In an exclusive interview, the DHC President Midori Miyazaki delves into the Japanese cosmetics industry's resilience, despite K-Beauty competition, highlighting Japan's meticulous approach and advanced R&D. Introducing new products like DHC Naturiza E, the president underscores DHC's customer-centric growth strategy across various business segments.
The biggest rival to J-Beauty is K-Beauty, and it has been gaining momentum due to the increased popularity of Korean culture. However, despite this, Japanese firms are still leaders in the cosmetics sector. What do you believe to be the strengths and weaknesses of the Japanese cosmetics industry today?
In comparison, I believe that some of the strengths of Korean brands are also strengths of Japanese brands. Many of these strengths can be traced back to simple values of thoroughness and meticulousness in manufacturing, technology, and other precision-based skills. All of these aspects combine to create what is essentially a blueprint for the national character of Japan. This thoroughness is clearly demonstrated within the beauty and cosmetics industry. On the other hand, the Korean market is currently characterized by dynamism and rapid growth. Japan shared this in the past, but currently, the Japanese industry has reached a level of maturity. Nevertheless, you can still count on the Japanese market for its technologies, R&D capabilities, and engineering capacity. I believe the Japanese market is an ever-present, unshakable force with great resilience.
Regarding our company and our global business, we had an office in Switzerland. However, skincare products are difficult to promote across borders, especially since European and Asian skin is so different. Climate differences also play major factors in people’s skin structure. We were not able to grow in Switzerland as we would have liked, but we have established operations in the US, China, and Taiwan. Including countries without our local offices, we distribute our cosmetics and health food products to approximately 20 countries, with a significant emphasis on the Asian market. Currently, we are seeing great growth in the Asian market for our products, especially in Vietnam.
One of the products your firm is known for is your Deep Cleansing Oil, a multiple award-winning product containing extra-virgin olive oil. As the president of DHC, why do you believe this series has been so successful, and what makes it superior to more conventional skin cleansing products on the market?
First, when discussing what is best for our skin, it is most important to avoid irritating the skin as much as possible. Our faces are subjected to many particles and rays daily just by living in our environment. The key to beautiful skin lies in day-to-day care and limiting external factors that could cause skin irritation. One key to the great success of our Deep Cleansing Oil is the use of organic olive oil from Spain. Made from 100% natural ingredients, it maximizes cleansing capacity while reducing facial stimulation. The cleansing time is very short, meaning we reduce the amount of time the face is exposed to external factors.
Skincare is more prevalent than ever in Japan, especially considering the country’s current demographic woes. Japan is the world’s oldest society with a rapidly shrinking population due to low birth rates. On the plus side, Japan’s anti-aging cosmetics industry is thriving, boasting annual revenue that surpasses USD 10 billion. Firms are capitalizing on older consumers' desires for youthful skin. What strategies has your company employed to cater to the desires of older consumers, and what potential challenges might Japan’s anti-aging cosmetic sector face in the coming years?
From our perspective, we cater not only through our anti-aging cosmetics products but also through our supplement business. We have a policy to think about the pace of aging and how we can delay it. This involves delaying the aging process through beauty and combination supplements, which users can start taking in their twenties to delay aging in their forties, fifties, and sixties.
If you take active steps towards anti-aging, you can delay the pace by two years within one year. Our strategy is to target those at the preventative level to promote and deepen their awareness of the impact of taking these supplements. It comes down to having those in their twenties and thirties start taking these supplements, combined with cosmetics based on natural ingredients.
Health foods and supplements are not known for their great taste. They often have concentrated nutrients or specific ingredients for health purposes, which may not always be pleasant. These products need to achieve the right balance of nutrients to meet dietary needs or health goals while avoiding excess nutrients. How do you achieve the right balance between nutrient intake and flavor in your health supplements and products?
Our strategy with health foods and supplements is not about chasing trends or fads but establishing sustainable daily habits. We aim to eliminate the unpleasant and tedious aspects that make habits hard to continue long-term. Regarding taste and balance, our strategy is to address them carefully depending on the product.
Supplements are not necessarily food replacements, so we don't emphasize taste much. Instead, we focus on making it easy for clients to take the pills or capsules by focusing on the size and reducing the amount needed per consumption. Our health food products, like our Protein Diet Series, are meal replacement products where we aim to create delicious flavors. To ensure continuity, we provide diverse flavor variations to prevent clients from getting bored.
In our meal replacement options, we have our Hot Series, such as soups, and options for desserts, like cupcakes. We have developed ways to incorporate meal replacements into customers’ daily routines easily.
In December 2023, you launched DHC Naturiza E, which helps with stiff shoulders, stiff necks, and poor circulation in the hands and feet. Why did you develop DHC Naturiza E, and what are your expectations for it as a brand-new product?
This is a pharmaceutical, but we do not necessarily aim to strengthen our pharmaceutical sales. Our overall approach is to promote extending our customers' healthy lifespan, shifting to a preventative healthcare model. However, some customers struggle with various ailments, so we developed DHC Naturiza E to help improve their condition.
Another supplement we provide, called Equal, is based on soy isoflavones. It supports the physical and psychological changes and worries that many middle-aged women face. We aim to support women's daily health through a well-balanced consumption of pharmaceuticals like DHC Naturiza E and health food products like Equal.
Pharmaceuticals are just one of your business divisions, alongside cosmetics, health foods, apparel, and more. Which business segments are you looking to strengthen going forward, or which do you believe have the most potential for future growth?
The answer is definitely our healthcare and beauty businesses, which have been the two main pillars of our company.
These core businesses have driven our company’s growth, particularly the success of the DHC brand. Our other businesses are peripheral but have developed as a result of our company philosophy, which is based on cherishing our customers' voices and opinions and responding to their needs. We have always prioritized our clients' comments and feedback, focusing on product development to address their needs. This ethos is evident in the development of our other businesses. For example, in our apparel business, we don't chase trends or fads. Instead, DHC is known for functional capacities, such as UV ray-blocking apparel. There is always a functional element to support our clients’ needs, and we take pride in being a company that responds to customer needs.
Can you elaborate on the role partnerships play in your business model, and are you looking to partner with overseas companies as well?
Regarding partnerships, we are considering various types as a way to develop.
It has been one year since we were acquired by the ORIX Group, which has opened up new channels and possibilities domestically. Globally, we are also actively looking for partners overseas because we believe that genuine success requires localization. Strategies like this are not achievable without local partners who can quickly grasp the needs of local markets. If there are partners where we can create mutually beneficial agreements, we will actively pursue them. However, we are not in a rush; we are looking for the right partners that fit.
Your company distributes to over 20 countries, with a particular focus on the Asian region. Moving forward, are there any other countries or regions you believe have potential for your firm?
When it comes to overseas markets, we need to fully understand each one, especially from a legal point of view. Confirming policies and standards in place abroad is important. Vietnam is a success case for us because we were able to elevate brand awareness and strengthen brand recognition. From there, we clarified distribution, allowing us to control the speed of growth from Japan.
What is next for DHC? What message would you like to share regarding DHC’s future?
While DHC is a made-in-Japan company, it is still considered quite small. However, when it comes to quality and price, we provide a balance between values that people care about. This balance allows us to compete on the global stage. We are not aiming to become a luxury brand, but we are confident we can become an integral part of people’s daily routines worldwide. The real goal is contributing to people’s happiness through promoting longevity, wellness, and health. No matter what technological advancements push humanity forward, we stick to our mission of allowing people to lead happy and healthy lives.
For more details, see: https://www.dhccare.com/
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