TANGERANG, 22 July 2019 – Indonesia’s beauty industry is currently one of the country’s fastest-growing consumer sectors. According to the Ministry of Industry, the total value of Indonesia’s cosmetics market reached Rp46.4 trillion in 2017 and was projected to exceed Rp100 trillion by 2020.

However, the continued growth of Indonesia’s beauty sector will depend on how quickly business owners, regulators, and other stakeholders can address the challenges ahead. Against this backdrop, an Executive Vice President at SIRCLO, a technology company providing Channel Management Solutions, shared several insights into the development of Indonesia’s cosmetics industry, particularly across digital channels.

Compared with more technologically advanced and mature markets, Indonesia still has room to catch up. In China, e-commerce contributes as much as 40% of cosmetics industry sales, while in Indonesia the figure remains below 7%. “Indonesia’s digital market is still maturing, which means we remain behind some of these markets. Even so, year-on-year growth has been strong and significant. Over the next one to two years, online channels such as e-commerce are expected to contribute around 7% of total sales,” said Rinaldi Tjhin, Vice President at SIRCLO. “Rather than viewing this as Indonesia falling behind, we should see it as a significant opportunity with considerable growth potential.”

This potential is driven not only by optimistic market projections, but also by several characteristics unique to Indonesia. “Indonesia is the largest market in Southeast Asia. Its large population not only points to considerable future purchasing power, but also to significant untapped opportunities for business development,” Rinaldi explained. “We aim to act as a catalyst for this growth by deepening our understanding of the challenges faced by sellers and beauty brand owners, and by providing solutions that address their needs effectively.”

Rinaldi emphasised the importance of understanding consumer needs within each market segment. In the beauty and wellness industry, for example, personal care and cosmetics are both essential categories, but they respond to different consumer priorities. “When it comes to factors such as product value, colour, pricing, halal considerations, and brand preferences, there are many details that need to be understood in order to develop and promote products that truly meet the needs of Indonesia’s beauty consumers,” he added.

This is where channel management solution providers such as SIRCLO can play an important role. “As a technology company, SIRCLO can help brands gain direct insights into consumer needs and translate them into more efficient, accessible, and timely sales processes. Our technology can also help accelerate this development, with the ultimate goal of bringing sellers and consumers closer together,” said Rinaldi.

Beyond technology, driving further growth in Indonesia’s beauty market and digital sales will also require addressing challenges such as internet penetration and logistics. “Fortunately, the government has shown strong support through infrastructure development. One of the clearest examples is the expansion of fibre-optic networks across the country. From a regulatory perspective, we also believe the government will continue to take the development of e-commerce into account,” he explained. “To address logistics challenges, SIRCLO also works with trusted logistics providers to ensure greater transparency and accuracy throughout the process.”

Rinaldi added that another major challenge lies in mindset, as many businesses are still adapting to more digital ways of working. This can affect everything from operational readiness and marketing to budgeting and human resource management. “How dynamic and agile a business is in adapting to the digital landscape can play an important role in determining its success, particularly in a fast-growing sector such as beauty,” Rinaldi added.

This is where channel management solution providers such as SIRCLO can play an important role. “As a technology company, SIRCLO can help brands gain direct insight into consumer needs and translate that understanding into sales processes that are more efficient, accessible, and timely. Our technology also enables this development to move faster, with the ultimate goal of bringing brands and consumers closer together,” said Rinaldi.

Beyond technology, further growth in Indonesia’s beauty market and digital sales will also depend on addressing challenges such as internet penetration and logistics. “Fortunately, the government has shown strong support through infrastructure development, including the expansion of fibre-optic networks across the country. From a regulatory perspective, we also believe the government will continue to take the development of e-commerce into consideration,” he explained. “To address logistics challenges, SIRCLO also works closely with trusted logistics providers to ensure greater transparency and accuracy throughout the process.”

Rinaldi added that another major challenge lies in mindset, as many businesses are still adjusting to more digital approaches. This, in turn, affects operational readiness, marketing, budgeting, and human resource management. “How dynamic and agile a business is in adapting to the digital landscape can play a significant role in determining its success, particularly in a fast-growing sector such as beauty,” Rinaldi added.

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About SIRCLO

Founded in 2013, SIRCLO is a leading e-commerce solutions company in Indonesia, helping brands grow their online presence. SIRCLO offers four business solutions: SIRCLO Store, SIRCLO Connexi, SIRCLO Chat, and SIRCLO Commerce. SIRCLO Store is a Software-as-a-Service (SaaS) platform that enables small and medium-sized local businesses to build template-based online stores. SIRCLO Connexi provides an interactive dashboard for managing sales across multiple e-commerce platforms in Indonesia. SIRCLO Chat offers a conversational commerce platform through an interactive dashboard integrated with the WhatsApp Business API. Meanwhile, SIRCLO Commerce provides end-to-end channel management solutions to support enterprise brands in expanding into online distribution channels.

In May 2020, SIRCLO officially merged with ICUBE, a Magento Premier Solutions Partner in Indonesia, strengthening its e-commerce technology development capabilities and expanding its offering with Swift, an omnichannel e-commerce builder. SIRCLO Store has powered the creation of more than 100,000 websites and supported 3,000 brands in growing their businesses online, including ATS The Label, Benscrub, Evete Naturals, Namaste Organic, This Is April, and Heytimmy Kidswear. SIRCLO is also trusted by dozens of clients representing more than 200 leading brands, including Unilever, Reckitt Benckiser, KAO, L’Oréal, Eiger, and Levi’s. Headquartered at Green Office Park 1, The Breeze in BSD, Tangerang, SIRCLO currently employs 500 people, with representatives based in Bandung, Yogyakarta, and Surabaya.

For more information about SIRCLO, visit www.sirclo.com.