Researching Consumers’ Aspiration is L’Oréal’s Key Strategy to Determine Innovation for Indonesia’s Cosmetic Market

The beauty industry in Indonesia is rising rapidly and has grown an average 1.5 times above the GDP (Growth Domestic Product) over the past decade. To illustrate, Indonesia’s beauty industry in 2018 grew 7% with a market value of approximately Rp40 trillion, followed by a 6% growth in this year’s first semester. L’Oréal, as the world leader in the beauty industry with 40 years reach in the Indonesian market, fully understands this potential and centralizes its strategy for winning the market by using a consumer centricity concept.

 

At a media roundtable session at L’Oréal’s head office in Jakarta, Umesh Phadke, President Director of PT L’Oréal Indonesia explained, “There are three aspects that trigger the growth of Indonesia’s beauty industry. First, young consumers that are dynamic, digital-savvy, at average age of >30 years old, want to look good, and are optimistic of the future. They easily get the latest beauty trends from their smartphones. Second is the modernization of retail and e-commerce that allow consumers across Indonesia to access latest innovations in the beauty industry. Third is the modern Muslim women who are either entrepreneurs or have a professional career path whom trigger the increasing demand for self-care products and look more presentable.”

 

Umesh then explained that, in general, L’Oréal carries out three key strategies to win the beauty market in Indonesia. “To compete in today’s era, a brand can no longer impose product concepts to be immediately accepted by the consumers. The strategy needs to start from the consumers’ aspirations – or consumer centricity – to determine product concepts that best suit their needs.”

 

On consumer centricity, Aswaina Seroja (Wina), Chief Consumer Officer L'Oréal Indonesia, explained that L’Oréal implements Consumer Connect initiatives to personally interact with every consumer segments in Indonesia. “Consumer Connect consists of two programs, which are Beauty Online Panel with advanced consumers and Home Visit Immersion with general consumers. Both initiatives allow us to know closer of our consumers as well follow the latest beauty trend developments, which in the end, our innovation and communication are implemented according to their needs,” explained Wina.

 

The second strategy is to create cutting-edge product innovations that effectively answer the aspiration of the consumers. For 110 years as a science-based company, L'Oréal continues to develop innovative products by integrating consumer aspirations with science as the core of collaboration between the company’s Consumer & Market Insight division and Research & Innovation division; therefore, L'Oréal can consistently offer innovative products and services that are relevant to the climate, culture, and behavior of local society.

 

Shean Lim as L'Oréal Indonesia's Head of Research & Innovation, explained, “Modern Muslim women are the consumers that have attracted much attention these days because of their specific beauty rituals. An example of product innovations that we have done through ethnographic research is L'Oréal Paris UV Perfect Matte & Fresh SPF 50/PA ++++ that gives maximum sunlight protection yet also capable of preventing make-up line marks around the hijab area.”

 

The third strategy is to create the connection of relevant products for local consumers. On this, Umesh emphasized, “Selecting an effective communications medium, through the right personality figures, personal experiences on trying out and choosing the right products, and promotions carried out at important moments such as holiday seasons, Christmas and Ramadan, plays an important role for consumers in deciding which product to bring home.”

 

Umesh used Garnier as an example for a brand that has thoroughly implemented all three strategies in aiming for modern Muslim consumers in Indonesia. “Garnier is formulated with using natural ingredients, offering affordable innovations such as Garnier Serum Mask and Micellar Water available at nearby stores. Garnier does not only target women but also men with Garnier Men products and adapts relevant communications too by having Bella Almyra as a young and modern Muslim woman. As the no. 1 skincare brand in Indonesia, Garnier is also 100% Halal-certified, produced at the Halal-certified L’Oréal factory in Cikarang and stored at our also Halal-certified warehouse facility in Bekasi,” concluded Umesh.