KUALA LUMPUR, Malaysia, Sept. 26, 2012 /PRNewswire/ --The rising green consciousness in Asia Pacific is generating demand for natural products, and the personal care active ingredients market has been cashing in, especially with synthetics coming under scrutiny for its lack of sustainability. Customers' growing awareness and affinity for natural ingredients, higher affordability, and environment consciousness is turning them toward premium natural personal care products.

New analysis from Frost & Sullivan (http://www.chemicals.frost.com), Strategic Analysis of Asia-Pacific Personal Care Active Ingredients Market, finds that the market earned revenues of US$116.6 million in 2011 and estimates this to reach US$176.4 million in 2017.

"Technological innovations are giving market participants a competitive edge by enhancing the ingredients' functionality," said Frost & Sullivan Senior Research Analyst Dr.Nandhini Rajagopal. "Following the success of the new ingredients, manufacturers are replacing traditional materials with innovative ingredients; for instance, light emollients are replacing some silicon products in final formulations."

The cosmetics industry is riding a crest due to the higher spending power of the people in the region. As the Asia Pacific is expected to be economically strong for the next few years, the demand for cosmetics, and thereby, active ingredients, is likely to be high.

Meanwhile, changing lifestyles and poor food habits are also altering strategies in the personal care active ingredient market. Premature aging due to lifestyle habits has created a new target group of 27-40 year olds for personal care products.

Apart from these shifting patterns, the biggest challenge faced by the active ingredient suppliers in the Asia Pacific is the smuggling and counterfeiting of ingredients. They are also significantly pegged back by competition from low-priced Chinese products.

As these illegal products evade import duty and sales tax, their suppliers can afford to price them competitively and still gain huge margins, placing enormous pressure on legitimate suppliers.

Countries need to design strict regulations and enforce adherence to eliminate the threat from counterfeit and smuggled personal care products. Further, suppliers could also establish local manufacturing facilities to mitigate the effects of this challenge.

"Strategic relationships between manufacturers will also help synergise their strengths and overcome individual weaknesses," noted Rajagopal. "While vertical integration of industries can result in higher margins, horizontal integrations are expected to expand the product line."

Such alliances have been useful to the majors operating in this segment, and could be replicated by other participants.

Read more:
Frost & Sullivan: Natural Ingredients' Success Alter Business Plans in the Personal Care Active Ingredients Market