Jaya Dandey, Consumer Analyst at GlobalData commented:
“The premium beauty segment in Asia’s brick-and-mortar stores is growing due to a combination of strong consumer demand, innovative retail strategies, and an emphasis on personalized shopping experiences. It is also noteworthy in the context of broader retail performance, where beauty products are often seen as a high-margin category, outperforming other areas such as food sales.
Luxasia, Southeast Asia’s leading network in beauty and luxury goods, has enabled several brands to enter and penetrate the market. The company recently captured the Vietnamese market by launching Essentials, an omni-retail concept for luxury fragrances, in one of the country’s upscale shopping malls.
Premium skin care brand SK-II has also opened a unique concept store at Mid Valley Megamall in Kuala Lumpur, Malaysia. Indian beauty e-commerce giant Nykaa is aggressively expanding its brick-and-mortar retail space across the country.
The study found that consumers are willing to try out multiple products before purchasing. This is especially true in the premium beauty space where products are priced high. Retailers with in-store consultation areas can increase customer engagement with a variety of brands.
Till Hill, Key Account Director for Southeast Asia at GlobalData, said:
“The ability to integrate online and offline experiences is essential to survive in this rapidly changing environment. Maintaining a robust omnichannel presence allows retailers to connect consumers across a variety of platforms, including online and in-store. This strategy not only caters to a variety of shopping preferences, but also ensures that brands continue to reach a broader audience. We can leverage our online success while maintaining our presence, creating a seamless shopping experience for our consumers.”
According to GlobalData, the rise in brick-and-mortar stores in Southeast Asia is due to the upper middle class’ willingness to splurge on luxury beauty products and international brands.
GlobalData’s Q2 2024 Consumer Survey reflects this, stating that “approximately 25% of respondents consider lower prices to be good value for money when purchasing beauty and grooming products. and an even higher number (34%) said that high-quality ingredients are good value for money.”
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