Despite the surge of e-commerce during the Covid-19 pandemic, luxury beauty brands are making a comeback in Southeast Asia's physical retail landscape.

According to leading data and analytics company GlobalData, these brands are partnering with omnichannel retailers to provide personalised shopping experiences and capitalise on the growing demand for premium beauty products.

“The premium beauty sector in Asia’s physical retail is thriving, driven by a combination of strong consumer demand, innovative retail strategies and an increasing emphasis on personalised shopping experiences," said Jaya Dandey, consumer analyst at GlobalData.  

"The high single-digit growth rates of prestige beauty categories is notable even in the context of broader retail performance, where beauty products are often seen as high-margin categories that outperform other areas such as food sales.”

Tim Hill, key account director, SE Asia for GlobalData, noted: “Consumers are becoming more discerning, not only regarding product quality, but also in terms of the shopping experience. They like to try multiple products in person before making an informed choice, especially in the premium domain where prices can run high."

Hill also notes that while brands are eager to enter the Southeast Asian market, they often face infrastructural challenges.

"A key strategy to overcome this is to partner with omnichannel players such as beauty e-commerce giants, which are increasingly moving into the physical retail space," he advises.

Southeast Asia's burgeoning upper middle class is driving the demand for luxury beauty products.

GlobalData's 2024 second quarter (Q2) consumer survey found that 34% of respondents in the region believe high-quality ingredients are worth the premium price.

Luxasia, a leading beauty and luxury network, has been instrumental in helping brands enter the Southeast Asian market. It recently launched escentials, an omni-retail concept for luxury fragrances, in Vietnam, while SK-II has opened a unique concept store in Malaysia.

“By returning to the essentials of the beauty industry — where sensory experiences are paramount — brands can cultivate customer loyalty in a competitive market," concludes Dandey.  

"As the premium beauty sector evolves, embracing omnichannel strategies and personalising experiences will not only ensure success but also foster enduring relationships with discerning consumers, shaping a vibrant future for beauty retail.”