GCI Magazine

Segments Sponsored by

Email This Item!
Increase Text Size

Indonesia Looks to Boom in Professional Hair Care

Posted: May 1, 2013

Kline Blogs posted “Hair Apparent: Is Indonesia the Next Big Salon Hair Care Market?” As Southeast Asia’s most populous nation and its largest economy, Indonesia has been blessed with rapid growth and finds itself in the middle of a consumer spending fever that is likely to continue for years. While the familiar emerging markets of Brazil, Russia, India and China have slowed down or even declined, Indonesia keeps attracting foreign investors. A recent New York Times article notes that in the first quarter of this year alone, foreign investment in Indonesia has soared by 27%, with particular emphasis on the Indonesian consumer.

Hand in hand with the country’s fast-growing middle class, swelling by an average of seven million people per year since 2003, consumers in Indonesia feel the desire to adopt professional beauty services and are willing and able to spend money on their appearance, especially for salon hair care products. This is reflected by Kline & Company’s findings in Kline’s Salon Hair Care Global Series: Market Analysis and Opportunities. Although the Indonesian hair care market is still modest in size—being less than 5% of the U.S. market—it has enjoyed a CAGR of almost 10% since 2007.

With its near quarter-of-a-billion-strong population, a median age of less than 28, and growing spending power and awareness, Indonesia has the means and energy to spend on looking attractive. This is widely promoted by the Korean pop phenomenon known as K-pop. In K-pop, the visuals and looks matter as much as the music does. The striking hair styling and makeup, encapsulated by K-pop idolatry, is storming the cosmetics and hair industry, resulting, among other trends, in a hair coloring boom among the country’s youth. Of particular note, the cultural acceptance of K-pop-inspired hair coloring and styling is one of several significant and telling changes in consumer behavior, and this also leads to an increasing demand for salon products and services.

Right after the strong demand for hair coloring products, straightening and perming products are the second largest category, with a sizeable market share. Traditionally, hair straightening products have performed very well in the Indonesian market, as Indonesian women tend to have a strong preference for straight hair.

Muhamad Chatib Basri, chairman of the Investment Coordinating Board of the Republic of Indonesia, notes, “Even though [foreign investors] have to deal with the problems of bureaucracy and infrastructure, the returns are higher than if you invest in Europe and the U.S. now.”

Radiating consumer confidence and trusted by foreign investors, Indonesia offers a vast potential for the cosmetics and hair care industry.