Look Foward with Your Own Beauty

J-Beauty brands have traditionally faced competition from Korean and Western brands that have utilized their strong marketing capabilities. However, if we look behind this, many of the active ingredients used within their products originate from Japan. We are also seeing a shift in consumer preferences towards clean beauty, with people now being more conscious of what they use for their bodies and faces. How would you describe the main advantages of the J-Beauty industry, and what sets it apart from its regional competitors?

One of the advantages and characteristics of J-Beauty brands is that traditionally, J-Beauty has been renowned for its high quality and high safety standards. This is due to the stringent regulations that J-Beauty has to adhere to. The reason for these high safety standards is that around 30 years ago, cosmetics pollution affected people’s health. Also, Japanese people naturally are perfectionists and have a high demand for quality and useability. These high demands from consumers have pushed Japanese companies to provide high-quality products.

One of the challenges that the Japanese beauty industry is facing is Japan’s demographic decline. It is estimated that very soon, over one-third of the population will be over the age of 65 years. This poses challenges not only when it comes to hiring staff but it also means that there is a declining domestic market. However, this has also provided the opportunity for Japanese companies to create products that cater to the elderly people who traditionally have tended to have greater spending power. For your business in particular, what are some of the main challenges and opportunities that Japan’s demographic decline is posing?

It is true that the aging population and reduction in the number of children being born in Japan are leading to manpower shortages and the shrinkage of the domestic market. This has become a grave issue in Japan. Overall, the economic power of Japan is dwindling, and the purchasing capabilities of the Japanese people are being reduced. Having said that, the essence of human beings, and women in particular, is that they want to stay beautiful for as long as they are alive. The lifespans of people have been extended in Japan. Now, it is being said that 100 years could be a normal lifespan. This increase in healthy lifespans is a good thing for us since the purchasing period of our products by women has been extended. We see new business opportunities in this area.

In the near future, there will be two extremes in the cosmetics market. People will either go for more expensive high-end cosmetics or choose the least expensive cosmetics. The ones in the middle will not be able to survive, so we need to strategize and find the right market for ourselves as a Japanese company.

Another trend that we are now seeing with many large companies is the utilization of big data, be it AI or apps, as a way to customize the skincare that people are using. We have seen new apps that can analyze a person’s skin and make a recommendation for the products they should use. This is something that your company also provides with your iPas skin analysis machine that analyzes the skin of your customers. What role do you see this utilization of technology playing in your business and your products going forward?

At this moment, only a fraction of the companies are providing digital tools as a means for the customers to make a decision. However, in the next five to ten years, digital tools will surely be mainstream. Currently, information and cosmetics are overflowing in society. It is, therefore, hard for customers to know exactly what would happen if they used or did not use a specific product. Clearly showing these impacts through the use of digital tools helps the customers make their decisions.

When we developed our iPas solution, I was very particular in making it a cloud-based solution. There are digital tools similar to iPas, but they are all offline. Making it an online tool and constantly updating the versions like the iPhone is very important. The surface of the skin is measured numerically by iPas. However, our understanding is that there is a strong interconnectivity between the exterior and interior conditions of the body. We are now collaborating with a startup in Kobe to visualize and numericize both the exterior and interior state of a person’s body. Our utmost goal is to visualize and numericize people's happiness. This will include measuring a person’s mental state in numbers.

Beauty is a comprehensive concept that can only be achieved by having balanced internal conditions and a relaxed and happy mental state. Exterior beauty is also a factor. It is very difficult to measure happiness numerically. However, we are challenging ourselves by numericizing people's aesthetics.

We consider beauty to be three-dimensional. The first is the surface. The second is inner beauty, and the third is mental healthiness. These three pillars are each important for total beauty. That is what we want to achieve and something that we always seek. A skincare products supplier in France has launched iPas at more than 50 of their local stores. They facilitate iPas in finding out the skin conditions of their end users. Based on the results, they recommend their own products. Unfortunately, they do not sell our products, but they do use our iPas skin analysis machine.

Do you have plans in the future to look at other global beauty brands to utilize your technology as well?

Yes, we are open to working with other companies as well. We welcome and are always willing to partner with other companies. I am 46 years old. When I used iPas, my skin age was 65 years old.

Your company was founded in 1984. Over the years, you have introduced many core products. Your three pillars also include your AEA-certified Aesthetic College, which is a real strength. How would you define the core strengths that set your company apart from your competitors both here in Japan and overseas?

The uniqueness of our company is that we see beauty comprehensively in three dimensions. As I explained earlier, exterior, interior, and mental beauty are all combined in a good balance. Our target is to become a beauty wellness company. Providing a more holistic approach to beauty is our core concept. We have three lines of business. The first is our cosmetics operation. The second is our directly run salon business, which is named Apple Mind, and the third is our academy. The reason why we started our academy was to provide education to our in-house staff. At the same time, since the barrier to entry into the Japanese cosmetics industry is quite low, many people are entering the business whose technical capabilities are not adequate to provide services to the customers. We want to elevate the overall level and services of the aesthetics industry and uplift the positions of aestheticians in society. That is our goal. To do so, we are providing our accumulated experience and know-how to our clients and anyone interested in learning with us.

Japanese companies, as a whole, are renowned for investing in the research and development of their products. For example, your company uses ostrich egg yolks in some of your products. Could you tell us about your R&D strategy, and are there any new products or technologies that you are currently working on that you would like to share with our readers?

Our R&D is very confidential, so I cannot say too much. We are currently allocating our resources to the development of supplements for inner beauty. We have 40 different variations of policy cosmetics brand lines. Together with that, we want to augment our inner beauty segment.

We have an exclusive factory for our R&D and product development, where we work closely with the engineers to develop new types of products. The recent trend has been reducing the time to see the impact of a product. However, that sometimes may cause safety issues. Safety is always our priority when it comes to development. With safety in mind, we develop our products to cater to the needs of our customers.

When you speak about reducing time and seeing quick results, are you talking about your Narone Cosmetics? Or does this also apply to your Policy Cosmetics?

Our Narone and Policy brands are totally different. When it comes to our Policy brand, we do not pursue quick results. Rather, we want to grow the skin. A recent cosmetics trend has been to pursue timesaving when you apply cosmetics on the surface of the skin. Many people want to see quick results. However, that may lead to some side effects. We do not pursue that at all. Rather, we say to our customers that we will grow their skin together with them. Effectiveness comes slowly. However, it does not have any side effects.

Narone, on the other hand, is mainly for acne control. We use ostrich egg yolk extract. Narone tries to control the number of acne bacteria, which is a different concept from our Policy Cosmetics, where our number one goal is to grow the skin.

When it comes to applying something on your skin that will benefit it and taking a supplement to help your skin from within, how do your Policy Cosmetics and your supplements interact with each other?

We are currently in the process of gathering evidence to convince the consumers. We cannot numerically explain why you should take such supplements for this type of effect. As the president mentioned earlier, we have a tie-up with a startup in Kobe to prove and show the scientific impact of such intakes.

If you take our Mulberry Leaf Beauty, for example, it contains a very special ingredient that helps your sugar control. It also provides you with more skin-moisturizing lactic acid. It, therefore, has a very special and specific ingredient for effectiveness. That is exactly what our Policy Cosmetics are pursuing. All of our supplements include very specific effective ingredients. That is how they are related to our Policy Cosmetics policy. The concepts of our supplements are linked to our cosmetics.

Your company not only focuses on the domestic market, but you also export your products overseas. Furthermore, you opened a local entity in China in 2021. Which particular markets or regions are the most popular for your products, and do you have any plans in the future to broaden your international reach, be it for sales or opening a new local office overseas?

Aside from the Chinese market, our focus is on Asia. Rather than promoting our specific products, we want to determine the needs of the local users so we can provide the most adequate solutions. The demand for cosmetics is different in each country.

We know that people’s skin is different around the globe. How is your company able to provide cosmetics that can cater to these different skin types?

Our strategy is to gather local end users in the location and ask them to try out our products. This, of course, depends on the country and the age of the end users. The requirements are different in each country. We want to identify the needs of the local customers before we can meet the requirements and address the specific needs. When it comes to sales, we must consider how we distribute our products.

The market for our products is aesthetic salons, which is a very closed market. There is a need for further consultation when using our products. That is where our iPas come in. It allows us to identify the skin condition of each individual person so we can introduce them to the most appropriate cosmetics. This, however, can sometimes be difficult in overseas locations such as Vietnam or Malaysia due to cultural background differences and differing needs. That is why we must identify which country suits our sales and business style. One way to do so is through finding the right partners. That is a key factor. We would like to ship our products to the location and leave it to the local dealers. However, of course, it is not an easy process, and it can take time to find the most suitable and reliable partners.

Out of all the countries in Asia, which country do you believe has the most growth potential for your company?

Right now, everybody is talking about Vietnam. However, the buying power of the local Vietnamese people is different from Japan location situation, especially for Japan high-end cosmetics.

Singapore, on the other hand, is a country in which it would be relatively easy to sell our products. It could also be possible in Malaysia. However, another factor that we must consider is the local regulations. For example, in Malaysia, some people are sensitive about halal material. Our products are based on the skin conditions of each individual person. That is our policy. We ensure this by providing consultative sales to our customers.

Your company is celebrating 40 years of history this year since your foundation in 1984. Please imagine that we will come back five years from now for your 45th anniversary, and we will have this interview all over again. What would you like to tell us? What dreams and goals would you like to have achieved over the next five years, and how would you like your company to be seen in the eyes of the global market?

Our concept of beauty is comprehensive and includes both inner and outer beauty. We also care about people’s health. Our vision for the future is to become a beauty wellness company. In the next five years, I hope to achieve at least half of the milestones required for this vision to be realized.

For more information, visit their website at: https://www.nihonbeauty.co.jp/