Older consumer attract Japans skincare industry

With 22 per cent of Japanese over 65, the older consumer is a lucrative market for the skincare industry.

But times are tough even for giants Kao and Shiseido who together command a third of industry sales. The widely reported tales of more-precious-than-gold skin creams obscure a more humble reality. Shiseido’s 2008 annual report states that Japan’s cosmetics market is “essentially not growing” and is a “zero-sum battle” for market share. A leaner and meaner Shiseido has reduced its portfolio of brands from 100 to 21. Kao’s 2008 annual report called growth stable in the high end, sold mostly through department stores, and in low-priced, self-selection brands, while the middle segment between 2,000 and 5,000 yen is shrinking. Japan has the world’s oldest population, making older women a key market and anti-aging products a growth sector.

Beautiful skin is a national fixation in Japan, and deep-pocketed consumers pay shocking prices for the promise of middle-aged beauty. Skincare priced above 20,000 yen (US$200) saw sales growth of 24 per cent last year, according to Shiseido. Prices scale upwards to ‘super premium’ – those that sell for 100,000 yen. A 40-gram jar of Shiseido’s Cle de Peau Beaute Synergique Cream or rival Kanebo’s Twany Century Cell Rythm Cream both sell for 126,000 yen, while Kose’s 45-gram pack of Cosme Deccorte AQ Cream is a relative bargain at 94,500 yen.

Skincare leads toiletry categories in Japan. Last year, skincare tallied sales of 1.5 trillion yen, or 42 per cent of the 3.5 trillion spent on cosmetics and toiletries, according to Euromonitor. This is nearly matched by ‘premium cosmetics’, a high-end catchall with 41 per cent of sales worth 1.4 trillion. Both categories are mature, and, states Euromonitor, compound annual growth was two and 1.1 per cent respectively between 2003 and 2008.