On November 8h, China Beauty Expo’s World Tour landed in Japan. This stop on the tour brought together Mr. Sang Jingmin, Chairman of China Beauty Expo (CBE); Ms. Sang Ying, Secretary-General of CBE; Mr. Minoru Kobata, President of Polystar; Mr. Kamata Masashi, former General Manager of Shiseido China and Chief Representative of CBE in Japan; and Dr. Yang Jianzhong, Chairman of the Sino-Japanese Cosmetics International Communication Association. They met with over 200 representatives from Japanese cosmetics companies, JETRO and Asahi Kasei.
Traditional cosmeceutical chains like Supature, Cocokara, and Dr CiLabo as well as established brand owners such as Shiseido, Momotani Juntenkan, Kao, and Lion have driven the growth and maturity of the Japanese market.
Japan’s cosmetics market has become saturated and shrank since 2013. The Japanese cosmetics market fell from RMB 307.8 billion (US$46.6 billion) in 2012 to RMB 197.8 billion (US$30 billion) in 2016. Nearly 80% of the Japanese cosmetics market is dominated by local brands. Slow market growth at home has pushed more Japanese companies to look overseas for new opportunities.
Japanese Cosmetics Gain Popularity in China
Compared to Japan’s slow-growth market, China’s demand for cosmetics has exploded. Euromonitor data indicates that sales of cosmetics in China topped RMB 336 billion (US$51 billion) in 2016 with a compound annual growth rate of over 9%. The market is expected to reach RMB 358.77 billion ($54 billion) in 2017 and RMB 400 billion ($60 billion) in 2018. High quality Japanese cosmetics are poised to cash in on this rising demand for imported goods.
According to CBE Chairman, Sang Jingmin, changing Chinese tastes also favor Japanese products, “The post-90s generation represents more than 50% of China’s consumption. They prefer personalized and fashionable products with an emphasis on technology and high quality. Japanese products are well-positioned to take advantage of these demands.” Data from NetEase Kaola shows a preference for Japanese cosmetics across all Chinese age groups.
Chinese Market + Japanese Technology = New Opportunities
Demand from China’s post-90s consumers puts pressure on Chinese companies to upgrade their products and technology. Nearly 4,000 Chinese chemical producers now face an urgent need to transform their product technology.
According to Dr. Yang Jianzhong, Chairman of the Sino-Japanese Cosmetics International Communication Association, “Chinese brands are focusing on technology. But compared to their Japanese counterparts, they are still way behind. Some Chinese companies can develop formulations, but they miss basic theories. There are only a few Chinese brands that have been able to achieve both.” Chinese companies are actively seeking partnerships in technology, patents, and products to increase their strength. Over half the members of the Sino-Japanese International Communication Association are leading Chinese cosmetics suppliers and are actively looking abroad for expertise.
So far, Japanese cosmetics brands have won 39 IFSCC awards, making them the world leaders. French brands come in second place with only 12 awards.
CBE’s chief representative in Japan and former General Manager of Shiseido China, Mr. Kamata Masashi also shared his views on the China market and provided guidance and suggestions for companies planning to enter China.
Commenting on the CBE 2018 Country of Honor, Japan, Mr. Minoru Kobata noted, “2018 witnesses the 40th anniversary of the signing of the China-Japan Peace and Friendship Treaty. Japan will be the Country of Honor for CBE 2018. This not only reflects the connections between China and Japan cosmetics industries but also the force of economic development between the two countries.”
Ms. Sang Ying, Secretary-General of CBE provided details on CBE 2018, emphasizing the Country of Honor, Japan. She explained, “The exhibitors from Japan will appear together in the N5 International Fashion Pavilion. Through events like the Cosmetics and Retail Industry Conference and the Summit Forum for Cosmetics Supply Chain in China, Japanese experts will be able to share their latest technologies and products. She also shared details on the opening ceremony, new product introduction conferences, technology conferences, and special events around retail technologies in Japan.