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Unlocking Southeast Asia with a Sephora-First Strategy

Published December 3, 2023
Published December 3, 2023

There has been a lot of discussion about the opportunity for beauty in Southeast Asia. Coming off the back of Cosmoprof Asia, I can reassure you that the excitement is real. But Southeast Asia is so often lumped together, and many brands enter with a “Sephora-first” mentality. While this can be a great strategy, it is not guaranteed. There are many ways to enter the market, and even with a Sephora-first approach, there are certain key considerations that need to be reviewed and acted upon.

Beauty Opportunity

There is much excitement around the opportunity for beauty in Southeast Asia and India as new frontiers offering fresh opportunities for brands. Japan and Korea have matured, China is facing challenges. So many brands feel this is the moment to enter Southeast Asia, with lower costs and untapped consumer potential. Luxury beauty is projected to grow by a healthy +11% CAGR until 2031.

However, the complexity of these multiple markets can be a headache for brand executives overseas.

Status Quo

Many popular International brands have had a straightforward approach to Southeast Asia expansion over the years—Sephora. If brands are with Sephora in other markets globally, they may choose Sephora as their first entry point into Asia. This can be a great stepping stone, but it is important that is what it is seen as—and not as the only answer to international expansion in this part of the world.

There are many brands who do not fit with Sephora’s portfolio; this discussion is for another piece. But if you are in Sephora or considering Sephora for Southeast Asia expansion, then there are some key considerations here:

Understanding Sephora’s Strengths

Sephora is in many markets across Asia Pacific, but it might not be the right partner in all these markets, so it is important to do your research.

Singapore – 11 stores, with ION being one of the world’s best-performing stores 

Malaysia – 17 stores 

Thailand – 13 stores 

Hong Kong – 4 stores 

Indonesia – 17 stores under joint venture 

India – 26 stores – Just partnered with the Reliance Retail Group to run their stores

Australia – 25 stores

Philippines – Online since 2016 

Korea – 4 stores 

China – 330 stores 

Vietnam – Online opened in 2022 and closed in 2023 

Taiwan – Closed in May 2023 

Sephora is generally much stronger in brick-and-mortar vs online, with online representing around 30% of business across the region.

Winning within Sephora

Sephora will most likely have your brand in an exclusive partnership for a certain period of time, so what can you do to maximize your sales?

While Sephora is across many markets in Asia, it is not strong in all of these markets, and even where it is strong you need to build awareness locally for your brand to succeed. 

Supporting your brand locally is essential—don’t expect it to just fly off the shelves once it hits Sephora Southeast Asia. 

While you are unlikely to have teams on the ground, you should look at finding someone locally who can check on the brand—conduct training, talk to store BAs, check stock levels, and generally iron out issues on the ground.

Also think about investing in local market activation—attending Sephora press days but also working with some local influencers in key markets to give your brand a local boost.

Expand beyond Sephora

Crafting a comprehensive Southeast Asia beauty expansion strategy is essential. Relying solely on Sephora is not a robust long-term strategy. Southeast Asia is diverse, local retailers are established in certain markets, and new ones are coming to rival Sephora. Like Sociolla in Indonesia, Nykaa in India, and Eve and Boy in Thailand, all have significant market share in their respective markets. 

SEA's digital marketplaces like Lazada, Shopee, Tokopedia, Zalora, and TikTok Shops are also thriving and, depending on your positioning, will be an interesting channel to explore.

Brands are constantly asking which markets they should focus on in SEA, but this really depends on price positioning and product category. You need to do some groundwork looking at competitors and retail landscape as well as consumer preference to determine the right market in which to start.

Look at Southeast Asia as a Growth Engine for the Future

For many years, beauty brands have not focused on this region and certainly not invested in it. But now is the time to look more closely and build up a strategy for Southeast Asia. You may still start with Sephora, but make sure you lay the foundations to get it right.

Once you have played out your exclusivity, you can expand to other retailers in markets where it makes more sense while developing a robust online strategy.


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