Consumers turn to local cosmetics

JAKARTA (JP): Whether there is an economic crisis or not, cosmetics, in the words of a beauty expert, are "a second skin to urban women".

Claudia Angelique, a skincare and make-up facilitator at John Casablanca's Modeling and Career Center, says this need for cosmetics -- a basic commodity for the image conscious -- "helps a great deal with one's personality and one's emotional status".

She reiterated that a bright face, good hair and fashionable wear were all social needs for urban women, particularly those serious about their careers, to be recognized and accepted in their own social circles.

Students coming to the modeling center include career women who want to learn social graces and ways of beautifying themselves "in order to be socially acceptable", she said.

Noting the effect of the crisis on cosmetics prices, Claudia said consumers here tend to look down on local products, even though local brands are well accepted abroad.

"If they (local brands) are popular with foreigners, why aren't they acceptable to our own people?"

One reason may be that the higher price of imports adds to the prestige.

But urban women, who have to think of their other needs -- particularly if they have families to feed -- have finally looked to local brands.

The skyrocketing prices of imported cosmetics by an average of 200 percent to 300 percent for fragrances and 100 percent each for color cosmetics, haircare and bodycare has led consumers to make the switch from imported brands to quality local ones.

Coordinator of the Local Cosmetic Producers Association Intony Yuswanto said that he had received several reports from both local and imported cosmetic counters that people were opting for local brands.

The reason: an "incessant need" for cosmetics and the doubling of prices for imported cosmetics, he said.

Intony, a senior coordinator of local cosmetics at PT Martina Berto -- a cosmetic firm that is the source of Biokos, Sari Ayu, Belia, Mirabella, Cempaka, Madonna and Savitri brands -- said the prices of PT Martina Berto cosmetics would jump 20 percent to 30 percent "some time next month or in the next two months".

"It is being done gradually as we cannot afford to shock local markets during these times," Intony said.

Prices of PT Martina Berto cosmetics increased 20 percent last October and another 20 percent price hike came into effect on Feb. 1.

Intony said that the monthly turnover of PT Martina Berto cosmetics -- which holds the largest market share (16 percent to 17 percent) of local cosmetics -- was "a good Rp 15 billion to Rp 20 billion" in February.

Despite having enjoyed a growth rate of 20 percent for the past few years, there was "a big possibility" that PT Martina Berto might not even be able to break-even this year, Intony said.

"Among other things, this will be due to the sharp increase in the prices of raw materials."

He mentioned that with raw materials now more expensive, it would not take long for small producers of local cosmetics to fade away.

"Everything has gone up by 100 percent. It is 100 percent more for packaging materials. Plastic has gone up 100 percent and others have at least gone up 50 percent."

Intony said there were several cosmetic firms, like Mustika Ratu, for instance, which were prolonging their terms of payment.

"Some are going from the normal two weeks to a month or more."

Project manager of the Indonesian branch of Loreal cosmetics Philip Giles said local cosmetics might be on a high at present but they have huge foreign debts to service in the long run.

"I am sure that the company structures of local cosmetics as a whole are doing good business now, but they are fast reducing their investments in media," Giles said.

"They will not be able to afford to make credit payments when they come due as most of the raw materials used for local cosmetics are imported as well."

For the first time imported cosmetic and fragrance products are receiving "a different set of customers", he said

"Opportunists from abroad, like entrepreneurs and mostly wholesale traders... are buying cheap imported goods here for reexport.

"I have heard of traders just going to Sogo and buying stocks or those buying in bulk... prices are still much cheaper here than Singapore or Hong Kong." (02)