Market Intelligence
Cosmetics and Toiletries Japan Trade Development

Japan Cosmetics and Personal Care Industry Update

According to the Ministry of Economy, Trade and Industry (METI), the size of Japan’s cosmetics and personal care products market was about USD$35 billion in 2019, making it the world’s third largest after the U.S. and China.  Japan is home to about 3,000 beauty care companies, including global brands of Shiseido, Kao, Kosé, and Pola Orbis.  U.S. players are still dominant, collectively third in market share amongst importers, behind France and South Korea, but compete, increasingly, against not just Japanese companies but those from around the region, including Thailand and China.

Key recent trends are as follows:

  • Skincare: Skincare products dominate 53 percent of the Japanese cosmetics market. Anti-aging, brightening, and moisturizing products are in high demand. Eye zone care products are trendy because of face mask-wearing during the global Covid-19 pandemic. Japanese consumers are known for their sophistication, demanding high product quality and safety.  They follow fashion trends and are keen on experimenting with new and unique ingredients with effective results. Scientifically researched cutting-edge cosmetics products are appealing. Social movements related to health and sustainable lifestyles affect Japanese consumer behavior in selecting products that promote natural, organic, clean beauty and wellness.
  • Direct-to-Consumer (D2C): Cosmetics companies and brands adopting the D2C model have enjoyed considerable sales growth in 2020, despite the COVID-19 crisis. The model has allowed companies to adapt to consumer needs and develop personalized products. This business model is prevalent among Millennials and Generation Z consumers.
  • Technologies in Beauty Products: Japanese industry continues to adopt technologies in product customization and personalization. Examples include Pola Orbis’s AI on individualized skincare development, Kao’s fine fiber technology with its ultra-thin skin layer diffuser application, and Fancl’s virtual AR make-up simulator. In May 2021, Shiseido and Accenture announced a joint venture to accelerate Shiseido’s digital transformation.

The Ministry of Health, Labour and Welfare (MHLW) regulates cosmetics and personal care products under the “Pharmaceutical and Medical Devices Law” (PMDL).

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