From Singapore lab to No. 1 US seller: P&G’s Olay serum a breakout success for Republic’s innovation push

After Procter & Gamble (P&G) launched the Olay Super Serum in the United States in 2023, the product shot to pole position among serums there. A bottle of this, combining five benefits of serums into one potion, was being sold every minute.

It was flying off the shelves, but what was less well-known about it was that it was a product of P&G’s Singapore Innovation Centre (SgIC) in Biopolis, Singapore’s research and development (R&D) hub for biomedical science.

The SgIC is the consumer goods giant’s largest beauty innovation hub in Asia. The 32,000-square-metre facility handles consumer understanding, formulation, advanced analytical capabilities, data science and modelling, along with state-of-the-art packaging design. 

The centre employs around 500 people, including scientists involved in R&D and product development for the giant’s beauty brands, which include Pantene, Head & Shoulders, SK-II, and Olay.

The Olay Super Serum was just one success story to come out of the innovation centre, which marked its 10th anniversary last year.

Major companies in Singapore such as Visa, Siemens, and ABB also have their own innovation centres, as the Republic is pushing innovation to the forefront and building an ecosystem to support it. Companies ranging from multinational firms to startups are choosing Singapore to create, test, and export their innovative solutions to Asia and beyond.
 

At the P&G centre, a partnership with the A*STAR Skin Research Laboratory (A*SRL), led to the identification of the component niacinamide, a form of vitamin B. This is what slows the loss of skin stem cells and, therefore, the ageing of the skin.

This success was to pave the way for P&G to develop a premium anti-ageing line for the China market some years back.

Beauty innovation relies on cutting-edge research across a variety of disciplines including molecular and cellular biology, says Yuko Nakamura, vice president of R&D at the SgIC.

P&G marked the 10th anniversary of the centre with a S$20 million investment to renew its partnership with A*STAR for another five years, up to 2028. Under the partnership, P&G will undertake R&D, not just with the research agency, but also with Singapore universities and healthcare organisations.

Already, the P&G-A*STAR collaboration has produced Hapsense, a new patent-pending, wearable skin sensor which speeds up analysis of skincare cosmetic products by up to 10 times – and at far lower costs than those of existing skin-testing panels.

Nakamura, a chemist by training, notes that study participants in trials used to have to go to the centre to report on the result of the products they were testing. Now, they just send in the results from the comfort of their own homes.
 

Using AI to help in testing

Study participants – and there could be up to 2,000 of them taking part in test panels each year – do go to the lab every few weeks; there, innovative and precise instruments measure the changes in their skin from their use of a product.

The reality, though, is that consumers experience skin fluctuations over the course of the day, and “this is a common skin concern which would be impractical to measure in a lab”, says Nakamura.

In response to this, a team of data and measurement scientists at the innovation centre developed an AI-powered platform called BeautyHub to capture the appearance of the subjects’ skin anytime and from anywhere.

Nakamura says: “This AI platform was trained using the decades of data obtained with our instruments. With BeautyHub, several types of high-quality skin analysis can be conducted in the consumer’s natural environment. In other words, instead of bringing people to our lab, people can now bring our lab with them.”

The platform has produced reams of data, which is put through an in-house, AI-powered data-analytics platform. From that comes information on useful consumer behaviour patterns or skin changes.
 

Marketing and product design

P&G invests significant resources on developing consumer insights. It gathers customer feedback on the texture of the product, its scent, how it looks, and whether it comes in a plastic bottle or is more luxuriously packaged, among many things.

Nitin Darbari, the chief executive officer for P&G Malaysia, Singapore, and Vietnam, as well as regional head of skincare for Asia, the Middle East, and Africa, says: “There are nuances here and there that help the consumer decide whether to buy the product.”

But here’s the thing: Even if the customer does buy it – and that’s already a complicated-enough journey after the product is developed, packaged, and marketed – it’s not the end of the story.

Noting in jest that every woman has a graveyard of products used just once or twice and then cast aside, he says: “Even if the product is purchased, if it doesn’t feel right, the customer won’t use the product, and won’t buy it again.”

How can this be prevented? Darbari says this is why the game has to be about “superiority across product, packaging, brand communication, retail execution, and value”.
 

Female customers in Asia prefer serums to creams

P&G’s beauty care segment is a US$15 billion (S$20.3 billion) business. “The challenge is that there are different consumer groups within Asia, with countries ranging from China to Australia, and covering a population of some five billion people,” he notes.

But what’s common among them is that they are affluent, more discriminating, and the beauty market is growing very quickly.

Due to the humid and hot weather, women prefer serums for their lighter texture to creams. P&G reads this preference as a sign that demand in the region is on the premium end of the spectrum, the so-called “masstige” and “prestige” offerings.

Darbari also notes that while some customers would still buy a S$5 product, they may mix that with a S$100 product.

And even as they go online and shop because of what beauty influencers say, some still go to a physical department store.
 

The bottom line is that there is no one-channel-fits-all strategy. Darbari says: “Channels keep evolving. Department stores still are where consumers go and experiment with the brand, and e-commerce will be where they buy the brands.

“The fact is, people judge you for what you look like, and understanding the emotion behind all that is the result of great marketing and great insights.”

He regularly visits places where P&G’s products are sold, to understand the customer experience from the time they step into the shop, browse the shelves and make the buying decision.

He and his team also regularly meet groups of customers to get their feedback; they even visit customers’ homes to see how the products are being used in a real-life setting.
 

Innovation

For its latest quarter ended 31 December, the P&G group posted a 2 per cent rise in net sales to US$21.9 billion.

A Morningstar report said that, “Even in the face of macro, geopolitical and competitive headwinds, P&G continues to invest in consumer-valued innovation and marketing to ensure its products win at the shelf for retailers and consumers.”
 

Source: The Business Times © SPH Media Limited. Permission required for reproduction.