Self-care products represented over 91% of third quarter sales in 2023.
PT Mustika Ratu Tbk, a company operating in the beauty and health industry from Indonesia, sees significant opportunities in the demand for self-care and natural ingredients cosmetic products.
The company’s belief is supported by data from Grand View Research, which cites the value of the global cosmetic market at $262.21 billion in 2022 and estimates its combined annual growth rate (CAGR) at 4.2% from 2023 to 2030.
According to this research, consumer interest continues to rise in natural or sustainable beauty products. This is complemented by more and more information about cosmetics made from natural ingredients — an awareness that continues to drive market expansion for products that are so-called “vegan friendly and cruelty free.”
“Since its establishment in 1975, PT Mustika Ratu Tbk has consistently used natural ingredients sourced from Indonesia’s environment, in line with the company’s policy of conducting sustainable business,” Jodi Andrea Suryokusumo, Director of Finance, Human Resources, and Corporate Affairs at Mustika Ratu, told Asian Business Review.
Strive to innovate
Jodi is confident that his company consistently innovates in both formulation updates and product aesthetics, aligning them with current market demands. For instance, the latest Mustika Ratu Hair Care series in 2024 integrates natural ingredients with cutting-edge technology.
That is showcased in their newest Hair Tonic, which combines natural extracts of quinine (kina) and false daisy (urang aring) with piroctone olamine, effectively combating dandruff-induced itching.
But the innovation does not stop there, as the product comes in a new user-friendly packaging that features a pump.
That displays added value for Mustika Ratu consumers, apart from the fact that the company ensures all products deliver optimal results, said Jodi.
“We firmly believe that a combination of clear information on formulations, new packaging designs, and relentless innovation constitutes an effective strategy to strengthen our product superiority in the market,” he said.
Sales strategy
Beyond product innovation, Mustika Ratu intends to implement additional strategies to enhance competitiveness in the ever-evolving beauty and health product sector.
These strategies encompass optimising distribution networks in the short term, comprehensive digitalisation platform implementation, and long-term digital loyalty system development.
These are all aimed at fortifying its business foundation and propel sustainable growth in the future. “We are optimistic that these strategies will provide added value to stakeholders, including shareholders, employees, distribution partners, customers, and other business associates,” Jodi said.
And the company is not only focusing on online sales such as in e-commerce, but also on ensuring the availability and visibility of products on store shelves. At present, Mustika Ratu products are distributed in various stores including minimarket, supermarket, and beauty product retailers throughout Indonesia.
The business development team continues to work with stores through the Join Business Plan (JBP) process to make sure that high-demand products never run out on shelves and strategic locations within the store.
“Through this process, we can plan together with the store to improve the marketing and sales of products. The implementation of this cooperation plan is actively and regularly monitored by the Mustika Ratu team in various regions,” said Jodi.
Distribution challenges
Indonesia’s archipelagic geography presents unique distribution challenges for Mustika Ratu, particularly regarding logistical costs and expenses across various sales channels.
In response, the company endeavors to optimise expenditure through mutually beneficial partnerships to yield win-win solutions. One such collaboration is with the Yayasan Puteri Indonesia, where Mustika Ratu has been a longstanding partner, imparting knowledge to pageant finalists. Every Puteri Indonesia finalist indirectly becomes a brand ambassador for Mustika Ratu products.
“In this situation, Mustika Ratu can alleviate marketing costs while maintaining competitiveness in a competitive market,” Chief of Financial Officer said.
With various strategies in place, including new product innovation, product rejuvenation, maximising exports and sales channel expansion in B2B and e-commerce to appeal to the shopping behaviour of younger consumers, Mustika Ratu targets double-digit revenue growth this year.
Based on its financial report, the company recorded a profit of IDR222.08 billion ($14.07 million) in the third quarter of 2023, up 1.9% compared with the same period in the previous year at IDR217.93 billion ($13.81 million).
Sales of self-care products contributed the largest portion, totaling IDR202.79 billion ($12.85 million), or 91.31% of net sales in the third quarter of 2023. This was followed by sales of, cosmetics, then by traditional herbal medicine, and then health products.
