Paragon Technology and Innovation (PTI): Wardah's Intention to Become International Player in Cosmetics & Skincare Industry

In recent years, the Indonesian cosmetic market has continued to increase. this increase comes from the middle class population in Indonesia. 

This affects their shopping behavior which has been recognized as one of the main drivers of the growth of the cosmetics market. 115 Million of the 267 Million people who make up almost half of the total population in Indonesia today are the prospective middle class. 

It can be said that Indonesia is the fastest growing beauty market among other Asian countries in terms of compound annual growth rate (Euromonitor International, 2019). In the next 10 to 15 years, it is undeniable that Indonesia is expected to be among the top five largest cosmetic markets in the world (EIBN, 2019).

The large cosmetic market is dominated by hair products by 35.8%; skin care by 31.7%; makeup products by 10.5%; Fragrance 7.2%; cleaning products 14.8% and CAGR (Compound Annual Growth Rate) for mass beauty and personal care of 13.1% in the period 2012-2017. 

CAGR of mass beauty is predicted to increase by 12% in the period 2019-2023 (Euromonitor International, 2018). These conditions make the industry's attractiveness even greater, giving birth to many new cosmetic brands and very big competition in the industry.

Local and international brands, such as Unilever, P&G, L'Oreal, Mandom, and Wardah, still dominate beauty and personal care products in the international market. Even so, Oriflame, Revlon, and L'Oreal are the largest shareholders in the cosmetics sector, it does not mean that local brands can be said or not developed, because local brands such as Wardah are predicted to grow rapidly in the cosmetics sector (Euromonitor International, 2018). This situation is also supported by the demand for halal products including cosmetics which continues to increase with the ratio of the Indonesian population being Muslim as much as 87% (EIBN, 2019).

Wardah is the first halal cosmetic brand in Indonesia which was founded by Nurhayati Subakat in 1995, which made this home industry develop into a national scale producer. Wardah with Make Over, Emina, Putri, and Innovative Salon are beauty product brands at PT. Technology and Innovation Paragon. Wardah's growth is very consistent, exceeding the Indonesian cosmetic market. Data proves Wardah experienced a growth of 32%, while the industry grew 18% in 2018 and at its highest point, grew more than double the industry growth rate. 

Wardah's brand share is the fourth largest among national and international brands as well as one of the most popular cosmetic brands in Indonesia. Wardah has developed its business into four categories, namely makeup, skin care, hair care, and body care and has more than 400 product lines. Wardah has succeeded in producing 135 million units of beauty products per year only by operating one factory and employing 100,000 employees. Wardah conquered the Indonesian and Malaysian cosmetic markets which are Wardah's distribution centers today by echoing the values, namely Pure, Safe, Innovation, and Love through inclusive marketing with the tagline 'feel the beauty'. This shows that beauty is universal and can come from the heart.