Japanese cosmetics surges in export number
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Japan’s cosmetics exports are on track to surpass 500 billion yen ($4.53 billion) for the first time in 2018, marking a sixth consecutive record year, thanks to Asian tourists who continue to buy these products after returning home. Exports in the January-November period grew 44% on the year to 482.8 billion yen, according to a tally of 16 types of cosmetics compiled from trade data by Nikkei. Demand for gifts tends to boost exports in December, and with major cosmetics makers’ plants running at high capacities, the full-year figure is expected to reach around 520 billion yen.
Mainland China was the top buyer from January through November, accounting for 34.9% of exports by value, followed by Hong Kong at 25.9%, South Korea at 10.3%, Taiwan at 7.3% and Singapore at 7.3%. Asia accounted for 90% of the total.
Japan’s cosmetics exports have tripled in the last four years along with a rise in visitors to Japan. Exports exceeded imports for the first time in 2016 as inbound tourism creates new customers for high-quality Japanese goods who continue to buy them online or in stores upon returning home.
Cosmetics exports are likely to keep climbing in 2019. China will implement in January its first e-commerce law, which will require domestic online platforms to register with the government. With the crackdown on illegal marketing, direct exports of Japanese cosmetics are expected to increase as smaller Chinese retailers that sell goods procured directly from shops in Japan decline.
“Shiseido plans to begin in 2019 officially selling new products in China from its namesake mainstay brand, which launched worldwide this fall.”
Top cosmetics makers are also actively expanding their sales. Shiseido plans to begin in 2019 officially selling new products in China from its namesake mainstay brand, which launched worldwide this fall. The company will open a facility for collaboration with Alibaba Group in Hangzhou from January and jointly develop products with the Chinese e-commerce empire.
Kao plans to double the number of stores in China carrying its popular Freeplus skin care brand to more than 2,000 by 2020. It will also cultivate sales for its makeup brand Kate, which launched a Chinese marketing campaign in December. Kose is accelerating the online sales campaign it began in China this autumn for its luxury brand Decorte.
Japanese cosmetics makers are increasing the capacity of domestic plants to meet the surging export demand. Shiseido plans to bring a new domestic factory online in 2019 for the first time in 36 years, in Tochigi Prefecture, to produce more items like skin care products. It will also begin operations at a new facility in Osaka Prefecture in 2020.
Kao will roughly double production for its Freeplus brand from 2017 levels, too, by investing in its main factory in Kanagawa Prefecture. Boosting domestic production is likely to encourage exports further by increasing supplies of “made-in-Japan” cosmetics.
Questions & Answers
Q.What is driving the surge in Japanese cosmetics exports?
What is driving the surge in Japanese cosmetics exports?
Asian tourists who buy products while visiting Japan continue to purchase them after returning home. Inbound tourism has created new customers for high-quality Japanese goods, leading to increased demand.
Q.Which countries are the primary buyers of Japanese cosmetics?
Which countries are the primary buyers of Japanese cosmetics?
Mainland China is the top buyer, accounting for 34.9% of exports, followed by Hong Kong at 25.9%, South Korea at 10.3%, Taiwan at 7.3%, and Singapore at 7.3%. Asia as a whole accounts for 90% of total exports.
Q.How will a new e-commerce law in China affect Japanese cosmetics exports?
How will a new e-commerce law in China affect Japanese cosmetics exports?
China's first e-commerce law, requiring online platforms to register, is expected to increase direct exports of Japanese cosmetics. This is because smaller Chinese retailers who sell illegally procured goods may decline.
Q.What are major cosmetics makers doing to meet the growing demand?
What are major cosmetics makers doing to meet the growing demand?
Companies like Shiseido, Kao, and Kose are expanding sales efforts in China and increasing production capacity. Shiseido is opening new factories, while Kao is doubling stores for its Freeplus brand and investing in production.
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