BWConfidential,
the Paris-based news group, recently reported on the state of Japan’s beauty
market. Here’s what they found.

Market is stable: Despite the effect of the earthquake in March 2011,
the Japanese cosmetics market has put in a surprisingly stable performance.
Last year, product shipment in volume was down 1.2% versus the previous year to
$18 billion. However, there is a continuing trend towards cheaper items, which
was sparked in 2009 when the market posted a record plunge due to the global
economic crisis.

Lower price points win: Consumers continue to buy
more cosmetics, but at a lower average price; although for 2012, analysts
predict a stable trend of price deflation. And retail sales figures from
department stores, mass-market outlets and drugstores were positive in the
months of April, May and June this year.

Buying habits have evolved: Over the past three years, the
decrease in sales has been felt mostly in the so-called “volume zone” of
medium-priced cosmetics retailing from $26 to $64, as many consumers shifted to
more accessible brands. This trend has been particularly difficult for domestic
brands, whose traditional strength is in this middle-range market segment.
Strong performers in the low-priced brand arena include Rohto Pharmaceutical’s
brand Hada-Labo, Shiseido’s Senka and Kanebo Cosmetics’ Ururi.

Multi-functional trend hits Japan: Low prices alone are no
longer enough to attract consumers, and there is also an emerging trend for
products combining multi-functional benefits and simplicity. This is one reason
that Kanebo Cosmetics is revamping its Freshel brand with a new concept this
fall. This “time- saving” line is said to cater to busy women in their thirties
and forties, aspiring to an easier daily skincare routine. The 19-sku line,
offers “all-in-one” products combining many functions (skin protection,
lotion).

To read BW Confidential’s full
report on the Japanese market, go to BW Confidential.