Cotton Wool/buds/pads Industry In Indonesia

Since the majority of cotton wool/buds/pads are distributed through grocery retailers, the expansion of convenience stores in particular led to very strong growth for these products. The change in consumer shopping behaviour towards modern retail channels (e.g., supermarkets/hypermarkets, convenience stores) further improved the performance of cotton wool/buds/pads. The total private label value share was 40% in retail value sales in 2009 due to the increasing popularity of private label cotton buds.

Current value sales of cotton wool/buds/pads grew by 8% in 2009, which continued the stable growth seen in 2008.

The price of cotton wool/buds/pads remained stable in 2009 with an average unit price increase of 1%. This is largely due to the fact that cotton buds and pads are mainly generic products with low brand loyalty. Another factor is the competitive pricing policy of manufacturers and retailers which is aimed at increasing volume sales.

The most popular product was cotton buds which had a 47% share of retail value sales in 2009. Cotton buds had the highest retail value of Rp109 billion in 2009.

The retail value share of cotton wool decreased by one percentage point to 38% in 2009. However, retail value increased by Rp5 billion or a 6% growth rate. This was due to growing hygiene awareness and better medical practices in Indonesia.

Growing hygiene awareness also increased the popularity of cotton pads for facial cleansing, especially with female consumers, and this increased the share to 15% in 2009. Retail value sales increased to Rp35 billion, which as an above average growth rate of 11%.

Growing health and hygiene awareness led to the reduced use of cotton buds for cleaning ears. This was due to the perceived potential damage and side effects.

There are no organic cotton wool products in Indonesia.

Private label lines had a 40% value share of cotton wool/buds/pads in 2009. The leading company with its own brand was Charmindo Mitra Raharja with 22% value share. Charmindo achieved this position by offering a range of products from budget to premium and launching new products with different uses under the Charmi brand.

Charmindo Mitra Raharja with its brand Charmi and Kapasindo Prima's Ideal performed well in 2009 due to the high quality image of their products and the strong distribution network in modern (e.g., supermarkets/hypermarkets) and traditional outlets (e.g., independent small grocers). Charmi also benefited from a new cotton buds range with different uses such as spiral tip, make up tip, swab and disposable ear pick cotton buds in addition to regular and baby cotton buds.

The award-winning and well-known cosmetics company Martina Berto launched its cotton pad Sariayu. However, the product is not yet widely distributed and was available in a limited amount of retailers in 2009.

Most cotton wool/buds/pads are manufactured by domestic companies. Raw cotton is grown locally, which makes Indonesian manufacturers of cotton wool/buds/pads competitive in international markets.

Cotton wool/buds/pads are not heavily promoted, except for in-store discounts, promotions in supermarket/hypermarket brochures and shelf positioning.

Private label products continued their strong performance in 2009 with a 40% share of value sales. Pasti brand of Alfamart retail chain and Indomaret brand continue to be the strongest of private label brands due to policy of only carrying their own brand of cotton buds in their outlets.

The launch of premium cotton buds by Charmindo Mitra Raharja has not yet been followed by the competition. However, the launch of premium cotton pads for facial cleansing and make up removal is expected in the forecast period in line with the growing awareness of health and hygiene.

Among lower priced products, the competition between private label brands and the smaller manufacturers’ brands of cheap cotton buds is an opportunity for large manufacturers to take advantage of their strong distribution networks to enter with a lower priced product.

The limited number of facial cleansing wipes currently available represents potential growth for cotton pads.

Cotton wool/buds/pads is expected to grow by a 4% constant value CAGR over the forecast period. Growing health and hygiene awareness and practicality are expected to influence growth. Cotton wool/buds/pads is not expected to achieve maturity in the forecast period.

Despite the growth of cotton wool/buds/pads, a large number of consumers are still using traditional substitutes such as water and the traditional reusable ear pick. The low level of marketing by manufacturers means the penetration of cotton products has only reached modern retail outlets (e.g., supermarkets/hypermarkets). Tissue products have become multi functional, but cotton wool/buds/pads are still limited to specific functions.

The low level of health and hygiene awareness in rural Indonesia will prevent growth especially for cotton wool and pads. Tissue is a widely available substitute for cotton wool and pads.

Branded products are expected to continue to dominate cotton wool/buds/pads since they have good brand awareness, a high quality image and a strong distribution network to support them. Private label cotton wool/buds/pads are expected to continue to have low, steady growth rates.

Unit prices are expected to drop over the forecast period. The lack of consumer loyalty to generic cotton wool/buds/pads will remain a barrier to price increases. The value share of innovative premium cotton wool/buds/pads will remain too small to increase average unit prices in the forecast period.