Cosmetics SME to spearhead RI market ahead of AEC

JAKARTA. Small and medium scale enterprises (SME) in the cosmetics industry are expected to contribute significantly to Indonesia’s economy in the upcoming ASEAN Economic Community (AEC), says president of the ASEAN Cosmetic Association (ACA), Nuning S Barwa.

“We have seen the growth of Thailand’s small and medium enterprises. We expect to compete with our own uniqueness. We have to equip our small and medium enterprises to face the ASEAN market,” she said during the ASEAN Cosmetic Leaders Forum in Jakarta on Tuesday.

Head of the Food and Drug Monitoring Agency (BPOM) Roy Sparingga said small and medium enterprises (SME) had big potential, contributing up to 58 percent of the country's GDP.

“The SME contribution for GDP is high, but the export level is still low. We only perform well nationally,” he said.

He urged people to alter their perception of Indonesian SMEs, which he said suffered from misconceptions about product quality. “We have to push them. The country needs to be selective in supporting the SMEs, but we need to boost growth,” he said.

The BPOM also promised to supervise the health aspects of cosmetic products, as competitiveness in the ASEAN market relied upon safety, efficacy, and quality.

"Cosmetics products are low risk and they have short life-cycles, as the trends keep changing. But they have to fulfill administration requirements,” he said.

Limitations to development in the sector include the lack of facilities, low human-resource quality, and administration compliance.

ASEAN countries’ combined GDP is said to have reached US$3 trillion, with 600 million consumers, making it the third-biggest economy in Asia after China and Japan.