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Chemicos Creations: A Trusted OEM Supplier of World-Class Eyeliners

Interview - May 6, 2024

A Japanese company approaching its 30th anniversary, Chemicos Creations crafts pen-type liquid eyeliners of the highest quality, specializing as an original equipment manufacturer (OEM) for major cosmetics brands.

KATSUTAKA HATTORI, CEO OF CHEMICOS CO., LTD.
KATSUTAKA HATTORI | CEO OF CHEMICOS CO., LTD.

If we could start with a quick introduction to your company. What are Chemicos Creations' main competencies and what allows you to stand out among your competition in the market of eyeliners?

Our company is known for pen and liquid eyeliners and we stand very firmly in this market. There is obviously competition out there but they cannot make products like us. Everything we do here is developed and produced in-house, adding to the strengths of the company. Huge global brands are also our customers, and everything we do for them is on an OEM basis. We like to consider ourselves as more of a proposal-based company, customizing the formulation and the container itself with the branding activities of our clients. Everything from beginning to end can be promoted in-house to release the best liquid eyeliners.

Formulations usually come as a form of collaboration with customers, and we can bring a lot to the table in this regard because of our extensive experience. This is creating better results for the customers.

Before I started this company, I used to work for a raw material company, and this means that I do know how to make good formulations from chemical compounds. The customers have a troublesome situation because they often lack the knowledge to create or understand chemical compounds. We try to simplify this process by proposing a better solution. I think a very unique strength of Chemicos Creations is that we go to the areas where no other company dares to go with a very unique product lineup. This is also a benefit to our firm since our products are very difficult to copy.

Ideally, we are looking for segmented areas, and quite frankly there are a lot of Japanese companies out there operating on an OEM basis but we try to go into a specific area and polish in order to get the best results. This is how we’ve managed to achieve the level of trust and market share we have to this day. We had experiences before where other companies tried to mimic or copy the products that we were pushing to the market, especially in China. With Chemicos Korea we have entrusted our technology to them to produce products for the Korean and other foreign markets..

If we look at other OEM-based companies in our industry, when they enter a market, they are burdened with a huge list of over 100 different products at once. We try to segment the market, introducing only one type of product at a time, leveraging the strengths we have, and catering the product to the particular market.

As you know, brushes are widely used in calligraphy, especially within Asian markets. This product actually acts as an inspiration for us and we are taking the expertise that has been developed with traditional products and bringing it to modern products that people want.

 

You mentioned the importance of Japanese culture in your products, but over the past few decades, Korean brands have dominated the landscape of cosmetics. Nonetheless, within these products, several active ingredients come from Japan and we are also seeing a consumer preference shifting towards the Japanese, less-is-more philosophy which emphasizes high-value products with more effective ingredients. As a pioneer in eyeliner products, can you tell us the key factors that have allowed Japanese firms to maintain a strong foothold in the global beauty industry?

There are many things we can outline, and in particular, I would like to outline the Japanese pioneering spirit. We are often the first to adopt technologies or techniques in manufacturing. Being the first in line is something that pretty much sums up Japanese manufacturing companies.

Safety and quality matter so we pay a lot of attention to that aspect. There are a lot of elements I feel Japanese companies can prioritize, and with that promote the standards of Japan to the world. Rigorous testing and strict safety standards are the keys to gaining the trust of customers no matter the industry.

 

What do you believe are the strong points of Japanese firms in general?

I would mention more of what I’ve said already, but at the same time, I would like to draw attention to the craftsmanship that is on display in Japan. There are techniques and technologies that have been developed and passed down over generations. Of course, these days the world is a very globalized place, so these techniques and technologies may go to other countries, but I think at its core, Japan is a place that always tries to sustain a foundation of knowledge to build upon little by little. We are very detail-oriented people and we understand that developing skills with our hands requires a lot of time and commitment. This same commitment is clear and present in Chemicos Creations. The essence of our company is the accumulation of knowledge and expertise in order to create cosmetic products that are truly appreciated by our customer base.

We stand in a very interesting spot in the market since we are creating unique products that are extremely difficult to replicate. As I mentioned, we are creating unique formulations in containers produced in-house, positioning our company in a very special spot.

 

The global eyeliner market was valued at USD 5.9 million in 2022 and is expected to reach USD 9.4 million by 2032. This growth is expected to be driven by interest in makeup due to celebrities and social media influencers. How do you foresee the next 12 months for your industry and what do you believe will be the main drivers of growth from your perspective?

I believe a key aspect is the shift away from specifically women’s products to more genderless products. Men’s cosmetics have seen huge growth. Of course, our company analyzes the market and we approach it in a way to optimize our products to reach a balance within the market itself.

From our perspective, the Japanese market, while progressing, is still very targeted towards women in terms of cosmetics. Eyeliners are conventionally used by women across the board. A big recent deviation is beyond the conventional colors, and the average Japanese woman might now have 5 or 6 six different eyeliner colors that she likes to use. Essentially these are extensions of the functions of eyeliners.

Another advancement in terms of functionality is patterns. Our market strategy is based on the needs of the customers, so if they want more from a product, we are going to be introducing it.

In terms of men’s cosmetics, one segment I would like to mention is sports eyeliners. As you know, market needs come from different sources. We are, fortunately, very blessed to have long-standing relationships with our customers and therefore we are able to acquire information first hand. There are so many different scenarios where people are using eyeliners, so it is important for our company to aggregate that information and develop based on that analysis. I think in essence this creates good marketing opportunities for us too. It is very important for us to foresee and forecast the customer's attitude towards different situations. As a manufacturing company, we are always looking for opportunities to produce more products.

I think that a key point here is that our company likes challenges and we’re not afraid to try new things. We try to analyze the walls of our customers’ needs and break them down through our expertise and know-how. This is how we’ve been able to develop our in-house eyeliners and containers that are able to sustain our products in good condition for a long time. The end result for us must be customer satisfaction.

We have an R&D hub that allows us to create better products. Eyeliners are slightly different from other cosmetics that people use, and often eyeliners utilize unique features. The container has to prevent leakage and the pigment shouldn’t irritate skin. In the end, everything needs to be carefully considered before we reach a production phase.

A lot of other OEM companies try to tackle the cost-performance ratio. They try to produce more products at a cheaper cost. Obviously, this generates good margins but inevitably this is a risky game. By lowering the cost, you have to lower the quality, which will lose the trust of consumers. We go in the opposite direction. Our company’s operations are all in the pursuit of creating a better product no matter the cost to ourselves.


 


Manufacturing these products comes with a series of challenges such as maintaining color stability and uniformity. You’ve developed formulas that are long-lasting and resistant to smudging or fading throughout the day. This is especially true for liquid eyeliners that require fine lines and intricate designs while at the same time balancing the need for quick drying times to enable efficient application without compromising a long-lasting finish. How are you able to overcome these challenges and provide the utmost quality eyeliners to your customers?

The quality of components is based really on three major pillars. One is formulation development, which itself is based on customer preference. With our experience in this field, we are able to propose what we believe is the best solution for the customer. Then you have production process optimization, and without our production capabilities finding a solution is simply not possible. As you are probably noticing, everything comes from the customer, and that customer is the departure point for so many processes. They are the ones that dictate what they want from us. In this regard, customer feedback is vitally important to our business operations. The last major pillar is the container itself, something that is often overlooked. Through our expertise we are able to produce both outside and inside, and what I mean by that is the outside is the packaging and inside is the ink. This adds up to a total solution for the customers, reaching an ultimate satisfaction level no matter the sophistication required.

The company pretty much shares the same values as myself. Although we have reached a level of satisfaction that is significant, we are always going to strive for improvements. There is no such thing as a perfect product or a perfect company, so with our customers we are going to look for the next level every time.

Thinking about America now, our first customer for pen-type liquid eyeliner was an American company called Maybelline which has now become a part of a group of global cosmetic brands. Back in the day we were supplying this customer, and I don’t think there was a single other Japanese company at the time that could make the same claim. That was a significant part of our company’s history. The reason we found success was because at that time America eyeliner producers were not using carbon-based products. and although these days it is a conventional product, back in the day it wasn’t. In fact, iron-oxide was the material that was conventionally used and carbon was prohibited. We are very thankful to the people of America.

 

In 1996 you were the first company to introduce pen-shaped liquid eyeliner containers, and carbon black was subsequently put to practical use ahead of your competitors. Additionally, as an OEM and ODM producer you offer your expertise to over 100 cosmetic companies globally offering a wide range of products. How do you manufacturing processes accommodate the diverse customization requirements of your clients? How do you respond to emerging trends in the world of cosmetics?

We are seeing the tendencies that we mentioned earlier such as men’s cosmetics. There are variations in needs and color requirements, especially when you consider different situations in which men’s cosmetics may be used. When we talk about sports, swimming in particular is one area that has emerged. Men after swimming feel that their faces might not be looking their best after intense competition. This is an area where we think our products could be applicable, in particular synchronized swimming.

Imagine a scenario where a woman is going to a party. Since she is going to a party, she doesn’t want to carry around a bag with all of her makeup. With an eyeliner, she can carry it in her pocket, quickly go to the bathroom, and transform her look with one simple product. Eyeliners are compact and very portable.

Eyeliners are just a start as well. Related products include eyebrow liners, shadow liners, and even lipstick solutions. I would define this as an expansion of our business to facial care.

There are two megatrends emerging from eyeliner manufacturing, and those are raw material compliance and DX. Raw materials have to be traced back to a point of safety and there are regulations that must be adhered to. This isn’t just Japan either, and each country has its own unique situation. DX is something that is sorely needed in Japan, especially since the country is experiencing labor shortages and a rapidly aging demographic. DX and IT solutions may solve these issues to some degree. There are benefits to this too, with a cheaper price, making products more affordable for clients and allowing them to increase order volume.

 

How is your PKH Series effectively handling the precise dispersion of challenging metallic and pastel colors compared to standard containers?

Carbon black alone cannot express bright colors. It must be combined with another raw material to achieve these bright color options, and we have developed a "double adjuster" to accommodate metallic and pastel colors with larger particle sizes compared to carbon particles with smaller particles. Unfortunately, I cannot explain too many details to you since this technology is patented.

Speaking of patents, we do have quite a lot. It is ironic that a lot of these patents apply to elements that are hidden and cannot be seen with a human eye. This includes such elements as the mechanism of the container to the ink composition. You have to remember that no matter how great our formula is, it is nothing without the right container to allow users to apply the eyeliner.

 

When we conducted our interviews, other companies have always talked about partnerships and collaborations as key to them in order to penetrate new markets or develop new products. What role do partnerships play in your business model and are you currently looking for any new partnerships in overseas markets?

We usually attend exhibitions in locations such as New York, Italy, and Las Vegas. We are looking for the biggest international cosmetics exhibitions. Usually, our strategy is to go directly to cosmetic manufacturing companies, basically dealing directly with the customer on an OEM or ODM basis. In some cases, distribution services are offered as an intermediary layer. I think to summarize, we are looking to go directly to the customer. The reason we take this approach is preservation. It is hard to preserve our technologies and know-how outside of Japan, and although production in China for example might be cheaper, the expertise simply isn’t there yet. We believe it is safer in our own hands here in Japan.

 

Not only are you present in the domestic market but also internationally such as in the US. You are known for exporting your products all over the globe. With that in mind, where would you like to continue your international expansion next?

Region-wise, we are definitely targeting the US and currently there is a goal to open an office in New York. To this end, we have already recruited one person in New York to help us achieve this in the near future. Opening an office in the US will also contribute to our direct sales to local customers as well as give us a deeper understanding of trends or tendencies that would be beyond our reach previously.

 

Imagine that we come back in two years and have this interview all over again. What goals or dreams would you like to achieve by the time we come back for that new interview?

Pretty much all we’ve talked about today outlines my dreams for this company. R&D is certainly a keyword in terms of goals. Honestly, it is very hard to come up with new eyeliner innovations every year since there are limits to what an eyeliner product can be before it is no longer an eyeliner. At the same time, however, there are so many things that can be done and we are trying to be ambitious in introducing new things.

I think moving forward it is going to be critical to position ourselves well within the industry. Branding therefore is key, and working with big brands is part of our strategy. In the same way that Intel is synonymous with CPU chips, we would like to be associated with eyeliners. 

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