The rise of ‘Made in Bangladesh’ cosmetics

Today, almost all essential cosmetic products are produced locally in Bangladesh. Photo: Mehedi Hasan

The cosmetics industry in Bangladesh has seen remarkable growth over the past decade. Once dependent on imported goods, the market is now shifting towards locally produced items that cater to a diverse range of consumers. 

From skincare and haircare to personal care products, the expanding industry is responding to the demands of the middle and lower-middle classes, providing more affordable alternatives to foreign brands. Yet, despite this growth, challenges remain, particularly concerning product safety and regulatory standards.

Cosmetics, commonly referred to as makeup, are substances used to enhance the appearance of the human body. These products fall into five main categories: skincare, haircare, makeup, fragrance, and personal care products. Another segment is known as colour cosmetics, with toiletries and hygiene products also forming part of the broader cosmetics market.

In the past, when people travelled abroad, they were often asked to purchase toiletries such as soaps, shampoos, and creams due to the limited local supply. However, the Bangladeshi market has evolved significantly over the last decade. Local manufacturers now offer a wide range of lower-cost toiletries and perfumes, primarily targeting middle- and low-income consumers.

A market for aesthetic and health products has emerged, with women often favouring branded goods. Local brands are increasingly popular among middle-class consumers, partly due to improvements in production processes and raw materials. However, most of the chemicals used in manufacturing cosmetics and toiletries—up to 90%—are still imported, largely from Europe and Asia.

Local manufacturers are steadily replacing imported goods through innovation and research, developing new products that meet consumer needs. 

According to research organisations LightCastle Partners and Allied Market Research, an estimated $1.23 billion worth of skincare and personal care products were sold in Bangladesh in 2020, and the amount is expected to hit $2.12 billion by 2027.

Import of personal care items dropped by nearly 50% until February 2023, after the government imposed up to 20% regulatory duty (RD) on the items on 24 May 2022.

According to the National Board of Revenue (NBR) data, the country imported 11,529.45 tonnes of personal care items worth Tk937 crore from May 2022 to February 2023, which was Tk1423 crore in the corresponding period of the previous year. 

Total domestic market size of consumer products in Bangladesh is approximately Tk50000 crore. Toiletries and cosmetic products contribute Tk25000 crore, whereas food and beverage items contribute the rest. 

According to research organisations LightCastle Partners and Allied Market Research, an estimated $1.23 billion worth of skincare and personal care products were sold in Bangladesh in 2020, and the amount is expected to hit $2.12 billion by 2027.

While the local cosmetics industry is expanding, it faces several challenges. One key issue is the sourcing of ingredients, which are often a mix of chemical substances and natural herbs. The safety of these products can be compromised due to microbial contamination, particularly in bulk ingredients. Insufficient quality control during manufacturing and storage can lead to skin conditions such as acne, eczema, and scabies.

Microbial contamination is a persistent concern, particularly in developing countries like Bangladesh, where environmental factors such as poor sanitation and overcrowding contribute to the spread of skin diseases. To ensure the microbiological safety of cosmetics, manufacturers must adhere to strict guidelines, such as the Good Manufacturing Practices (GMP) standards outlined in the British, American and European Pharmacopoeia.

Regulation plays a critical role in maintaining the quality of cosmetics and personal care products. In 2023, the Bangladesh Parliament passed the Drugs and Cosmetics Act, aimed at regulating the manufacturing, import, and sale of these products. Under the new law, cosmetics producers must obtain licenses from both the Bangladesh Standards and Testing Institution (BSTI) and the Directorate General of Drug Administration (DGDA).

This legislation aims to ensure that cosmetics meet both national and international quality standards. As local production increases, it becomes essential for manufacturers to prioritise hygiene and safety throughout the production process. Global raw material suppliers, such as THOR Specialties Co. Ltd., UK, are offering auditing services to help Bangladeshi companies meet international hygiene standards.

The production, distribution, and storage of cosmetic items come with several challenges. Cosmetics are composed of chemical substances or, in some cases, natural herb preparations. Beyond concerns regarding chemical reactivity and potential side effects, there is the crucial issue of microbiological quality. 

Although cosmetics are typically considered healthcare products, they can be susceptible to microbial contamination. The level of contamination often hinges on the use of microorganism-infected bulk ingredients during manufacturing and processing. Insufficient in-process quality checks, improper storage conditions, and inadequate quality assurance during distribution can further contribute to contamination. 

Such contamination may lead to various skin conditions, including scabies, acne, eczema, dyschromia, and other diseases.

Cosmetic products often contain substrates that may inadvertently promote the growth of pathogenic bacteria and fungi. As such, these products must be free of pathogens to minimise the risk of skin and mucous membrane impairment. 

Skin diseases are more prevalent in developing countries due to unsanitary environments, dense populations that facilitate the spread of contagious diseases, limited awareness of hygiene practices, poor sanitation, and the use of contaminated water during processing.

A study titled "Safe Usage of Cosmetics in Bangladesh: A Quality Perspective Based on Microbiological Attributes," by Rashed Noor, Nagma Zerin, Kamal Kanta Das, and Luthfun Naher Nitu, highlighted the critical need for strict adherence to microbiological standards in cosmetic production. 

This includes ensuring microbiological quality from raw materials to the manufacturing water, in line with Good Manufacturing Practices (GMP). A thorough understanding of the microbiological requirements for raw materials and final products is essential for ensuring products meet the microbial limits recommended by authorities such as the British Pharmacopoeia (BP), United States Pharmacopoeia (USP), and European Pharmacopoeia (EP).

Microbial contamination can occur through various mechanisms in the production stream. Common contaminants include Gram-negative and Gram-positive bacteria, as well as opportunistic pathogens. 

These contaminants may adapt to product ingredients and survive. Sources of contamination range from low-quality raw materials, manufacturing equipment, and the processing environment to packaging materials and personnel handling the products.

Some global suppliers of raw materials, such as THOR Specialties Co. Ltd., UK, conduct audits on factory hygiene and provide regular recommendations to maintain high standards. The cosmetics industry also adheres to ISO 22716, which offers GMP guidelines specifically for the cosmetics sector. This standard covers personnel, technology, and administrative management practices that impact product quality.

Today, almost all essential personal care products—shampoo, conditioner, face wash, face scrub, cream, lotion, toothpaste, Vaseline, powder, shaving cream, and more—are produced locally in Bangladesh. 

For example, Unilever used to import Dove Shampoo before 2013, but it is now produced locally. Similarly, the company introduced Tresemme Shampoo, an international brand, in 2015, which is also now produced domestically. Pond's Bright Beauty moisturiser, previously imported, is also gradually being replaced by locally manufactured alternatives.

Local companies face ongoing challenges, particularly in securing funding, adopting new technologies, and marketing their products. 

However, brands like Square, Kohinoor, and ACI are increasingly adopting advanced manufacturing technologies and GMP standards, thereby gaining the trust of mainstream consumers. Over the last two decades, Bangladesh's cosmetics industry has grown significantly, contributing not only to public health safety but also to economic expansion.

Recent investments by major conglomerates like Remark HB, with overseas technical collaborations, have reshaped consumer perceptions, leading higher- and middle-class consumers to embrace "Made in Bangladesh" cosmetics and toiletries. Many of these products now serve as substitutes for imported goods.

The Walton-RFL industrial growth model has also revolutionised the outdated belief that locally produced goods are inferior and cheap. This has spurred the rise of several local brands and industries, driving import substitution and fostering an industrial revolution in Bangladesh.

Bangladesh is now both importing and exporting cosmetics, with the potential to become self-sufficient in production and poised to expand into global markets in the near future.

M S Siddiqui is a former non-government adviser, Bangladesh Competition Commission, Legal Economist, and CEO, Bangla Chemical. 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.