Local cosmetics, toiletries cos dominating market (The Financial Express (Bangladesh))

Local cosmetics and toiletries industry continues to dominate the domestic market gradually with the sector posting a double-digit growth over one and a half decades.

Presently, the local manufacturers hold around 60 per cent share in the domestic cosmetics and toiletries market compared to only 40 per cent in the late nineties.

The robust growth of the sector over the last 15 years has turned it into one of the vital money-spinning areas with an annual turnover of approximately Tk 150 billion, insiders said.

Industry insiders have attributed such a significant growth to diversification of products along with supplying quality goods at competitive prices.

They also said massive consumerisation coupled with a rising purchasing capacity of the middle-income generation has been helping it to become a mammoth cosmetics industry.

Apart from ensuring quality, expenditure in advertisement, in most cases, emerges as the fate-deciding factor of a newer product, they said.

Data of Bangladesh Cosmetics and Toiletries Manufacturers Association (BCTMA) showed that the industry has employed 0.5 million people and its annual turnover reached Tk 150 billion in 2014 of which local players including national and multinational companies contribute Tk 90 billion.

A large number of products which are mostly used by the higher-middle and upper class of people are still being imported.

Personal care products like beauty soap, laundry soap, detergent, shampoo, conditioner, lotion, face wash, fairness cream, face powder, talcum powder, toothpaste, tooth brush, shaving kit, hair oil, sanitary napkin, colour cosmetics like lip gel, perfume, hair gel, hair dye, wig, lipstick, lip-gloss, lip-liner, eye shadow, eye-liner, kohl, nail police, nail police remover, other make-up items, home care items like bathroom cleaner, and dish cleaner have enriched the product basket of the sector.

President of BCTMA Md Rezaul Karim said the industry has been able to maintain an average 10 per cent growth year-on-year basis for last one and a half decades following an increasing demand.

He said the sector depended on import for more than 60 per cent of its products before 2000 but the figure has now been reverse largely thanks to local producers.

Purchasing capacity uptrend both in urban and rural areas have had the major influence in expansion of local cosmetics industry, he said.

Beauty soap, shampoo, toothpaste, fairness cream etc have now been common items even at every village home.

“More than 35 million households in the country have made Bangladesh one of the lucrative consumer markets and our opportunities lie within it,” he added.

“The sector also has been gifted with above Tk 100 billion investment in this millennium”, said Mr Karim, also managing director of Kohinoor Chemical Co Ltd, an sister concern of Orion Group.

According to the Bangladesh Bureau of Statistics (BBS) survey 2010, nine companies including Unilever Bangladesh, Kohinoor, Square, Keya, Kashem Group, Kollol Group, Moushumi Industries, Delta Group and Aromatic (Aromatic soap is now acquired by Kollol Group) hold more than 95 per cent of the market share of local products.

The BBS survey based on sale of soap, detergent, personal care products revealed that Unilever holds 45 per cent while Kohinoor 20, Square 18 and Keya 13 per cent annual market share.

But, taking into consideration only the winter season, locally-owned Square was the market leader with 40 per cent of overall sale, the BBS data revealed.

Kohinoor and Keya also enjoy high sales as their market share rose to 25 per cent during the cold season, according to BBS survey.

Unilever, in which the government of Bangladesh has a 39.25 per cent share, started its operation from its Kalurghat Plant in Chittagong in 1963 by manufacturing Lux soap.

Lux, Dove and Lifebuoy bath soap, Fair and Lovely and Pond’s fairness cream, Pepsodent and Closeup toothpaste, Wheel, Rin and Surfexcel detergent, Vim dish washer, Rexona, Sunsilk and Clear shampoo are the cosmetics and toiletries items manufactured by Unilever in the country that sell abundantly.

Media Manager of Unilever Bangladesh Tanveer Faruque told the FE that 98 per sent households in the country use at least one product out of 18 brands of the company.

Company secretary of Kohinoor Chemical Co Md Ferdows Jaman said the oldest cosmetic company in the country has now 35 products, of which Tibet brand comprises 19 items.

He said product diversification according to the consumer demand, maintaining quality is the key to success of the industry.

He said the company, better known for its brand Tibet, received Tk 2.96 billion from the customers in 2013-14 which was Tk 2.72 billion in 2012-13.

Tibet Snow, Tibet Lip-Gel, Tibet 570 laundry soap, Tibet beauty soap and Sandelina soaps are some unique brands of the company.

Square Toiletries Ltd (STL) has also emerged as one of the major market players now with its brands such as Meril, Chaka, Select, Kool, Shakti and Senora.

Nearly 70 per cent customers rely on Meril baby lotion, Lip-gel, Petroleum Jelly, Meril Chap-stick in winter in Bangladesh, Malik Mohammad Sayeed, an official at the marketing division of STL said.

He said the Meril soap, especially the Meril Splash, has gradually been grabbing the market share of beauty soap.

Senora has captured 90 per cent sale of sanitary napkin and it has made the country almost self-dependent on the item, according to the STL official.

Vice-president of BCTMA Munir Ahmad Khan said apart from the quality, advertisement in the audio-visual media is very important for existence in the market especially for the newer players.

He said the electronic media plays a key-role in expanding the market of makeup products through promotional coverage.

However, he pointed out that imports still contribute more than 40 per cent of the market.

However, only 35 per cent import is done through formal channel while the rest is done illegally, he said.

According to the Bangladesh Cosmetics and Toiletries Importers Association (BCTIA), beauty products of almost all renowned international cosmetics brands are imported into Bangladesh and those are largely high-priced.

The world majors in this sector include Johnson and Johnson, L’Oreal, Revlon, Estee Lauder, Max Factor, Avon, Maybelline, MAC Cosmetics, Garnier, Elizabeth Arden, Lalique, bareMinerals, BeBeautiful, Chanel, Clinique, CoverGirl, Crabtree and Evelyn, Dior, Essie, Frederic Fekkai, Fusion Beauty, Giorgio Armani, Guerlain, Nivea, Lakme, Emami, Nior, Jordana├é┬Žall could be found in Bangladesh.

Most of foreign cosmetic products are imported from the USA, Germany, France, Italy, the Middle East, China, Thailand, India and so on.

According to the BCTIA, imported products worth Tk 60 billion are sold annually in the country.

General secretary of the association Jahangir Alam told the FE that more than 40 per cent are counterfeit products in the market which has made it difficult for their business to sustain.

“Smuggled products have more chance of being substandard as those enter the country without facing any regulation,” he said.

However, he pointed out that expansion of nearly 0.2 million beauty parlours, has made people more conscious about their beautification which helps the sector to have massive growth.

According to BCMIA, Johnson and Johnson products and Parachute coconut oil are two most sold imported products in the country.

M F Consumers Ltd, a sister concern of Maltimode Group, supplies Johnson and Johnson lotion, powder, soap etc in the country.

Economist Dr Khandker Mustahidur Rahman said the immense consumerisation from the nineties with increase in purchasing power of the middle-class adds to this market expansion.

“There has been a significant growth of the market as it is one of the higher female labour markets within the Asian region; so it has been one of the priority sectors for the government and the private sector in Bangladesh,” he said.

“There are many problems in the sector, but with the convenient geographical advantage together with availability of less expensive technical personnel, abundance of skilled and semi skilled manpower, Bangladesh has a very good opportunity to develop the cosmetics and toiletries industry,” he said.

“Consumer products growth in Bangladesh is about 9-10 per cent while it is less than 7.0 per cent in its neighbouring and competitive countries like India and Pakistan,” he said.

“With companies’ focus shifting to e-commerce, travel retail, and emerging markets, its growth has been rapid and the momentum is expected to sustain,” he added.

According to the Export Promotion Bureau (EPB), the cosmetics and toiletries sector exported goods worth nearly Tk 235 million ($30m) in the last fiscal year (FY’15) mainly from soap and perfume.

The BCTMA data also revealed that cosmetics companies imported chemical compounds and ingredients worth Tk 5.0 billion in the same fiscal year.