OEM skincare contract orders surge 15% in H1 2024
Malaysia’s OEM skincare manufacturers recorded a 15% jump in contract orders during the first half of 2024 as brands raced to launch halal-certified, waterless and skin-barrier products.
Source: Eng Kah Corporation Berhad · August 1, 2026 at 10:54 PM · AI-assisted report
Single-source
KUALA LUMPUR, 2 AUGUST 2026 —
Malaysia’s OEM skincare manufacturers recorded a 15% jump in contract orders during the first half of 2024 as brands raced to launch halal-certified, waterless and skin-barrier products.
Market Impact
Eng Kah Corporation Bhd, one of the country’s largest halal-compliant contract producers, said demand for plant-based serums, oil-based moisturisers and gender-neutral cleansers had outpaced forecasts. The company’s managing director, Datuk Seri Eng Hock Eng, attributed the growth to stricter ingredient transparency rules and a 22% rise in halal skincare enquiries since the start of the year.
OEMs, which design, formulate and package products for brand owners, now account for an estimated 28% of Malaysia’s RM12.4 billion cosmetics market, up from 22% in 2021, according to industry filings. The shift follows new guidelines from the Malaysian Cosmetic Association that require ingredient disclosures on all mass-market skincare sold domestically.
Consumer priorities have reshaped the product mix. Clean-beauty certifications such as Ecocert and USDA Organic are now required by 45% of new brand launches tracked by Eng Kah, compared with 31% in 2023. Halal compliance, once limited to lipsticks and creams, has spread to cleansers and toners, with halal-certified lines now representing 18% of the company’s production volume versus 12% a year ago.
Water scarcity is driving the fastest technical change. Formulations that replace water with botanical oils and humectants now make up 34% of Eng Kah’s new projects, up from 19% in 2023. The move cuts production costs by up to 8% and extends shelf life to 24 months, the company said.
Inclusivity is widening the addressable market. OEMs report a 38% increase in requests for high-pigment foundations, niacinamide serums tailored to deeper skin tones and barrier-repair creams that target tropical redness. Gender-neutral lines—previously a niche—now account for 11% of Eng Kah’s contract manufacturing pipeline.
Smaller brands are the main engine of growth. Alluskin, Clef Skincare and Daughters of Malaya, none of which operated five years ago, collectively place RM350 million in annual orders with contract manufacturers, according to industry estimates. Their reliance on OEMs allows them to bypass the RM5 million to RM10 million capital cost of building dedicated production lines, said Datuk Seri Eng.
Eng Kah forecasts full-year contract volumes to rise another 12% in 2024, driven by export orders to Indonesia and the Philippines where halal and waterless trends are gaining ground. The company’s order book for the second half already exceeds RM210 million, it said.