The key players in Indonesia’s beauty commerce space (update)

Beauty commerce is one of the verticals that rode the ecommerce wave amid the pandemic. Even now, years after the first Covid-19 lockdowns were put in place, and with rising inflation squeezing disposable income, the global beauty market is still expected to grow by 6% a year from now until 2027.

In an Indonesia-focused survey conducted by research firm Jakpat, 81% of respondents said they shop for makeup products through ecommerce platforms, and 68% said they bought skincare products online.

Shopee remains the favorite among consumers for such purchases. According to market insights firm Compas, the Singapore-based company leads in ecommerce market share for the beauty and personal care category, with 63.5% in February 2024.

This year, the average Indonesian consumer is projected to spend US$27.2 on cosmetics and toiletries, up from US$20.2 in 2019.

And the country’s beauty and personal care market is expected to keep growing. Research firm Statista estimates that the segment in Indonesia will generate US$9 billion in revenue this year, with a compound annual growth rate of 18.7% from now until 2028.

One factor that supports this growth is the country’s demographics. According to government data, women made up 49.5% of its population in 2022, and most of them are of working age.

These trends have encouraged the creation of new startups in the beauty commerce sector. Many have built their own direct-to-consumer (D2C) brands combining sales channels through websites and ecommerce platforms such as Shopee, TikTok Shop, Sociolla, and Love and Flair.

While most of these brands are not VC-backed, several have raised funding, including Esqa, Rose All Day, Base, Somethinc, and Nama Beauty.

However, some brands are no longer active, including Norm, No Secret, and YC Combinator-backed Newman’s. Based on Tech in Asia’s observations, these companies are either no longer selling products through ecommerce platforms, their websites aren’t accessible, or they haven’t posted updates on social media for over a year.

In contrast, Sociolla, the leading beauty marketplace in Indonesia, has continued its aggressive expansion efforts offline over the past year. It currently has more than 60 physical stores across Indonesia, and just last month, it opened new ones in Jakarta, Surabaya, Bogor, and Cirebon. The company also entered Vietnam in 2020.

However, fundraising numbers fell significantly last year from US$100 million in 2022 to just US$5.4 million, which was from only one deal, an investment in Rose All Day.

SWC Global, DSG Consumer Partners, and AC Ventures participated in that investment round. The fresh capital came after the cosmetics firm grew its annual revenue by 4x in 2022, followed by a 6x growth in 2023.

Rose All Day, which was founded in 2017, attributes this to a combination of product traction, an increase in both online and offline distribution channels, and healthy customer retention. Similar to East Ventures-backed Esqa, Rose All Day also reported profitability after just 1.5 years of operations.