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16 November 2021

Report from "Poland-ASEAN - Regional Cosmetics Forum"

The first regional conference on the cosmetics sector in Poland and South-East Asia is behind us. During the two-day event the Polish Investment and Trade Agency (PAIH) organized a series of debates, during which nearly 30 speakers: distinguished experts and representatives of industry organizations from both Poland and the ASEAN region spoke.

Poland-ASEAN - Regional Cosmetics Forum

The main objective of the event was to promote the Polish cosmetics industry and Polish cosmetics producers in the region of South-East Asia. The two-day Forum was devoted, on the one hand, to the presentation of the potential of the Polish industry to its Asian partners; on the other hand, the organizers prepared discussion panels for Polish companies, bringing closer the practical knowledge about the functioning of the industry in ASEAN countries.

The event attracted over 260 participants - mainly Polish and Asian entrepreneurs - over two days.

Polish cosmetics with international potential 

On the first day of the conference there were market presentations and a debate with the participation of, among others, industry organisations, market experts and representatives of Polish cosmetics companies present in Asia. The current situation of the industry was discussed and the so-called "10 superpowers", which define the main competitive advantages of Polish cosmetics producers, were presented.

Our greatest advantages include, among others, our rich, over 100-year-long experience and traditions in creating cosmetics, as well as the knowledge and qualifications of the sector's leaders - said Blanka Chmurzyńska-Brown, Director General of the Polish Union of Cosmetics Industry, and added: - The comprehensiveness of the offer is also of great importance, i.e. services that Polish companies are able to guarantee at each stage of cosmetic creation: from the idea, formulation development, through safety assessment and packaging design and manufacture. Flexible production, which at the same time guarantees the best world quality, convinces contractors from all continents. All this makes Poland today the 5th cosmetics market in the EU and the 14th exporter of cosmetics in the world - summed up the Director General of the PZPK.

The Forum also presented Poland's potential in the field of contract manufacturing and RD, which has been successfully developed for many years on the Polish cosmetics market. As Anna Oborska, General Director of the Polish Association of Cosmetics and Detergents Industry, emphasizes:

- Polish cosmetic companies successfully combine many years of experience with innovativeness based on science. The knowledge and know-how of formulation and technology specialists are priceless assets in a cosmetics company. In Poland, cosmetology is a field of study run by more than 70 universities. So if we add to these strong foundations the ability to follow world trends and to react to them quickly, we'll get a full description of the success of cosmetic companies and products - of Polish origin and European quality - said Anna Oborska.

The first day of the event ended with a panel discussion "Why Poland and Polish cosmetics?" The results of an analysis conducted among Polish cosmetics producers by the Polish Association of Cosmetics Industry were presented. The interest and experience of companies in entering South-East Asian markets were examined. As the results show, almost 60% of the surveyed companies already sell cosmetics in the region, while the biggest export challenges include finding a distributor and legislative issues.

One of the important topics of the panel were the perspectives of development of sales on foreign markets. Why the expansion on distant international markets is an opportunity but also a challenge for Polish cosmetics producers? This question was answered by Krzysztof Mrówczyński, Head of the Analyses Department of Bank PEKAO SA.

- In the last decade Polish cosmetics companies have been taking advantage of the relatively easy to grasp growth drivers offered by our membership in the European Union, which has resulted in the dynamic development of sales to Western Europe. In the current decade, however, this may find less and less fertile ground, as Polish companies increasingly participate in EU markets. At the same time, the potential of exports to many third countries, especially in the region of far Asia, remains largely untapped. The attractiveness of this direction is strengthened by the fact that it is there that the growing part of the global demand will concentrate. In the face of numerous and diverse barriers, expansion to these markets is certainly hindered by, among other things, the still relatively small scale of operations of Polish cosmetic companies, even though they have repeatedly demonstrated that they learn to internationalise at an above-average pace and their international ambitions go far beyond the borders of the Community - said Krzysztof Mrówczyński.

The representatives of Polish cosmetic companies also discussed their experiences and challenges connected with the expansion in the South-East Asian region.

- The most important issues one should pay attention to when expanding sales in this part of the world include: proper selection of products, finding a responsible business partner as well as broadening one's knowledge on consumer culture in the region. Introduction of Halal is particularly worth considering - indicated Adrian Winiarz, Bielenda Export Director. - Registration procedures of cosmetics in ASEAN are similar to those we know from the European Union. It concerns mainly the issue of lists of allowed ingredients, preservatives and dyes which should be mostly the same as in the EU. Certainly the quality of our preparation and understanding of the markets will play a significant role in the process of developing sales in these countries. At the same time, we can assume with a high degree of probability that the effort put into this process will pay off and give us a lot of satisfaction in the form of quick sales growth - concluded Mr. Winiarz.

Polish cosmetics sector

Download: Polish cosmetics sector catalogue

Discover ASEAN - plan to export

The second day of the Forum introduced Polish producers to the ASEAN region, including regulations for the cosmetics sector, as well as the opportunities awaiting Polish entrepreneurs there. Mr. Rafał Jarosz, Business Development Manager at PAIH's Sydney office, pointed out that the main opportunities for doing business in the region include its large population, growing middle class, and digital transformation with the world's fastest-growing online trade.

Opportunities and barriers to entering individual markets in the region were the main theme of the presentation by representatives of six Foreign Representative Offices of the Polish Investment and Trade Agency. The elements of successful market expansion, consumer needs and cosmetic trends were discussed. The Polish Investment and Trade Agency also presented the possibilities of support for Polish companies in the process of internationalisation and entering new markets.

Due to the significant growth of e-commerce in South-East Asia, the Forum could not miss discussing this dynamically developing sales channel in the context of cosmetics.

The Southeast Asian e-commerce market is "ripe for the picking". Much has been written about the marketing and sales aspects of e-commerce, and these areas are clearly exciting. But no marketing or sales penetration will last if the products don't get into the hands of customers. So it's worth looking at your supply chain and the logistics behind it. This will be one of the key criteria for success in Southeast Asia - stressed Mr. Samuel Chan, VP, KAM, Group Sales, of Singapore Post Ltd.

Halal certification has also been discussed on the example of Indonesian and Malaysian market. The segment of these cosmetics is one of the fastest growing cosmetic segments in the world, and Asia Pacific is the largest market for halal cosmetics. Malaysia is a worthwhile country to have halal certification, although when it comes to cosmetics it is not a prerequisite. However, the halal logo increases the chances of reaching a large group of potential clients in Malaysia, and it is worth remembering that it is the third market in ASEAN in terms of purchasing power (after Singapore and Brunei) and a very developed cosmetics market. As Mr. Przemysław Zaręba, Head of the Foreign Representative Office in Malaysia, emphasizes: „Malaysia is also a leading halal economy in the world, e.g. in the category of cosmetics and pharmaceuticals, which is confirmed year by year by the results of the GIEI (Global Islamic Economy Indicator) ranking - this shows that investment in halal certification pays off in the long run and can help Polish companies to expand abroad in this market”.

- Indonesia as the most populous Muslim country in the world has become one of the potential halal markets with the progressive growth trend of halal and comprehensive direction of halal regulation. Companies intending to invest in Indonesia must consider the importance of halal certification for their products and refer to the current regulations that apply to products and services. Halal certified products can complement other market trends for organic and natural products. There is a huge potential acceptance for expanding this market among non-Muslim consumers who associate halal with environmental and ethical consciousness - noted Dewi Rijah Sari, the Halal Expert Consultant of dRs Consulta.

Karin Lohitnavy, Managing Director of MIDAS PR GROUP, talked about the importance of marketing activities for a new cosmetic brand present on the market.

- Cosmetics from Poland are not particularly popular in ASEAN countries - at least not yet. But this is something that can be changed with the right approach. My advice is to look beyond advertising and look for other ways to create the emotional connection that underpins purchase intent. Advertising can show images, but it's not exceptionally strong at telling stories and creating compelling narratives. And for Polish brands, "storytelling" can be the most effective way to enter a new market. There is nothing people like more than a good story and nothing sells better than a good story. Polish brands have a lot to tell, but as always, a good story needs to be well packaged and efficiently delivered - argued Karin Lohitnavy.

Pandemic has changed the market and consumers

Forum participants also shared their observations on the impact of the pandemic on business in the region.

Ms. Lee Pang, Chairperson of "ASEAN Cosmetics Association" in her introduction noted that: „Traditionally, business is about building trust and relationships. This has not changed in doing business in ASEAN. Referrals through contacts and networking can be considered a common practice. But the means to do so has now embraced being online and the realm of e-commerce. Therefore, live streaming and efficient delivery are essential for building trust and referrals”.

- When it comes to entering the Philippine market- you need to know consumer preferences. And consumers in the Philippines remain conscious of both price and product quality. Middle-income consumers are willing to spend on a product and brand they believe in - said Geraldine 'Dina' Estacio, President of the Chamber of Cosmetics Industry of the Philippines (CCIP).

It also discusses the impact of the ongoing pandemic on consumer behaviour and preferences in the luxury cosmetics segment.

There is no assurance that the market will quickly return to pre-Covid-19 levels in other categories. Pandemic has shifted business to the online channel, particularly in the skincare, fragrance and prestige segment categories. Covid has also changed its relationship with consumers. Customer support and additional sales services are now more important - concluded Jitha Thathachari, Group Head - Business Development, Strategy &Transformation of Luxasia network.

Teh Kong Yam - Managing Director, Shins Corporation (Malaysia) spoke about how Covid-19 has impacted the operations of leading retailers in the region.

First of all, a company should choose the right distributor and focus on working with the right one rather than many in a given market. Companies should avoid being too ambitious and aggressive. Key elements of business negotiations in Malaysia: we should understand partners' strengths and weaknesses, their potential and limitations. And finally: avoid being overly optimistic - said Teh Kong Yam.

The experts of the Polish Investment and Trade Agency emphasize: We hope that the information provided during the Cosmetics Forum will allow Polish companies to prepare for an effective foreign expansion into the region of South-East Asia, while the representatives of business from the region will perceive the potential of the Polish cosmetics sector and its main competitive advantages.

More information: Poland-ASEAN - Regional Cosmetics Forum

About Polish Investment and Trade Agency

The Polish Investment and Trade Agency (PAIH) is an advisory institution operating in cooperation with the Polish Development Fund Group (PFR) under the direction of the Ministry of Development and Technology. PAIH is the first point of contact for exporters and investors. It operates both in Poland and through a network of offices around the world. It strengthens the recognition of Polish brands on international markets, promotes domestic products and services and technological solutions made in Poland. The Agency helps entrepreneurs to choose the optimal path of expansion abroad. It also supports the inflow of foreign direct investments to Poland and the implementation of Polish investments in the country. PAIH cooperates with the public sector and regional partners, offering, among others: training, audit and promotion of investment properties, cooperation in the organization of business missions and communication support in the implementation of joint projects.

Polish Investment and Trade Agency

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