Nivea envisions hammerlock on Asean markets

Beiersdorf (Thailand) Co, the maker of Nivea and Eucerin skincare products, will spend 1.5 billion baht this year to expand its business in Thailand, making it the fifth largest among its global network in five years.

Suwannee Sritonyachote, the managing director of Beiersdorf Southeast Asia, said business in the region was robust last year.

Sales grew by 20% on average, beating the 15% projection.

Sales in Vietnam increased by 30% in 2012 compared with 15% for the industry in that country, while sales in Malaysia grew by 15%, triple the industry for that market.

The firm's sales in Thailand have expanded at a double-digit rate for several years.

"Asia is our focus, and we expect to double the industry's growth in each Asean country this year," said Ms Suwannee.

Nivea products were Thai market leaders in all six of Nivea's skincare categories last year _ body, face, deodorant, men's products, lips and sun care.

Nivea's sales growth in Thailand doubled that of the industry over the past two years thanks to the introduction of new products.

With Thailand's middle class enjoying continuous expansion over past few years, Beiersdorf sees an opportunity to keep sales at double the industry's rate over the next five years.

The expectation is Nivea sales in Thailand will gradually climb to be among its top-five largest markets by 2018, besting several European countries including Spain, the UK and Italy.

Ms Suwannee said Nivea is projected to become the market leader in Vietnam and Malaysia by 2015 and 2017, respectively.

The sales contribution of Nivea in Southeast Asia is projected to rise to 10% of global sales, up from 7% last year.

The company is conducting a feasibility study on the expansion of its production capacity. If approved, it is expected to invest 200-300 million baht in the scheme.

Another possibility is to add more premium face products to fulfil Thai customer demand.

Retail sales of Nivea skincare products in Thailand reached almost 10 billion baht last year.

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Writer: Pitsinee Jitpleecheep
Position: Business Reporter