L’Oreal Indonesia, the Indonesian branch of the French personal care giant, has been in the country for 37 years, yet the current head of the firm feels now is one of the best times for the brand. “Southeast Asia is a hot spot in the global beauty care market. The market is buoyant, dynamic and exciting, and Indonesia is at the heart of it,” says Umesh Phadke, president director at PT L’Oréal Indonesia. While the economy has been recovering from a slowdown, the beauty care industry has seen steady growth.
Umesh, who took the job last year, was previously managing L’Oreal Thailand for just over five years—a business with a turnover of about $300 million a year, one of the largest in Asia for the brand. Thus the stakes were high for Umesh, as L’Oreal has decided Indonesia is a key market for the firm. In late 2012, L’Oreal opened its largest factory in the world, out of 43 around in the globe, in Indonesia. The factory is located in the Jababeka industrial estate outside of Jakarta, an investment of over €100 million.
The 66,000 sqm factory will serve as a production center for both the Indonesian domestic and international markets, with about 30% of its output for Indonesia, and the rest for international exports.
The domestic beauty market in Indonesia, according to Umesh, is worth over €3.5 billion, and is expected to significantly increase in the next few years. According to him, the company has successfully managed to double its business in the last five years in the country.
The personal care giant now has two operating units in the country: PT L’Oréal Indonesia, which handles marketing and distribution activities, and PT Yasulor Indonesia, which focuses on manufacturing operations. L’Oréal brands in Indonesia comprise of: L’Oréal Professionel; Kerastase Paris; Matrix; L’Oréal Paris; Maybelline New York; Garnier; Lancôme; Biotherm; Shu Uemura; Yves Saint Laurent; Kiehl’s; perfumery which includes Giorgio Armani, Ralph Lauren, and Diesel; and The Body Shop, which is distributed by a third party agent.
Umesh is reshaping the strategy to match the changing needs of consumers. He wants beauty care products to be made available to every consumer, irrespective of age, skin, or other factors. This shift is important, he says, because it will represent a transition from focusing on products, to more engagement with consumers through digital, advertising, communication, packaging and even retail.