BW Confidential - Issue #2 - May/June 2010 - (Page 36)

Market watch: Asia Japan credit: stock.xchng More down time The beauty market sees its greatest decline yet, as consumers trade down to low-priced products by Raphaëlle Choël T he crisis hit Japan hard. Beauty sales by value fell by 8.1% to ¥1,385bn ($12bn) in 2009, according to the Ministry of Economy, Trade and Industry—the market’s biggest drop ever. Between 2002 and 2008 the sector has seen average growth of 0.8%. However, sales in units show a different story, with a decrease of just 0.5%. This indicates that the market was hit essentially by a decline in prices, especially for mid-range items retailing at around ¥2,000-¥5,000 ($21-50) and by a consumer preference for low-cost products. Indeed, companies offering products priced less than ¥1,000 ($9) or sold through the internet stood out from the crowd last year. Among the winners were pharmaceutical skincare company ROHTO and skincare brands CHIFURE and Dr.Ci :Labo. Other key successes were Kanebo’s Freshel Moist Lift There has been a shift from cosmetic stores to drugstores and it is thought that the recession will only intensify this trend W Cream targeting women in their thirties, which doubled its 2009 sales target in just four months and the group’s Kate brand (which is the number-one brand in the open-sell youth make-up market, with sales of over ¥10bn ($90m) for 2009. Shiseido’s The Collagen also performed well, as did its Uno Fog Bar, a men’s hairstyling product range that sold more than six million units in just six months. Analysts say that the success of low-priced items reflects a structural change in Japanese consumers’ habits: they are now looking more for value and “puchi pura” (small prices). Retail focuses on low prices The reaction of the drugstores, which account for more than 25% of the market and general merchandise stores (GMS) was to focus their offer on lower-priced products. 36 May-June 2010 - N°2 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #2 - May/June 2010

- Brand and retail news recap
Take note
- Market facts, figures and trends
The latest fragrance, skincare and make-up launches
Best of BW
- Market highlights
- Clarins Fragrance Group president Joël Palix
Insight : skincare
- Category overview
- Industry viewpoint
- Trends
- Training in spas
- Spa case studies
Market watch : Asia
- Regional analysis
- Japan
- China
- South Korea
Focus : Fragrance creation
- Fragrance regulations
- Perfumer roundtable
- Six up-and-coming beauty brands
Travel retail
- Asia regional roundup
- Interview with Korea duty-free
Last word
- Morning Star equity analyst Erin Swanson on beauty’s threats and opportunities

BW Confidential - Issue #2 - May/June 2010