Cosmetics is increasingly becoming indispensable to people's modern lifestyles, especially to the younger generation and working women. As people place more importance on beautification and personal care, the demand for personal care products continues to increase worldwide, including in Malaysia. To fulfil this need, Malaysian cosmetics businesses can consider expanding their business overseas, shipping internationally from Malaysia. However, businesses need to overcome the associated challenges associated with exporting, such as the risk of spoilage and temperature control. This article provides a guide on what you need to know about the cosmetics industry and how to ship internationally from Malaysia.
In 2019, the cosmetics market was estimated to be worth US$380.2 billion, according to Allied Market Research. Although the industry initially experienced a decline due to the pandemic in 2020, it quickly recovered and is expected to grow at a rate of 5.3% per year to reach US$758.4 billion by 2025, reports Statista..
The market for cosmetics in Malaysia was valued at US$804.5 million in 2019 and is expected to grow at an annual rate of 8.1% to reach US$1,288.7 million by 2027, according to the former report above.. The most popular cosmetics in Malaysia include skin care and sun products, hair care products, deodorants and perfumes, and make-up products, with notable local brands like Breena Beauty, Jeanie Botanicals and Velvet Vanity dominating the market. .
The global cosmetics market can be divided into four regions based on geography. Asia-Pacific dominates this market and is expected to grow at an annual rate of 6.5%, according to the above statistics from Allied Market Research.
This region includes China, Japan, India, Australia, New Zealand, South Korea, and ASEAN states. North America, which includes the USA, Canada, and Mexico, is also a lucrative market for the export of Malaysian cosmetics. The next region is Europe which includes the UK, Germany, and France as the main importers of cosmetic products. The last region is LAMEA, which includes Brazil, South Korea, Turkey, and Saudi Arabia.
In Malaysia, the government and the Department of Pharmaceutical Services (DPS) regulates the manufacturing, sale, and importation of cosmetic products in the following manner:
All cosmetic products must be notified before manufacture, sale, supply, or shipping from Malaysia.
All cosmetic products must adhere to the Cosmetics Good Manufacturing Practice guidlines, including make-up, shampoos, lotions, oils, and other products.
According to the Guidelines for Control of Cosmetic Products in Malaysia, the products must not include ingredients listed in the Poisons List, Annex I, Annex II, and the first part of Annex III. Similarly, the products must not include ingredients other than those listed in Annex IV, V, VI, and VII.
The relevant authorities must authorise how these cosmetics are manufactured, sold, and imported.
There are certain regulations for shipping Malaysian cosmetics abroad. Any cosmetic products not manufactured according to the above guidelines are not allowed to be shipped abroad. Some countries impose import taxes and duties on imports depending on the type of product, its quantity, and the declared value.
Information on these duties and taxes can be obtained using the HS codes for the imported products and checking them in the relevant tariff schedules before shipping cosmetics from Malaysia. Certain restrictions may apply to the importation depending on the country into which the cosmetics are imported. These include the following:
Some countries require certificates of origin, sales contracts, original labels, product licences, commercial invoices and label registration. These countries include China, Singapore, and the USA.
Certain countries require an import permit to import cosmetics as they classify them as prohibited products. Indonesia is one such country.
Countries, such as Australia, ban the import of cosmetics containing cannabis or cannabidiol oil (CBD).
Some countries restrict the import of perfumes and other liquid products containing alcohol.
Cosmetic companies should target distribution channels to achieve better sales and higher profits. According to Allied Market Research, the most popular and trending global distribution channels include the following:
Based on the above statistics, hypermarkets and supermarkets held the largest market share in 2019 due to the convenience and availability of a wide range of consumer goods under one roof. This trendy distribution channel is expected to remain dominant until 2027. Hypermarkets are followed by speciality shops, pharmacies and online distribution channels in terms of global trends and popularity.
Malaysian cosmetic companies should consider these distribution channels when exporting abroad in order to be able to capture a larger target market to increase sales and revenue.
There are many things to take note of when shipping cosmetics from Malaysia, such as the packaging and regulations. Apart from this, having a good understanding of ways to establish your global target market is also essential. Doing so would allow your business to expand your reach and retain your customers effectively.