HONG KONG — With markets in Europe and North America still somewhat sluggish, the beauty industry is looking to Asia for growth. As a result, Cosmoprof Asia has now become a destination fair.
Foot traffic at the three-day event, held from Nov. 12 to Nov. 14, was very heavy, with 60,000 visitors. That is a slight dip from last year’s 60,985 visitors, which represented a 10 percent jump from 2012.
The number of exhibitors rose 9 percent to 2,362 while the exhibition area increased 7 percent to 81,500 square meters. Despite its enormous size, the convention center was packed; exhibitors looked a bit overwhelmed at times. Cosmoprof Asia is the largest cosmetics show in the region. Though smaller than the one in Bologna, it is larger than the one in Las Vegas.
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“People didn’t used to have these types of products, and now, because they have more money to spend, the market is still scratching at the surface,” said Michael Duck, executive vice president of UBM Asia, the show’s organizer.
Indeed, sales of cosmetics in China now eclipse sales of groceries as the largest-selling item in department stores, according to a report from the Fung Business Intelligence Center.
Chinese made up the majority of buyers and Mandarin Chinese dominated on the show floor. Highlighting the importance of Chinese buyers, fair organizers again set up a separate Chinese buyers lounge.
European and American exhibitors said they were looking to expand in fast-growing markets such as Asia, while Asian exhibitors said they were looking to expand their reach in the region, as well.
Though the financial crisis has slowed sales of cosmetics in Italy, sales of natural products have done better, said Davide Bertocchi, export manager for Erbolario, an Italian skin-care brand. Even so, annual sales growth in Italy, at 5 percent last year, pales in comparison to sales growth in Asia, which has been about 15 percent a year, he said.
“It’s a good trend, a good market,” Bertocchi said, “we are domestic, Italian market-oriented and now we want to grow exports,” he added.
Erbolario’s biggest market remains its home of Italy, now generating 90 percent of revenue. The Italian brand expanded to Taiwan first and also distributes to Hong Kong, Malaysia and South Korea. Though it has been operating in these countries for some time, it has come to Cosmoprof for the first time to grow and find partners in other ones.
The skin-care maker is also targeting China, but being cautious because “it has so much potential, but is not easy at the same time. So we have to find the right balance,” he said.
Another European brand, Dermacol, a cosmetics company from the Czech Republic, was also at the fair hoping to expand its business in China, Vietnam, Malaysia and Indonesia, said Sviatlana Hvazdzitskaya, an export manager for Dermacol.
European brands generally have to pay a premium in Asia, due at least in part because of the added costs from shipping and duties. Despite this, Dermacol aims to keep prices in Asia at a maximum 30 percent higher, she said. Products are all made in the Czech Republic and will continue to be because “otherwise, we wouldn’t be a Czech brand anymore,” she said.
Natural skin-care and cosmetics were a big theme at the exhibition, with numerous exhibitors touting all-natural or organic ingredients. Among those was MyChelle, an American skin-care maker that is expanding to Hong Kong. The brand is in “beta” mode now, but will be distributed more widely in Watsons, Angel, CitySuper and Sasa.
Prices are about 20 to 30 percent higher than in the U.S., but on par with similar products. When comparing the brand with most other offerings in the market in Asia, “it’s a little more premium than your average skin care,” said Claire Robertson of Vitality Brands, the distributor for MyChelle.
Online sales were also an increasingly important part of distribution. Yadah, a five-year-old Korean skin-care brand that sells in Asia — including South Korea, Taiwan, Japan and Hong Kong — is hoping to expand to more markets in the region. Eunmee Anna Kang, chief executive of Yadah, said she is “focused on online shops because youngsters now play so much online.”