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This article will discuss the trends, regulations, and steps in starting an organic skincare business in Indonesia.
The Covid-19 pandemic has affected the use of makeup and skincare in Indonesia. Yet, a survey conducted by Jakpat proves that the difference in skincare usage is not as significant as makeup. The overall drop of makeup usage is -15% while skincare usage is only -8%.
A skincare routine is still part of the lifestyle for both females and males in Indonesia. Hence, the outlook for the skincare business in Indonesia will remain attractive. Especially in the niche of organic skincare.
The trends of organic skincare in Indonesia
Organic skincare has a production process that is friendly to the environment. It uses recyclable packaging, green chemicals, and responsible use of natural resources.
There is also the absence of petrochemical ingredients and GMOs. The safer ingredients make Indonesians now opt for organic skincare. It causes the trend of organic skincare in retail and online sales in Indonesia.
The rise of local organic skincare in Indonesia
Indonesians prefer to buy skincare products made in Asia, including Indonesia. 37.4% of Indonesians prefer local skincare products. It is emphasized by the data from ZAP Beauty Index 2020 below.
Besides checking if a skincare product is organic or not, Indonesians also check for the halal label on the product. As 87% of Indonesians are Muslims, halal certification is essential to the market.
Based on Indonesian law, all skincare products that circulate in Indonesia must be certified halal. It assures the quality and safety of the products for Muslims and people of other religions.
Regulations related to starting an organic skincare business in Indonesia
You must have a legal entity to be able to start an organic skincare business in Indonesia. Based on the law in Indonesia, organic skincare products can be defined as cosmetics.
Cosmetics are products intended to be used on the external parts of the human body or teeth and oral mucosa. Especially to clean, perfume, improve or maintain the appearance in good condition.
On that account, organic skincare businesses must follow the regulations on cosmetics. It includes following the ASEAN Cosmetic Directive. They must also register their products to The National Agency of Drug and Food Control (BPOM).
Criminal convictions for failing to follow regulations in Indonesia
Suppose you fail to follow the regulations on cosmetics. You can get imprisonment and a fine. If the cosmetic does not meet safety standards or give the benefit as intended, you will receive up to 10 years in prison and IDR 1.000.000.000 fine.
Besides, if you produce or distribute cosmetics without a distribution permit, you will receive imprisonment up to 15 years and up to IDR 1.500.000.000 fine. It is based on Article 196 & 197 of Law Number 30 Year 2009 about Health.
How to start an organic skincare business in Indonesia
Establish a legal entity in Indonesia
Firstly, you will need to establish a legal entity in Indonesia. The legal entity allows you to either manufacture or import and distribute products. It depends on which you register for your organic skincare business.
There are two options to have a legal entity for your organic skincare business.
Set up a foreign-owned company
PT PMA setup is suitable for foreigners wanting ownership of a company. It allows you to have 100% ownership of a cosmetics manufacturer or distribution company.
Use Emerhub as the product holder
Another good option is by assigning us as the product holder. Especially if you are not interested in setting up a company in Indonesia. And if you only want to sell organic skincare products instead of manufacturing.
Register your organic skincare products in Indonesia
After you have a legal entity, you can then register your organic skincare products. You must pay a non-refundable fee to register each SKU of products to BPOM.
Moreover, the organic skincare product registration must meet all the requirements. The requirements include the following:
- Company’s legal documents
- Warehouse
- Statement of Person in Charge
- A description of the composition and specifications
- Certificate Free Of Sales (CFS)
- Good Manufacturing Process (GMP)
Note that BPOM can either approve or deny the product registration. If BPOM denies the product registration, you will not be able to receive your money back. If approved, you will subsequently obtain the distribution permit in the form of a BPOM notification.
Start selling your organic skincare products in Indonesia
Soon after you receive the BPOM notification, your products can circulate in Indonesia. You can then start selling your organic skincare products immediately.
The BPOM notification is valid for three years and extendable. That is if you maintain compliance with the regulations in Indonesia.
Apply for halal certification in Indonesia
It is necessary for food, beverage, medicinal and cosmetic products to have halal certification. It is based on Indonesian Law Number 33 Year 2014.
Based on Indonesian Law Number 31 Year 2019, only products with prohibited materials such as gelatin are excused from the obligation. But, those products must be labeled as non-halal.
Read the detailed information on cosmetic product registration in Indonesia here. Or, contact Emerhub to start your organic skincare business in Indonesia right away. We can assist in establishing a legal entity and related permits so you can sell and distribute your products. Fill in the form below, and we will gladly discuss the details.
