Kitao Cosmetics Making Waves Globally With Innovative Skin Care Products

J-Beauty brands have historically faced stiff competition from Western rivals and upcoming K-Beauty brands who have shone thanks to their marketing abilities. Yet, hidden within this narrative are some intriguing dynamics. It is noteworthy to say that many of the ingredients used by large beauty companies originate from Japan, which has strong ODM makers. Additionally, there is a shift in consumer preference towards Japan's “Less is More” philosophy, emphasizing high-value products with fewer and more effective ingredients. What are the advantages of J-Beauty brands, and how do they compare to regional competitors?

Firstly, Korean companies are performing very well; however, every company has its pluses and minuses. I would say they make good products, and they do work well for some customers. In comparison, Japanese cosmetics companies emphasize minimalism; more simple solutions for customers in order to work magic.

In the market, we are now seeing the introduction of more sophisticated technology and more comprehensive skincare routines for consumers. This results in customers having to buy a lot more products to cover every aspect of their routine. Here in Japan, we go against that trend, preferring to go a simpler route with an emphasis on quality over quantity. From that perspective, J-Beauty is known for its minimalist approach, with this approach highlighting the best aspects of the raw materials used. With these aspects, we can add value to numerous products, providing more significant customer benefits. 

Another specific feature that we must talk about is the cultural influence. Japan has a rich manufacturing culture, and the word monozukuri describes the art of making things that the Japanese hold very dear to their hearts. This philosophy has led to brand attachment, and one example is our traditional matcha green tea ingredients. With a long track record, we have established our presence in the market, and to this end, customers appreciate our company. All of this takes inspiration from traditional Japanese rituals, ingredients, and cultural practices.

Worldwide, the cosmetics industry is expected to grow by 4.5%, with an evaluation of USD 716 billion by 2025 compared to USD 579 billion in 2023. A big part of this valuation is coming from young people, Gen Z, who leverage social media to purchase cosmetics and search for the implementation of organic or natural ingredients. From your point of view, what are the main drivers in the cosmetics industry?

Many drivers may shape the cosmetics industry in the years to come. I would highlight the biggest issue, globalization, which is something that most Japanese companies will have to face. We’ve already started introducing our products to a broader audience, and these overseas activities began about four years ago. We opened an LA office to bridge the gap and reach an audience in the US. Our firm constantly participates in cosmetic exhibitions, and we export our matcha products to roughly 15 countries worldwide.

Matcha is a worldwide phenomenon, and these days, many people in Europe and America understand this style of green tea. This means that it is easy for us to speak about our products because people already have some familiarity with matcha. To sum up, going global is going to be a key market trend for the foreseeable future, particularly for Japanese companies. Unfortunately, going overseas is a difficult challenge to overcome, but it is something we are pursuing.

If we are talking about trends, one we’ve seen is an increased focus on sustainability and ethical sourcing. This is significantly impacting various cosmetics sectors in Japan, and brands such as Shiseido are prioritizing sourcing ingredients ethically and implementing renewable energy practices. These initiatives reflect a commitment to environmental responsibility, resonate with consumers, and enhance the brands' reputation in the eco-conscious market. In terms of your firm, how does the growing awareness of sustainability and ethical sourcing practices impact the development and marketing of your company?

Now would be a good time to introduce some of our products as it might help answer this question. I must be honest; there was a point in time when sustainability was essentially just a buzzword that some would throw around as a marketing tool, but over time, this has changed. We’ve already been in this space for over 100 years, and many of our flagship products are based on matcha. To produce a perfect matcha that applies to cosmetics, you have to follow a long road of steps. Soil is the first of many steps and must be prepared properly for three consecutive years without using any chemicals. As you might know, farming these days relies on chemicals to bring out the best features of fruits or vegetables, but for matcha, we have to grow it without any chemicals, which is a complicated process. Luckily enough, we have plenty of experience in this market and achieving successful results. Fortunately, we have certification for our matcha, proving that our products are safe.

E-commerce and digital technologies have revolutionized cosmetics shopping for Japanese consumers, offering a personalized experience. Your company has a strong presence online, particularly overseas in the United States, boasting over 12,000 Instagram followers. In turn, you have countless influencers recommending your products as essential Japanese cosmetics. Can you tell us how your company utilizes e-commerce and digital technologies to facilitate the personalization of cosmetic shopping for consumers? Could you elaborate on any partnerships you’ve established in the United States?

Obviously, online shopping is something we often think about, but from our perspective, the conventional way of selling using physical stores is still critical. Approaching the customers in the right way is vital, and we would not be able to do so without staff who are passionate about our products. Influencers, in this sense, can reach out and make a connection with customers, and as these influencers talk about our products, they can spread the word about our brand using the trust they have gained from their followers. Even if we introduce a new product, these days, the pipeline will send those new products to the influencers we partner with first before later on being introduced to stores where people can buy the products and take them home. These influencers almost act as middlemen, properly introducing our products to the public.

I would like to talk about matcha now, particularly regarding the overseas market. Our approach in the US market with our matcha-based products really isn’t that different from our domestic market approach, which I just talked about. We approach influencers, however, in the US, money talks more, a slight difference from the domestic market where brands drive interest. We try to properly select influencers who are highly interested in our products in the US market, and with their experience, they can adequately introduce our products to the market. Using Instagram, we have now achieved over 12,000 followers, something we are very proud of.

Using beauty bloggers is not the only marketing method we utilize in America, and to this end, we cooperate with a marketing agency that conducts marketing activities for us. Here in America, things are a little different. Although we do introduce products directly to the market, we are also responsible for introducing Japanese culture to the American people. Japan has such a unique and rich history, and many Americans enjoy visiting Japan for their holidays.

Matcha product sales are projected to reach 5.5 billion by 2027, with an annual growth rate of 8% heading into 2032. Many companies have jumped on this trend, including Starbucks, which offers matcha pancakes in Australia. Your company dedicated three years to R&D to develop your matcha line. You sourced antioxidant-rich green tea leaves from the Kyoto Matcha Farm, which boasts nearly 400 years of history. You’ve combined this with quinoa and chia seeds that are rich in vitamins B and C while also restoring skin moisture. The list is endless, and you’ve added numerous superfoods to enhance your products. Can you walk us through the process of sourcing and partnering to obtain the ingredients you need? Are there any differences or similarities between sourcing ingredients from Japan and overseas? 

Firstly, our introduction of matcha products didn’t start its journey in Japan, rather it all started in America. We are now coming up to our 100th anniversary of this product introduction. With this in mind, it is important to talk about our supply chain. Choosing the correct supply chain is very important in order for our firm to combine certain ingredients correctly. In the domestic market, we are in a good position and have strong partners, and in particular, we have contacts with several raw material procurement companies. By combining our instant access to raw materials, we can introduce matcha-based products to different markets.

Back in the day, we didn’t have these privileges, and our only options were to go with local partners. Certain ingredients, such as acai, could only be procured this way. As you can understand, supplier selection and relationships are essential to smooth business operations under our particular model.

With your Kitao Matcha Range, you offer customers a comprehensive morning and evening routine designed to revitalize skin and keep it smooth, bright, and radiant. Uji Matcha is the key, and it is known here in Japan for its historical significance. For people who might not be familiar with Uji Matcha, can you tell us why Uji Matcha is so crucial on a medicinal level to the success of your Kitao Matcha Range?

Many have the wrong perception of green tea, and specifically, matcha is grown in one area and is different from naturally grown green tea. Therefore, I would like to separate green tea and matcha since they differ.

Even when defining matcha, there are many different segments and types. There are high, medium, and low-grade matcha powders, so when we talk about Uji Matcha, we are talking about high-grade matcha. The conditions have to be near-perfect.

A lot of conversations about cosmetics inevitably move onto skin types. The Fitzpatrick classification is one way to categorize skin types, defining Japanese, Korean, and Chinese skin types as type three or type four out of a total of six possible types. Pakistani and Indian skin types fall into category five and six. This classification doesn’t capture the complexities of Asian skin. Your firm has stood proudly on the side of diversity, arguing that global inclusiveness is vital to understanding and servicing global varied background lifestyles. How does your company channel multi-cultural synergy to better innovate, create, and serve a global audience?

We are facing obstacles to satisfying the needs of people of different nationalities and backgrounds. I think we need to return to a more simplistic mindset. When you look at things from that perspective, it is easy to see that Japanese companies excel at providing raw materials and creating magic with the essences they supply. Our mindset is dedicated to minimalism and keeping products simple yet highly effective.

Frequency is also important, and in order for customers to see significant results, it is key to build up daily routines. Our particular products follow simple steps; double-cleansing and moisturizing with lotion and cream. This keeps the daily process simple and easy to apply. Since many Americans suffer from dry skin, we try to introduce products in proper amounts for specific skin types. This is where training and education can become a part of our marketing strategy. 

In Korea, you will find products with more steps to achieve the same functions, and that is because multiple steps are incorporated as an inner layer within our products. As I mentioned, we export to over 15 countries worldwide, and we’ve never had any complaints.   

Kitao Cosmetics has had an international mindset dating back to the 1920s, and that remains as strong as ever. Your products are popular worldwide, from Youtubers to housewives. You’ve clearly dedicated yourselves to creating products that complement everyday life. Where is next for Kitao Cosmetics? Which markets have you earmarked for international expansion, and what strategies will you employ in order to do so?

To start, I wouldn’t define Asia as necessarily a primary market to target, and while this may be surprising to you, the reality is that this market is very hard for Japanese companies to penetrate. Our story is thankfully different from many companies that have tried and failed; however, our distribution network has been established in America and Europe rather than Asia. What this has resulted in are products that are very hard to market in Asia. The products, the story, and the sustainability are all targeted toward Western audiences, and the functions and appeal of the products don’t necessarily translate to Asia. People in the West appreciate the approach we have taken, and this is why we have found success in those markets. If I were to talk about future targets, I believe the best course of action would be to continue this expansion within America and Europe and have counterparts join us in penetrating these markets. We can only reach great results by combining efforts; going solo really doesn’t work.

I think the core reason a collaborative attack is necessary is the marketing power of Korea versus that of Japanese companies. K-pop and K-dramas have gained massive momentum, which itself is contributing to the overall power of Korean marketing. This attracts consumers to Korean products, so in order to counteract this wave, we want to combine collective efforts with other Japanese firms.

When we’ve attended recent cosmetic exhibitions, we've seen many Korean companies, and often, they are subsidized by government money. Finding a place in the market under the weight of such competition is difficult, so that is why I’m emphasizing collective efforts.

One particular product lineup I would like to highlight today is Japanese gaming character licensed cosmetics such as Kirby from Nintendo. BeeCruise is the company responsible, and they are our partner. They have created cosmetics products based on Kirby and more. And similar to ourselves, they have also had problems penetrating the US market. Since they are our partner, they collaborated with us and used our expertise. What we did was take their products to the US as an official distributor.   

For more information, visit: http://kitao.co.jp