Cosmetics and toiletries to the Philippines

Trends and opportunities

The market

Philippines: one of the attractive retailer destinations in the region

The Philippines is considered as one of the key focus markets of global retail brands within the Asia Pacific region, evident in a number of major foreign brands setting up shop in the country. Despite the global backdrop of retail stores either shutting down or focusing on rationalising costs over expansion, the Philippine retail has remained strong, making the country an attractive destination for global brands (Source: Philippine Daily Inquirer, ‘PH retail scene remains upbeat’, 30 September 2017).

Underpinned by its solid macroeconomic fundamentals and the rising disposable income of its young population, the Philippines is also experiencing strong investment in infrastructure and construction, solid household consumption, as well as low inflation and interest rates which are all boosting economic growth. Beyond these indicators, the potential gains from the demographic dividend, combined with the large volume of mall space and competitive occupancy costs, remain its two distinct advantages, which should help the country become one of the attractive retailer destinations in the region (Source: Cushman & Wakefield, ‘How Global Brands are Shaping the Metro Manila Retailer Landscape 2017’).

With a median age of 23 years old and an average working age of 24, the Philippines has a young population and a growing number of young professionals in urban areas. Because of this, brands will continue to cater to a pool of more adventurous buyers willing to try new offerings, demanding more product benefits, and spending more to improve their looks. Thanks to social media and word of mouth, this demographic is keen to try foreign brands that are known to be effective or popular among peers.

e-Commerce in the Philippines

Two of the largest local conglomerates---the Ayala Group and SM Group---bought a 49 per cent stake in Zalora Philippines and a 34.5 per cent stake in the parent company of 2GO Group Inc, respectively, thus suggesting a positive outlook on the sector and tangent industries (Source: Philippine Daily Inquirer, ‘PH retail scene remains upbeat’, 30 September 2017).

The internet was not only utilised to promote brands and communicate with consumers in 2016. The prominence of online beauty and personal care retailers such as Sephora Philippines, Beauty MNL, GlamourBox, Beauty Bar Philippines and Zalora notably increased in 2016. This encouraged major players in the market to participate in the growing area of online retailing (Source: Euromonitor, Beauty and Personal Care in the Philippines, May 2017).

Beauty and Personal Care

Sales of beauty and personal care products grew from 4 per cent in 2014 to 6.3 per cent in 2017 (Source: Euromonitor, Beauty and Personal Care in the Philippines, May 2017). The growth of the skin care category is driven by a common mentality that it is an economical alternative to more expensive dermatological treatments, which dominate the market (especially among the affluent).

The Philippines is into what is called “expressive beauty”, where going out on the streets, one would feel that people want to express themselves. Having changed drastically in the last 20 years, the country has transformed its concept of beauty from basic to putting a premium on looking good and expressing one’s self. Western influences have played a major role into how Filipinos use beauty products (Source: The Philippine Star, ‘L’Oreal strengthens Phl foothold’, 30 October 2017).


One of retailers’ key priorities, the Beauty Category is seen to be “growing exponentially”. The sector grew by 5 per cent in 2016, with Skin Care, Hair Care and Bath and Shower leading the category. Sales of sets/kits have grown 17.4 per cent while colour cosmetics is at 11.5 per cent. With strong demand coming from a fast-increasing consumer base, colour cosmetics is expected to flourish, with a forecast growth of 9 per cent from 2016. Huge demand from the increasing consumer base, coupled with interesting developments and trends in the market, benefits the category. (Source: Euromonitor, Beauty and Personal Care in the Philippines, May 2017).

Trends in beauty products and treatments have shifted from anti-ageing to predominantly skincare and make-up. Consumers have become more educated, discriminating and health-conscious with beauty and skin care products that major global brands have ramped up product innovation – from formula and production to packaging – of face creams, serums, masks, make-up and treatments.

Filipinos look for natural, organic and hypoallergenic products. The “Made in Australia” label is recognised and equivalent to “Clean, Green and Safe” in the Philippines. Austrade has been implementing a sustained campaign to broaden awareness about Australian products (food and non-food), create visibility and promote this message.

Skin whitening remains among the most sought-after products. The most common and popular ingredients used for skin whitening products are glutathione and papaya (papaw) extracts. Because of this, brands will be able to differentiate themselves in the market by introducing other whitening agents.

Natural oils are becoming more popular for moisturising the skin and preventing skin ageing. Argan oil, though expensive, is top of mind in the market. Because of this, other types of oil with similar properties are in high demand.

Consumers look for products that simplify the beauty routine, such as BB and CC creams and 4-in-1 beauty products. Facial moisturisers with sun protection, as well as facial care products and facial make-up with sun protection are generally preferred for daily use. Sun care products are purchased typically when consumers go to the beach or for a swim.

Competitive Environment

Colour Cosmetics

Avon Cosmetics remain the biggest player in colour cosmetics despite a 3 per cent decline in value share from 2016. With a 23 per cent share, Avon was able to maintain a strong position in colour cosmetics and remain one of the most popular companies in the Philippines. The lead may also be attributed to an extended reach in online stores to attract young consumers and complement the declining number of sales representatives (Source: Euromonitor, Beauty and Personal Care in the Philippines, May 2017).

One of the best performers in colour cosmetics in 2016, L'Oréal Philippines increased its value share at 16 per cent, making it the third biggest player in the category. Its solid performance may attribute to heavy engagement of local ambassadors and strong presence in the online community, including social media and online stores such as Calyxta, Zalora and BeautyMNL (Source: Euromonitor, Beauty and Personal Care in the Philippines, May 2017).

Skin Care

Unilever Philippines remains the leading player in skin care with a 27 per cent value share in 2016. Its strong performance is due to the vast and extensive skin care brand portfolio addressing specific demands of Filipino consumers. The company is responsible for some of the biggest brands in the category, namely Pond’s with an 11 per cent value share, Eskinol at 9 per cent and Master at 3 per cent. Vaseline, Block & White and Dove are also key brands of the company.

Beiersdorf Philippines saw the strongest value increase in 2016 of 25 per cent through the brand, Nivea. The brand is also ramping up its offerings in other categories such as skin care for men.

Despite being a newcomer in the market, the entire H&M Beauty department is deemed to be another key player with its product offerings in hair care, skin care, nail care, makeup and makeup tools. Since September 2017, the beauty line has been available in seven of largest H&M branches in the country: SM Megamall, SM North EDSA, SM Mall of Asia, Festival Mall, Ayala Center Cebu, Robinsons Place Manila, and Greenbelt 4.

Other multinational brands present are L’Oréal, Proctor & Gamble, Unilever, Colgate-Palmolive and Johnson & Johnson. Some of the more visible imported brands in the market come from the United States (US), Europe and Japan.

Tariffs, regulations and customs

The implementation of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is helping to strengthen Australia’s commercial ties with the Philippines. In particular, the reduction or elimination of existing tariffs has resulted in substantial new markets for Australian companies.

See the AANZFTA Tariff Finder for more information on applicable tariffs.

The Philippines also shifted from export value to the transaction value system of import valuation, in compliance with the World Trade Organization Agreement on customs valuation. The transaction value system looks at the price agreed upon by the buyer and seller, including other payments made by the buyer for the goods as purchased.

The Philippines Bureau of Customs took over the function of monitoring shipments on 1 April 2000 with the lapse of the contract between the Philippine Government and Société Générale de Surveillance (SGS). SGS is the leading organisation in verification, testing, and certification in the world, and is recognised as the global benchmark for the highest standards of expertise, quality and integrity.

An electronic clearance system, Super Green Lane, has replaced the pre-shipment inspection service provided by SGS. The Super Green Lane is a fully-automated, ship-to-truck clearance system that accords advance processing for qualified shipments.


All cosmetics exported to the Philippines for retail sale should be registered with the Food and Drug Administration (FDA) Philippines. A Certificate of Goods Manufacturing Practice issued by a Government Health Agency and authenticated by the Territorial Philippine Consulate is also required. Cosmetic products that contain active or restricted ingredients are required to seek registration and undergo laboratory testing before being sold locally.

FDA evaluates applications for registration in terms of absence of non-permissible substances, compliance with specific standards and labeling requirements, and completion of documentary requirements.

Find out more details on product registration through links to the ASEAN Cosmetic Directive, and the Cosmetics Notification Application:

Marketing your products and services

Market Entry

The most effective way to enter the market is to work with local distributors or agents, who normally contribute not only to the brand building and marketing, but most importantly to product registration, importing and customer liaison. It is not common among Philippine retailers and institutional users to buy direct from overseas companies due to the lengthy paperwork associated with importing.

Importers and retailers will often seek exclusivity to secure brand/product uniqueness and avoid price competition, given the relatively small market size.

Other potential strategies for entering the Philippine cosmetics and toiletries industry include:

  • managing key customer accounts from Australia and finding a fulfilment company to warehouse and ship to customers
  • setting up a representative office in the Philippines
  • contract manufacturing and packing in Australia
  • working with an Australian consolidator to share distribution with other Australian companies with a synergistic product range
  • licensing and franchising

Brand Building and PR

Traditional advertising such as TV ads and print are key marketing tools as are online channels. Brands have been using social media and publicity in the form of magazine features heavily for promotions as these are considered more cost-effective alternatives to expensive above-the-line advertisements.

The Philippines has a huge social media population. Facebook and Instagram are very popular especially among millennials and young professionals. Facebook ads, beauty bloggers and Instagram posts are considered effective in spreading the word and generating word-of-mouth about a brand.

Celebrities and influencers, (i.e. beauty and fashion bloggers) are often engaged to promote cosmetics and skin care products. The Philippines has a strong celebrity culture and the aspirational crowd would normally end up buying brands used by the personalities they follow online.

People recognise the ‘Made in Australia’ label and associate it with safe and high quality products.

Pricing Structure

Specific to retailing, factors such as the retail price, margins and how the product is to be promoted should be considered.

Margins will depend on the unit value of the product, projected sales volumes and the product category. Build in your distributors’ and the end users’ margins when you are determining your product pricing.

The Philippines market remains price sensitive, but people from the middle income and up recognise value for money and, because of higher levels of income, are now more willing to spend more for a product they believe in.

Distribution Channels

The major retail distribution channels for cosmetics and skincare products include:

  • department stores that normally stock international, high-end and branded products such as Rustan’s and Robinson’s
  • personal care chain stores (combined with pharmacies) – such as Watson’s with 490 stores nationwide by end of 2016
  • supermarket chains for mass produced items and private labels, i.e. SM’s Bonus
  • brand and concept shops – offering experiential aspects to consumers, such as L'Occitane, L’Oreal, Kiehl’s, Benefits

Direct selling is a major channel for skin care and fragrance products. Avon, Sara Lee, and other local companies have independent sales representatives that have proven very effective since this scheme allows for much personalised service, deferred payments, and encourages multiple and repeat purchases.

Links and industry contacts

Cosmetics and toiletries-related 

Chamber of Cosmetics Industries of the Philippines 
Philippine Dermatological Society
Philippine Society for Cosmetic Science 

Government, business and trade resources for the Philippines

Board of Investments 
Bureau of Customs 
Bureau of Product Standards 
Chamber of Cosmetics in the Philippines 
Department of Health
Department of Trade and Industry
Export Marketing Bureau 
Food and Drug Administration 

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.