Japan cosmetics market: an overview

There are approximately 1,200 cosmetics companies in Japan, the majority of which are small to medium-sized businesses. According to a survey by Nikkei Newspapers, the shipment by three major companies has accounted for 50% of the total domestic shipment in Japan, with Shiseido accounting for 23.6%, Kanebo accounting for 16.9%, and Kose accounting for 10.1%. Although the percentages have decreased over recent years, they are still very strong. According to the Chemical Industry Statistics of the Ministry of Economy, Trade and Industry, the shipment of cosmetics in 2008 was ¥1.5071 trillion, showing a decrease of 0.4% from the value in the previous year, making it an almost stable market for 12 consecutive years. Although the consumption of cosmetics was predicted to fall due to Riemann’s shock in September 2008, the market was good in the latter half of the year as a whole. The total shipment of hair care cosmetics was ¥414.6 billion, reflecting a 1% decrease from the previous year. The shipment of shampoos or conditioners suffered this decrease most probably because manufacturers had finished releasing high-price products and the sales of refills increased. The total shipment of skin care products was ¥660 billion, showing 2% growth because new brands were marketed successively. The shipment of lotion was ¥164.2 billion, and that of essence was ¥130.9 billion showing a one-order increase from that in the previous year. Face packs marked a 12% increase, reflecting shifts in the life style preference of the Japanese towards staying indoors. The total shipment of colour cosmetics was ¥355.9 billion (3% decrease), with cheek rouge performing particularly poorly. Lipsticks and nail care products (including nail-enamel remover) fell except in April and August, respectively, revealing clear shifts toward low-price products. An active increase was observed in perfumes and fragrance products, such as “Chloe” of Coty, “Rosarium” of Shiseido and “Happy Birthday” of Kose. Also, aspirational brands such as L’Occitane have rallied the market. I will do my best to predict how the Japanese cosmetics market will change. There was a time when consumers bought creams as expensive as ¥100,000 as a present for themselves. However, today’s climate has made this very uncommon. Even middle-price products cheaper than five thousand yen do not sell as they used to. There will be an increasing number of companies from other industries, such as Fujifilm, provoking still keener competition by joining the marketplace. The president of a major cosmetics company talked to stockholders recently and predicted: “Our company may not grow up until 2010”. The severe economic conditions will still continue. However, I am not pessimistic. I heard a story of “Gordian Knot” from Dr Ikeda, who I have a great deal of respect for. The story goes that when Gordius succeeded to the throne in 333 BC, he said that a person who could untie the knot that had grown tight would be the next emperor. Alexander cut the knot with a sword and became the next emperor in accordance with those words. We are possibly in a “Gordian Knot” or a deadlocked state, facing difficult problems and an entangled, seemingly unmanageable position. However, the Japanese have overcome such difficult states with wisdom and courage and made economic progresses. Like seasons in Japan, after winter, spring comes.