand from when they sold new year gift baskets via online distributors. For companies with large offline footprints and strong customer base, they actually have an advantage.

So there we have it, the thoughts of some of Thailand’s ecommerce influencers. The country is undeniably undergoing fast internet adoption and with the increasing popularity of social commerce and marketplaces, brands are under pressure to seize the ten year growth potential. It’s important to use marketplace visibility to tread into ecommerce and as a stepping stone to a brand.com strategy, but brands should be wary of following the herd and without fully establishing a footprint in the ecosystem first.

This post was translated and modified from Bangkokbiznews.com and Prachachat.net. Read the original entries in Thai here and here.

Indonesian investment management firm PT Aberdeen Asset Management, is gearing up for electronic trading (e-trading) with support from PT Phillips Securities Indonesia, reports Digital News Asia.

Phillips Securities will help Aberdeen to market its mutual funds product via it’s mobile-friendly online trading platform Poems (Phillips’ online electronic mart system). Prior to this initiative, customers would typically have to go through sales agents at banks for their mutual funds needs and requirements.

As of now, there are two products available on the Poems platform, The Aberdeen Indonesia Money Market Fund and the Aberdeen Indonesia Balanced Growth Fund. The company is set to launch three more products by August. Phillips Securities Indonesia launched Poems in 2003, and the platform currently has 21 investment management firms on board, offering more than 100 products.

The e-trading platform is an effort by Aberdeen to recruit more customers and reach out beyond its current customer base. With Phillips’ strong mobile platform, Aberdeen will be able to leverage from the mobility know how of its partner.

The company said it is targeting to be in the top five of the largest investment management firms in Indonesia by 2020. There are 84 such firms listed by the Financial Services Authority.

Aberdeen currently has a fund value of $68.4 million, whilst the top two investment management firms in Indonesia, Schroder Investment Management with $3.7 billion in value and Paribas Investment Partners with $1.7 billion, in value. This makes Aberdeen’s five year goal very ambitious and an online platform seems to be one promising avenue.

Shifting customer behavior

Having Aberdeen’s products trading online means customers can check on their investment performance all the time as it helps them feel more secure. Sigit said that the online purchasing of mutual funds was a challenge earlier, as customers felt safer communicating and meeting with sales agents. However, consumer behaviour is now changing and moving increasingly to mobile channels, a gap that needs to be filled, he said.

Aberdeen’s announcement comes after Indonesia’s Financial Service Authority’s regulation issue; in which the government would allow for investment managers to partner with third parties to sell funds via electronic channels.

A version of this appeared in Digital News Asia on July 20. Read the full version here.