Industry watch: Chinese cosmetics brands in Japan

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As the third largest cosmetics market in the world, Japan is full of business opportunities for Chinese cosmetics brands.

Often considered an ideal springboard for success in the global market and the third largest cosmetics market, Japan has a mature economy with the highest retail prices for cosmetics, making it an important destination market for exports. of Chinese cosmetic brands. Although the growth of the Japanese economy is weak, Japan can be a remarkable growth driver for Chinese cosmetics brands, given the size of its market.

The strategic decision of internationalization is not to be taken lightly: it is strewn with pitfalls

to overcome, which may stem from cultural misunderstandings, consumer misunderstanding, differences in market structure, hidden opportunities, etc. The main objective of this series is to cover these difficulties by providing Chinese cosmetics brands with a comprehensive analysis of the Japanese beauty market, highlighting obstacles and opportunities. To achieve this, this series will attempt to answer the following questions:

  • What is the current state of the Japanese cosmetics market?

  • What are the strengths and weaknesses of Chinese beauty brands in the

    Japanese market?

  • How to successfully enter the market?

Three types of Chinese cosmetic brands in the Japanese market

Through interviews and research, Equalocean summarized three kinds of Chinese cosmetic brands in Japan.

The first is the brand that naturally has the potential to be a hit in Japan, such as Florasis (Chinese: 花西子) and Girlcult. These two brands both belong to sweet and lovely styles, which are consistent with the typical Kawaii culture in Japan. Therefore, the popularity of brands in Japan and the acceptance of Japanese consumers are high.

The second type is the strong Chinese-style brand, and Florasis is a typical representative of it. Florasis is popular in the Japanese market due to the similarities of Chinese and Japanese cultures and the brand’s classic Chinese beauty features. Before Florasis, many products from Catkin (Chinese: 卡婷) and Zeesea (Chinese: 滋色) also had the characteristics of the old Chinese style, but at first, products like sculpted lipsticks were considered a bit pompous. But after two or three years of market education, Japanese consumers have gradually become more receptive to this type of product.

The third is “beauty brands without borders”. For example, although the popular 3CE brand is a Korean brand, it does not look particularly different from local Japanese brands. The Chinese brands Perfect Diary (Chinese: 完美日记) and Colorkey (Chinese: 珂拉琪) belong to this type. Borderless functionality is a double-edged sword. Although consumer acceptance is not low, it means that the brand lacks clear recognition and positioning at the beginning, so that the brand’s appeal to users and consumer loyalty to the brand are limited. .

The current state of the Japanese cosmetics market

1)Market Overview

Japan is the world’s third-largest cosmetics market, with a market scale of 150 billion yuan. Among them, Shiseido, Kao, Gaosi, Pola Orbis and other Japanese local brands account for nearly 40%; P&G, L’Oréal, Estée Lauder and other European and American brands account for nearly 30%; The remaining 30% of the beauty market is made up of other niche brands, Korean brands, Chinese brands and other foreign brands, with a share of around CNY 50 billion. In the CNY 50 billion market, Korean brands are doing well. This year, the annual GMV of one or two brands is estimated at more than CNY 500 million. By the end of 2022, Korean beauty brands are expected to reach 5 billion in market sales. The sales volume of Chinese cosmetic brands in the Japanese market is about 600 million yuan, but this does not represent the future scale, simply because Chinese brands have not yet fully developed in the Japanese market. It is estimated that the share of Chinese brands in the Japanese market will increase four to five times in the future. Therefore, the Japanese high-barrier market has enough competition space for Chinese cosmetics brands to think over and explore.

MoldBreaking focuses on the beauty industry and provides the integrated D2C solution for Chinese brands going to Japan.

In an interview with Equalocean, MoldBreaking founder Guo Ruiruo pointed out that the Japanese market has three main characteristics. First, there is greater demand in the market. Chinese makeup has been prevalent in Japan for two years, and the attributes of the cosmetics industry’s natural close connection with social media platforms and Japanese consumers’ love for Chinese makeup have led to a large number of videos imitating the Chinese makeup spreading to the Japanese market, resulting in strong demand in the market. Second, the Japanese market is active, with a small increase but a large capacity. Therefore, the Japanese market can give new brands more development opportunities. Third, the current Japanese e-commerce market is equivalent to the stage when Taobao, the main e-commerce platform in China, rose to prominence 10 years ago. Therefore, Guo predicts that the Japanese e-commerce environment will definitely change very significantly over the next few years.

2)Differences between Chinese market and Japanese market

Guo Ruoxi believes that the Chinese market is different from the Japanese market in three aspects: customers, channels and brands.

In the Chinese market, e-commerce platforms are dominant, and brands and users are cut off by different platforms. Major e-commerce platforms in China include Tmall, Jingdong, and Jindo, which have high traffic and well-established rules within the platforms, and brands and users trade according to the rules of the platform. In contrast, Japan’s offline economy is very strong, with more than 90% of sales channels relying on offline. Although there are also platforms such as Amazon and Rakuten in Japan, at least in the beauty industry, these e-commerce platforms do not account for a high percentage of sales, and the platform is just one of the channels of perception and purchase for Japanese consumers. .

Moreover, the attitude of Chinese and Japanese consumers and brands towards discount activities is diametrically opposed. Chinese brands invest a lot of budgets for shopping festivals like 618, and consumers are indeed attracted by coupons and other offers to place orders. But this is somewhat unacceptable behavior for Japanese brands and consumers. Japanese brands are more interested in long-term effects and will not be inclined to launch various discount activities.

Conclusion

EqualOcean has always been committed to helping Chinese companies go global and helping foreign companies and organizations seize growth opportunities in China. We believe in the value of globalization and our mission is to connect China to the world. In the next article in this series, EqualOcean will continue to analyze the different channels and business strategies of Chinese cosmetics brands entering the Japanese market.

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