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One woman spent $40,000 on makeup over two years. Another racked up a $30,000 cosmetics bill in three years. While not every Singaporean spends as lavishly on beauty products, the average local consumer is willing and able to pay to look good. That is why research company Euromonitor estimates that the Singapore beauty and personal care market will be worth US$1.74 billion by 2021. This is no small sum.
The beauty brand that wants a share of that needs to understand who the Singapore shopper is and what she, or he, wants.
The Millennial consumer makes up a good part of the Singapore market. The largest generation in the workforce, the Republic has 1.25 million Millennials with women making up a little more than half of that number. They have either just started working or are striving to reach the crest of their careers. Putting their best faces forward is important to this crowd.
Because they are young, they are also adventurous. They have yet to settle on a brand and are less inclined to do so. What would sway their product choices are beauty trends and price.
On the down side, these young adults are not the most loyal of customers. In fact, in a survey by Singapore-based beauty magazine Daily Vanity in which 80% were under 34, almost all the respondents – 97% - said they would try new beauty products. On the up side, this means they are more easily wooed and won over.
Singapore is an ageing population. The median age of the nation is 40.8 years, almost a decade older than the global median age. While there may be more young people working, there are actually more people over the age of 45 in Singapore. Here is where the disposable incomes are. By this age, the consumer would be more established in her career and would have more to spend. For example, the median wage of an accountant in Singapore in her 20s is about $3,900. But by the time she is in her 40s, her salary would have risen to about $4,600.
Men in Singapore want in on beauty as well. The demand for male grooming products - cleanser, toner, moisturiser, eye cream, and even mask packs - in Singapore is expected to bring the value of the market to $141 million by 2021. Multi-brand beauty retailer escentials notes that while women spend about $250 to $400 with them, their male customers are not far behind. Their purchases come up to between $150 and $250. Korean brand Etude House reported a 10-fold increase in their sale of men’s products in just four years between 2013 and 2016.
The Singapore consumer is well-educated and well-informed. This makes them more discerning. Showy advertisements no longer suffice. What they count on are word-of-mouth recommendations and authentic reviews. In the same Daily Vanity poll, 94% said they would search for reviews before a purchase. 77% said they would not buy a product if it did not have a review. Brands will have to reach consumers in more creative ways. L’Oreal, for example, has resorted to story-telling. Its Beauty Squad campaign involves short videos and articles about beauty trends posted on social media by influencers. This taps on the influencers’ combined reach of some 5.5 million followers. escentials counts on providing immersive experiences to draw customers. At their stores, shoppers can try new products or brands. When they return home, there is post-visit personal research in the form of online reviews and offline recommendations. Others like Sephora offer online Skin Inc diagnostic tests to help customers find out their skin type and concerns.
Key players in Singapore’s cosmetics market in luxury products include L’Oreal, Shiseido, Estee Lauder and LVMH. The mass market brands that are big in the country are Beiersdorf and Procter & Gamble. Overall, French, US and Japanese beauty brands are the top choices amongst Singaporeans. According to the Global Trade Atlas, France dominated with 22% of local market share in 2015. The US followed with 11% while Japan had 5%.
However, the allure of Korean products among the younger shoppers is clear. In the Daily Vanity survey in which respondents were predominantly under 34, Korean beauty products reigned supreme. More than 30% picked Korean brands as their top choice.
Source: Daily Vanity
Singaporeans are spending more. BMI Research forecast a 6.5% increase in total household spending every year between 2018 to 2022, growing from US$$124.4billion to US$174.5 billion. Of this, 58% will be spent on non-essentials. There will also be more wealthy people. The majority of Singapore households in the upper-income segment with disposable incomes of US$75,000 and above are expect to account for 66% of total households in 2022, compared to 53% in 2018. Given this outlook, there is definitely a lot of room for luxury brands to grow and new brands to be brought into the country.
By 2021, there will be well over 4 million e-commerce users in Singapore. They present tremendous potential for brands to tap on. Thanks to the country’s push to be a Smart Nation, online shopping will only increase as going digital becomes easier. Already, shoppers are turning to online platforms to buy products not found in Singapore. American brand Huda Beauty has not launched in the country. However, Singaporeans are already enjoying its products. A large number of its website sales come from Singapore.