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Human Resources Communications: Crafting beauty excellence in Japan

Interview - January 24, 2024

Human Resources Communications explores the synergy between their various business divisions, addresses diverse skincare needs in different markets, and discusses strategies for international expansion.

IKUYO KASUGA | PRESIDENT HUMAN RESOURCES COMMUNICATIONS LTD.

Over the past 30 years, Japan has seen the emergence of regional manufacturing competitors replicating the Japanese monozukuri process, often at lower labor costs. This trend is particularly evident in the cosmetic industry, where Korea's K-beauty has become a significant threat, especially with the rise of Korean popularity in Western countries. However, Japanese firms such as Shiseido and Kose continue to be leaders in the cosmetic industry. How have Japanese firms maintained their leadership despite stiff regional competition? Additionally, what are the current strengths and weaknesses of Japanese cosmetic firms in the industry?

To address your question, we need to refer to the sales data and compare Japanese cosmetic products with those of competing companies. Analyzing this data helps determine the leading companies in the industry. However, relying solely on figures may not fully reflect the effectiveness of Japanese cosmetic products. Some products may have lower sales, but it doesn't necessarily mean they are less effective. One of our company's strengths lies in the loyalty and trust we've built with our customers. Many of our clients have been using our products for a very long time because we've demonstrated the reliability and trustworthiness of our products.

Another key strength is our extensive history of innovation. Japanese companies are renowned for their commitment to finding solutions through research and development, consistently creating new products. Their persistence in development, innovation, and improvement has allowed them to maintain a leading position in the industry. Many other companies often replicate what Japan has been doing for years.

Customer loyalty is a testament to the quality of our brand. While Korean beauty products are gaining popularity and are introducing many new cosmetic items, customers still show attachment to the tried-and-tested Japanese quality products. Japanese customers prioritize safety as the most crucial product quality. Building customer trust by offering safe and high-quality products helps us remain competitive despite having cheaper alternatives from competitors. However, as customer needs evolve, Japanese companies need to be flexible to adapt and meet the changing demands of the market.

J-beauty's foundation is built on quality products, a significant factor in the success of many Japanese companies. However, speed is not our strong suit. Most Japanese companies take their time in decision-making, unlike Korean companies that swiftly make decisions and are quick in introducing their products to different markets. In the beauty industry, where trends change rapidly, it's crucial to always have new products to meet customer demands.

Double 11 is the most significant sale in China, and achieving a high rank in this event is prestigious. In the vast Chinese market with numerous companies offering various solutions and products, our makeup removal cleansing solution secured the 4th position in the Double 11 ranking. These solutions come in different forms, such as cream, oil, balm, liquid, and gel. Bioderma ranked 1st, a Chinese brand secured the 2nd position, and a product by the L'Oréal Group took the 3rd place. While rankings constantly change, achieving 4th place is the highest we've reached. Before COVID, we even secured 1st and 2nd places. Recent rankings highlight the global growth of Chinese and Korean brands. In J-beauty, cleansing products hold particular importance compared to other products.

 

Your business comprises three distinct divisions: the product business offering the Nursery brand as a professional cleaning brand, the spa division including Spa Nursery and Spa Nursery Japan, and the bakery business with one store and two kitchens. Could you elaborate on the synergies created among your different business divisions? Additionally, how do you plan to facilitate the growth of each division in the future?

With our product division, we introduced a makeup cleansing solution. The Japanese people are known for their meticulousness about cleanliness and neatness. Our products are motivated by the desire to cater to and resonate with this natural inclination. Thorough makeup removal is highly valued, considering the importance of cleanliness. Drawing from my experience in the spa business, I understand the significance of effective makeup removal, recognizing the diverse cleansing needs of different skin types.

The spa business and our product business are closely intertwined. Regular visits to spas provide opportunities to engage with customers, understand their preferences, and gather insights into what they'd like to see in our products and services. Armed with this information, we head to the production site to create solutions like our gels that align with our customers' needs.

As a working mother of two, returning home tired is a common occurrence. However, using a makeup remover with a pleasant fragrance helps me relax. Thus, a good makeup removal product is not only about cleansing but also contributes to the relaxation of the mind. Integrating these mind relaxation effects into skincare products is crucial for the future. Interacting with customers to comprehend their needs is vital. Being customers ourselves and trying our products allows us to gather valuable feedback for product improvement. Additionally, our research and development involve collaboration with universities to study raw materials for optimal product effects.

 

Your company operates in Dubai and China. How are you addressing the diverse skin care needs of different skin types in different markets?

Our products are easily adaptable for foreign markets, catering to Westerners and Asian skin types. Japanese skin, being more sensitive due to its increased porosity, benefits from deep-penetrating moisturizers. This sensitivity aligns with the skincare needs of many Asian countries, making our products suitable for a broader market. Additionally, we've successfully developed skincare products that meet the preferences of the Western market.



In our interviews with other companies, the significance of collaboration to leverage the expertise of other companies for global competitiveness was emphasized. How does collaboration factor into your business model, and are you currently exploring collaboration opportunities with overseas firms?

We actively collaborate with local companies in various regions. For instance, we partnered with a local company to facilitate the establishment and registration of our business in the area. Additionally, we engaged local distribution partners with established networks to help introduce our products to the local market.

 

Concerning your international expansion, which region or market do you plan to focus on moving forward? Additionally, what strategies are you considering to employ to accomplish your goals?

In terms of international expansion, our focus for the future lies in conducting thorough market research before deciding on specific regions. Considering the growing population in Dubai and the limited presence of Japanese companies there, it presents an intriguing opportunity. Expanding in the Middle East, beginning with economically growing countries near Dubai like Saudi Arabia, Egypt, Turkey, and Pakistan, aligns with our strategy. The increasing population in these areas signals a growing demand for skincare products.

An essential aspect of entering foreign markets is exploring the possibility of sourcing raw materials and functional ingredients locally, reducing the time and costs associated with shipping from Japan. The logistics of shipping from Japan to Dubai, taking around a month and a half, prompts us to consider this as the next strategic step in our Dubai expansion.

 

The cosmetic industry has traditionally targeted the female population, but there is a growing trend in male beauty products. Currently, around 15% of men use cosmetics, and approximately 17% are considering starting to use them. Younger men, in particular, are more open to using products like mascara or foundations. With the male cosmetic market on the rise, what opportunities do you identify for your business, and do you have plans to develop specific products for this demographic?

We were considering this expansion due to the observed growth in demand for these products in our market research. However, Japan tends to move a bit slowly in this regard. The market is currently saturated with numerous solutions, with many Chinese and Korean companies already offering eyeliners and adapting to the ever-changing demands. During our recent visit to Dubai, we noticed a rising trend among local men using Japanese lotions, indicating a growing openness to cosmetic products. This presents a promising opportunity for us to cater to the increasing demand. We aim to launch a product tailored for Dubai men within a year, understanding that acquiring trademarks is a time-consuming process.

 

Japan is renowned for its innovation and ability to address evolving global needs through research and development (R&D). Could you share your current R&D focus, and are there any specific products or technologies that you would like to introduce to our readers?

Recognizing the rising demand for men's cosmetics, we are directing our efforts towards developing products for men's care and hair care, catering to both men and women. Japanese women are renowned for their beautiful hair, and our local hair care practices have not yet been widely introduced to the global market. We are enthusiastic about promoting our hair care products internationally, bringing the benefits of our unique hair care regimen to a broader audience.

 

Post-COVID, the number of inbound tourists to Japan in the past quarter has surpassed pre-COVID levels. As a beauty company, what strategies are you employing to capitalize on this phenomenon and attract tourists to use your products or services?

Our primary emphasis lies in showcasing Japanese hospitality rather than directly promoting our products. By introducing tourists to our spa salons and providing them with our best beauty services, we establish a win-win situation. This unique approach not only allows us to offer exceptional experiences to foreign visitors but also provides valuable insights for our Research and Development team. Interacting with individuals with diverse skin types and concerns inspires us to create innovative products that cater to a wider range of needs.

 

Your company was established in 2001, and as a relatively young company celebrating its 22nd anniversary, what goals and dreams do you have for your company? Could you share your aspirations, especially if we were to revisit you on your 25th anniversary in three years?

J-beauty is well-known in Asia and Southeast Asia but not yet globally. Despite being a small company, we hold the belief that beauty is a crucial aspect of life, impacting the well-being of both females and males. As an SME with significant aspirations, we are eager to introduce our company to the world.

Drawing inspiration from the success of Japanese bakeries in Dubai, we have a unique concept to import foreign bread to Japan and adapt it to Japanese-style baking, creating healthier and more delicious options. Our company philosophy goes beyond introducing products; we aim to share beauty and peace of mind through our salons and diverse products, including our bakeries. The ultimate goal is to merge beauty with a healthy lifestyle.

Fueled by a commitment to excellence, we challenge the notion that bread is inherently unhealthy. After exploring Berlin, we began local production of bagels and croissants. Shortly, we plan to introduce these products to our kitchens in Japan, making adjustments to the bread to align with the Japanese style of baking.

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