Cosmetic Industry In Thailand

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2.7 Cosmetic Industry in Thailand Predicted by World Bank to recover in 2011, Thailand economic recession does not allow both international and local business to prosper now (Rashmisrisethi, 2008.). Unexpectedly, cosmetics market in Thailand has been competitive and grown continually during the past few years (US. well. Cosmetics including make-up products are available to consumers through three channels: direct sale—the most effective channel to initiate new medium and low-end cosmetic products in the market, counter sale—a standard channel for marketing high quality/price and well-known internationally well-known brands and hanger sale—marketed toward younger consumers and the mass market for medium and low-end cosmetic products (US commercial…show more content…
Luxury brands such as Estee Lauder, Clinique, Shiseido, Christian Dior and Lancome represent more than half of the imported brands. Perfume from France represents up to 56 percent share since 2005. The perfume products from the U.S. are ranked second and had about 17 percent share of the market (US commercial service, 2008). The overall growth rate of the cosmetic products market in Thailand for 2007 is expected to be approximately 10 percent compared to 8 percent for 2006 even when the Thai political situation was seen unstable since 2006-2008. From such perspective, Thailand is seen a growing market with a very strong group of potential buyers. Part of the reason of continual growth in Thai cosmetic market is due to the increasing number of young female consumers. According to Sung (2006) Thailand has a very young population. This segment also has high spending power and eagerness to spend. Thailand has been exposed to international fashion media from both the east: Japan, Korea and the west: America, Europe and Australia. Consequently, beauty items from the other cultures, when introduced to Thailand, can attract many young consumers to try (Chaisitthiroj, 2007). Furthermore, the majority of cosmetic consumers in Thailand are female (97 percent) who are over 18 years of age. It is estimated that 15 million Thai people apply cosmetic products regularly and spend…show more content…
The number of young Thai females using make-up and skin care cosmetic products is increasing dramatically (Phupoksakul, 2005, resulting in the introduction of several medium-range cosmetic brands from Japan, South Korea and Taiwan to the Thai market. The cosmetics market in Thailand is concentrating cosmetic brands, suppliers and distributors (direct sale, counter sale and hanging sales). In order to maintain the market share, they frequently introduce new products that offer a problem-solving ability such as anti-wrinkle products and brightening products. Moreover, the cosmetics companies invest a large portion of money in promotion and advertisements (Phupoksakul, 2005). It is claimed that there are three distribution channels for cosmetic products in Thailand, namely direct sales, counter sales and stall or hanging sales. First, direct sale is the most popular selling method in Thailand and accounts for 60 per cent of the total sales, but this sales channel is only suitable for medium- to low-range cosmetic products. Second, counter sales are mostly located in department stores, and offer a suitable and effective channel for luxury cosmetic products. The last sales channel is stall or hanging sales – a major sales channel for low-end and local cosmetic products (Phupoksakul, 2005;
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