Objective: This study investigates how macroeconomic and environmental factors shape the demand for Chinese cosmetic exports to ASEAN countries, with a focus on three key markets: Indonesia, Thailand, and Malaysia. It addresses the lack of systematic analysis on the interaction between economic cycles, environmental quality, and category-specific consumption patterns in the cosmetics sector. Methods: An econometric strategy framework was developed using monthly data from January 2023 to May 2025. The study examines both total cosmetic imports and disaggregated demand for lip & eye cosmetics to capture consumer responsiveness at a finer granularity. key macroeconomic and environmental indicators are incorporated to test theoretical predictions from consumption, health, and trade economics. Results: (1) Indonesia: Demand for lip & eye cosmetics exhibits a counter-cyclical pattern consistent with the “lipstick effect“, where consumers shift towards affordable luxuries during downturns. Air quality deterioration significantly amplifies demand shifts, validating the Environmental Kuznets Curve and health-conscious consumption behaviors. (2) Thailand: Cosmetic import demand is pro-cyclical and closely follows stock market trends, supporting Keynesian consumption theory and the wealth effect under the permanent income hypothesis. (3) Malaysia: The cosmetic market shows structural stability, with moderate sensitivity to exchange rate fluctuations, aligning with purchasing power parity and price elasticity theory. Lip & eye cosmetic demand is relatively inelastic, suggesting entrenched consumer preferences. Pollution-related demand shifts support the health capital theory. (4) Comparative Analysis: Lip & eye cosmetics demonstrate significantly faster adjustment speeds compared to the overall cosmetic category, supporting category management theories linking product agility with market responsiveness. Conclusion: This study introduces a macro-micro integrated export strategy framework that captures heterogeneity across ASEAN markets. It offers three actionable recommendations: (1) develop macroeconomically aligned, country-specific promotional calendars; (2) prioritize high-agility product categories such as lip & eye cosmetics to enhance responsiveness; (3) build adaptive, regionally flexible supply chains to buffer demand shocks. These insights contribute both to theoretical discourse and to data-driven operational strategies for China’s cosmetic exports. Future research should extend this framework to precision decision models for dynamic international market entry. By bridging macroeconomic modeling with micro-level consumer behavior, the study advances interdisciplinary understanding of export dynamics in volatile markets. The findings also provide policymakers and industry stakeholders with empirical evidence to formulate targeted interventions that balance economic growth with sustainable trade practices.
References
[1] Aganta, N. C. T., Padmalia, M. P. M., Teofilus, T. (2025) The influence of promotions, discounts, and brand trust on impulsive purchases of Fitbar Makassar. International Journal of Humanities Education and Social Sciences (IJHESS), 4(6).
[2] Pandey, N. B. B. (2025) Exploring impulse buying patterns among millennials in the fashion retail sector: an analysis. Journal of Informatics Education and Research, 5(2).
[3] Fleming, J. M. (1962) Domestic financial policies under fixed and under floating exchange rates. Staff Papers, 9(3), 369-380.
[4] Mundell, R. A. (1963) Capital mobility and stabilization policy under fixed and flexible exchange rates. The Canadian Journal of Economics and Political Science, 29(4), 475-485.
[5] Bahmani-Oskooee, M., Nouira, R. (2021) U.S.-German commodity trade and the J-curve: New evidence from asymmetry analysis. Economic Systems, 45(2), 100779.
[6] Mesagan, E. P., Alimi, O. Y., Vo, X. V. (2022) The asymmetric effects of exchange rate on trade balance and output growth. The Journal of Economic Asymmetries, 26, e00272.
[7] Pertiwi, R., Syamad, N. (2024) Is there J-Curve phenomenon and asymmetric effects of exchange rate on trade balance in East Java? East Java Economic Journal, 8(1), 99-114.
[8] Dumludag, D. (2015) Consumption and life satisfaction at different levels of economic development. International Review of Economics, 62(2), 163-182.
[9] Choung, Y., Pak, T., Chatterjee, S. (2020) Consumption and life satisfaction: The Korean evidence. International Journal of Consumer Studies, 45(5), 1007-1019.
[10] Cortina-Borja, M. (2012) Handbook of Parametric and Nonparametric Statistical Procedures, 5th edn. Journal of the Royal Statistical Society Series a (Statistics in Society), 175(3), 829.
[11] Hatemi-J, A. (2003) Multivariate tests for autocorrelation in the stable and unstable VAR models. Economic Modelling, 21(4), 661-683.
[12] Asteriou, D., Hall, S. G. (2016) Vector Autoregressive (VAR) models and causality tests. In Applied Econometrics, 333-346.
Share and Cite
He, C., Rasiah, R., Chng, S. F. (2025) China’s cosmetics industry trade strategy in ASEAN: Macro drivers and market dynamics. Hong Kong Financial Bulletin, 1(2), 38–49.