Newspaper article The Daily Yomiuri (Toyko, Japan)

Cosmetics Makers Speed Up Efforts to Expand Overseas

Newspaper article The Daily Yomiuri (Toyko, Japan)

Cosmetics Makers Speed Up Efforts to Expand Overseas

Article excerpt

Domestic cosmetics makers are accelerating their efforts to expand overseas.

Signs of slowing demand regarding the "bakugai" explosive shopping sprees of foreign tourists have made future conditions in the domestic market increasingly uncertain. Cosmetics makers are searching for new ways to secure stable revenue sources.

In July, Shiseido Co. completed its acquisition of Gurwitch Products LLC, a luxury cosmetics company from the United States. It was Shiseido's first acquisition of a foreign company in six years. Its previous acquisition was another U.S. cosmetics company, Bare Escentuals Inc.

In late June, Shiseido signed an exclusive licensing agreement with Italian luxury brand Dolce & Gabbana for sales of fragrances and other products. Kanebo Cosmetics Inc. released products under its new KANEBO brand on Sept. 15, aiming to expand its sales channels mainly in other Asian countries.

Starting in August, Kose Corp. launched its flagship basic skincare product brand, Sekkisei, at Japanese-style counters in duty-free shops in Hawaii.

These efforts are being spurred by the shrinking domestic market. Previously, Japanese manufacturers would boost brand recognition and expand the domestic market by releasing spectacular ads and conducting face-to-face department store sales.

However, in tandem with increasingly widespread use of the internet, a growing number of consumers tend to buy lower-priced cosmetics at drugstores and rely on word of mouth.

In the domestic market, cosmetics shipments reached 1.5 trillion yen in 2015 due to growing demand from inbound foreign tourists. That was almost the level seen before the collapse of Lehman Brothers in 2008.

However, many in the industry do not see this growth lasting for long. …

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