DIGITAL TRANSFORMATION AND SUSTAINABILITY STRATEGIES IN THE INDONESIAN COSMETICS INDUSTRY: PORTER’S FIVE FORCES OF COMPETITIVE DYNAMICS AND GROWTH OPPORTUNITIES

Abstract

This article provides an overview of the analysis of the cosmetics and personal care industry in Indonesia. The cosmetics industry in Indonesia is growing rapidly in line with increasing public awareness of self-care, changes in lifestyle, and the advancement of digitalization. The presence of social media and e-commerce has also influenced consumer patterns, particularly among the younger generation, who constitute the primary market in this industry. The research method employs a qualitative descriptive approach using secondary data analysis sourced from industry reports, academic publications, and various references related to the development of the cosmetics industry in Indonesia. In analyzing the cosmetics industry, the Porter’s Five Forces model was applied, encompassing buyer power, supplier power, the threat of new entrants, the threat of substitute products, and the level of competition among firms. Additionally, macro-environmental analysis was employed to understand external factors influencing the industry. The results of the analysis indicate that this industry has a high level of attractiveness with significant market opportunities; however, it also faces intense competition, low consumer loyalty, and a reliance on imported raw materials. Therefore, companies need to prioritize innovation, digital strategies, and brand strengthening to maintain their competitiveness.