PDC Corporation: Blending Tradition, Innovation, and Sustainability in J-Beauty

J-Beauty companies face intense competition not only from Western brands but also from regional players like K-Beauty, which have gained global recognition through strong marketing strategies. However, industry insiders know that many of the ingredients used by international beauty brands actually originate in Japan. At the same time, consumer preferences are shifting toward a less is more approach, a philosophy that aligns well with J-Beauty’s emphasis on simplicity, high-quality formulations, and long-term skincare benefits. How would you define the key strengths of the J-Beauty industry, and how does it compare to its regional competitors?

In addition to my role here, I also oversee Rosette Cosmetics, which has an R&D facility I believe that one of Japan’s greatest strengths in the beauty industry lies in its deep commitment to fundamental research. The efficacy and effectiveness of ingredients are often validated through close collaboration with academia. For example, we work with universities on research projects, and our findings are presented at academic conferences. These conferences not only help validate our discoveries but also provide opportunities to identify new ingredients and innovations. In fact, some universities in Japan have even established dedicated cosmetics departments as part of their research programs. This close relationship between manufacturers and academia is a defining strength of J-Beauty, ensuring that our products are backed by rigorous scientific research and ingredient analysis.

Another example of Japan’s innovative approach is the incorporation of ingredients from other industries. A well-known case is Fuji Film, which has successfully adapted materials originally developed for photography into skincare applications. Similarly, we are exploring ways to repurpose active ingredients from other industries for use in cosmetics, leveraging Japan’s cross-industry innovation.

Japanese cosmetics are also distinguished by their meticulous manufacturing processes and attention to detail in packaging design. Usability is a major focus. A great example is Kao, which has its own packaging development division and created a spill-proof refill pouch that prevents liquid from dripping when refilling a bottle. Inspired by this approach, p d c also adopted our own refill pouch with a built-in straw, making it easier for users to transfer product into empty bottles.

This dedication to research, cross-industry innovation, and user-friendly design is what sets J-Beauty apart from its competitors and continues to drive its global reputation for quality and efficacy.

Japan is facing a significant challenge with population decline and an aging society. In just 20 years, more than one-third of the population is expected to be over the age of 65. This demographic shift is not only shrinking the domestic market but also making it increasingly difficult to hire and retain talent. How is your company adapting to these challenges? To what extent do you think Japanese companies need to look overseas to secure new markets and talent?

The Japanese market is inevitably shrinking due to the country’s declining population. However, we firmly believe that the anti-aging product market will continue to grow domestically. At the same time, there are significant opportunities in large overseas markets, and we are actively looking to expand internationally to capture market share. We hope this interview helps convey that message to global audiences.

Given that our company has a relatively small team of around 70 employees, we cannot directly cover the overseas market on our own. That’s why we seek strong distribution partners abroad—not just as buyers of our products, but as strategic partners who can collaborate with us to develop effective marketing strategies. Our goal is to work closely with these partners to successfully establish our presence in new markets.

You have already expanded into China, but are there other specific markets where you are focusing on finding new partners and customers for your products? Which regions do you see as the most promising for your international growth strategy?

We recently established partnerships in Hong Kong and are now looking at Vietnam and Taiwan as promising markets for further expansion. However, before securing these partnerships, we began preparing for international growth years ago. As part of that strategy, we have already acquired trademark registrations in 10 to 15 countries and regions, ensuring that we are well-positioned to enter new markets when the right opportunities arise.

The cosmetics industry is increasingly focusing on sustainability and natural ingredients as consumers become more conscious of the chemicals in their products. This is an area where your brand has long been strong, incorporating local, natural ingredients into your formulations. How is this industry-wide shift toward sustainable ingredients influencing your product development and design? Are there any specific initiatives or innovations you are implementing to align with this trend?

We are highly aware of the growing sustainability mindset among consumers, and as a result, we take great care in sourcing our ingredients and materials. Beyond simply selecting high-quality natural ingredients, we ensure that all components are fully traceable. This commitment to traceability enhances both the safety and reliability of our products, providing consumers with greater confidence in what they are using.

Sustainability has been a core part of our philosophy for a long time. For example, we have offered refill pouch products for years, reducing the need for single-use bottles and containers in skincare. This kind of environmentally conscious packaging is still relatively uncommon in many Southeast Asian countries, but for us, it has long been a standard practice. Our focus on sustainability is not a reaction to recent trends—it is something deeply embedded in how we develop and design our products.

E-commerce and online product promotion have become increasingly important in the cosmetics industry, with social media playing a major role in driving brand awareness and consumer engagement. Your 「 Pmel (Pimel) 」 mascara, for example, has successfully leveraged partnerships with influencers on TikTok and other social media platforms. Looking ahead, and especially with your overseas expansion in mind, what role do you see e-commerce and social media collaborations playing in your strategy? How do you plan to use these digital channels to strengthen your presence in new markets?

Social media is essential for our overseas expansion, as our products do not rely on in-person counseling or face-to-face promotion. Instead, they are self-selected by customers, making digital marketing crucial for spreading awareness and helping consumers understand the benefits of our beauty products.

We began partnering with social media influencers five years ago, at a time when very few companies were doing so. Now, of course, nearly all competitors have adopted the same strategy, and consumers are constantly flooded with information. Despite this saturation, social media remains a fundamental tool for communication and brand engagement.

At the same time, while digital channels are vital, we recognize the importance of increasing our presence on e-commerce platforms as well as in offline retail stores. Striking the right balance between online and offline exposure will be key to our continued growth, both in Japan and internationally.

Your company was founded in 1992, and over the past 33 years, you have grown into a brand known for its unique approach to product development, particularly through the use of natural ingredients like sake lees and matcha. Could you share some of the key milestones in your company’s history that have shaped its growth? Additionally, how would you define the core strengths that set your brand apart in the highly competitive beauty industry?

The inspiration behind our 「Wafood Made」 product line came from the widely held belief that sake brewers have clear and bright skin due to prolonged exposure to sake lees and koji. Sake breweries have long been an integral part of Japanese culture, and we wanted to incorporate that tradition into our products—not only through the ingredients but also in the brand identity. The growing global interest in sake has also helped us promote our sake lees-based skincare products to a broader audience.

Another key strength of our company is our creative marketing team, which plays a major role in setting us apart. They excel at developing unique and memorable product names that resonate with consumers. For example, our「Pmel (Pimel)」Perfect Long and Curl Mascara is marketed under the name. #Usotsuki Mascara—usotsuki means “liar” in Japanese, referencing the dramatic, lush lashes it creates, even for those with naturally sparse eyelashes. This kind of branding adds personality to our products and helps them stand out in the competitive beauty market.

Pmel Usotsuki Mascara

We also have a longstanding product line called 「Pure Natural」, which has been on the market since 1992. It features both a lotion and milk lotion in one, allowing users to combine two skincare steps into a single application. This not only makes skincare routines more convenient but also ensures high effectiveness.

At our core, we always prioritize both convenience and performance. Our goal is to create products that simplify our customers' beauty routines without compromising on quality or results.

One of your flagship products is「DERMAAID」, which was launched last year as Japan’s first quasi-drug skincare line containing three types of active ingredients. Can you share how you developed this product? What were some of the key challenges you faced in becoming Japan’s first quasi-drug skincare line, and how did you overcome them?

Many quasi-drug products on the market contain just one certified active ingredient, yet their packaging often claims broad effectiveness. What sets「DERMAAID」apart is that it contains three active ingredients, each of which has been individually certified by the Ministry of Health as a quasi-drug.

One of the biggest challenges we faced in developing this product was formulation balance. When a product contains only one certified active ingredient, the remaining ingredients can only be included in small amounts. However, since we use three active ingredients, we had to carefully adhere to the Ministry of Health’s strict regulations on ingredient percentages to ensure we could make multiple efficacy claims while still maintaining an optimal formula.

While closely following these regulatory guidelines, we also needed to include additional ingredients to enhance the product’s overall effectiveness. Striking this perfect balance—ensuring the formula was both scientifically sound and highly functional—was the most difficult aspect of development. However, by overcoming these challenges, we were able to create Japan’s first quasi-drug skincare line specifically designed to protect against environmental damage, setting a new standard in the industry.

DERMAAID product(s)

Your business is divided into two key areas: skincare and makeup. Looking ahead, which of these two segments do you see as having the most growth potential, and which are you planning to strengthen? Additionally, what are the main synergies between the two, and how do they complement each other within your overall business strategy?

The simple answer is both—we need both skincare and cosmetics. Our company’s philosophy is to promote healthy skin and a healthy mind. Skincare helps improve the health of the skin, while makeup enhances confidence and well-being, which is why we pursue both segments.

That said, our focus depends on the market. For example, if we aim to expand into the U.S., the makeup business will take priority, as it aligns better with consumer demand there. However, different markets require different strategies. In some countries, daily routines vary—for instance, regions where people primarily take showers rather than baths have different skincare needs compared to Japan.

Other factors, such as dominant skin types, climate, and UV exposure levels, also influence product demand. Understanding these regional differences allows us to tailor our approach and develop the right products for each market while maintaining the synergy between skincare and cosmetics in our overall business strategy.

Your company already operates overseas, and as you mentioned, skincare needs vary across different countries due to factors like climate, skin type, and lifestyle habits. Do you see yourself developing market-specific products tailored to the needs of consumers in different regions? If so, what factors will influence your approach to product development in these markets?

Yes, we are actively planning to develop products tailored to the specific needs of different markets. To achieve this, we have started purchasing point-of-sale data from Don Quijote by nationality, which allows us to analyze purchasing trends among international tourists. For example, we can track which products are most popular among Chinese visitors and conduct similar analyses for customers from the U.S., South Korea, Taiwan, and other key markets.

By leveraging this data, we aim to identify the most suitable product categories and formulations for each region, ensuring that we align our offerings with local consumer preferences and skincare needs. This data-driven approach helps us make informed decisions as we expand our presence in international markets.

In 2016, your company became part of the Yamada Bee Group, a company specializing in honeybee-derived products. Now, nearly a decade later, how has this partnership benefited your business and product development? Have there been any key synergies or innovations that have emerged as a result of joining the group?

So far, there hasn’t been significant synergy between our businesses in terms of products, but we have been in discussions with the president of Yamada Bee and other group companies, and we’ve now reached an important milestone. It has been decided that Yamada Bee will allow us to use some of their proprietary ingredients, which they have discovered through extensive research.

Yamada Bee Group has developed numerous patented technologies using honeybee-derived ingredients, and they have a strong foundation in scientific research, with published studies to support their findings. They are now allowing us to incorporate this knowledge into our business, and our marketing team is beginning to plan new products that will feature Yamada’s specialized ingredients.

Initially, we were unsure how well we would integrate with Yamada Bee, as they are very particular about protecting their corporate image and brand perception. However, over time, we have developed a strong working relationship, and now, they are fully supportive of us using their ingredients. As a result, we have already started R&D discussions within our company to develop new skincare products utilizing their unique formulations.

Beyond Yamada Bee, we have also initiated a collaboration with Rosette. Since we share many of the same wholesalers and retailers, we are now working together to streamline logistical operations. Additionally, we are jointly researching regulations and formulations for the specific countries where we plan to expand. These partnerships are helping us strengthen our product development and accelerate our international growth strategy.

What are some of those countries?

Southeast Asian and other Asian countries have largely developed their cosmetic regulations based on EU standards, so our initial focus has been on studying and understanding those frameworks. Once we have a strong grasp of these regulations, we will then move on to analyzing country-specific requirements, such as those in Taiwan and China.

For now, FDA regulations remain a separate issue that we are not prioritizing at this stage. Our approach is to first navigate the markets where the regulatory structures align more closely with what we are already familiar with before expanding into regions with more complex approval processes.

Your company is celebrating its 33rd anniversary this year. If we were to return in two years for another interview, what goals or ambitions would you like to achieve by then? Additionally, how do you want your company to be perceived in the global market as you continue to expand?

In two years, our goal is to become a more customer-centric company. While achieving this vision will take time, it is a necessary shift for our future growth.

Japan’s beauty and cosmetics industry is highly competitive, with many major players. At the same time, drugstore industry consolidation has created an environment where a single drugstore chain can operate thousands of outlets. This means that securing partnerships with these chains is critical—if we fail to win a deal with one, we lose a significant supply opportunity. Scale is essential in this business, and we must carefully strategize how to achieve it.

Recognizing this challenge, we made the decision to shift our focus to marketing starting this year. Until now, we have been primarily a product-oriented company, but moving forward, we aim to become a market-oriented company. This shift in mindset is something we want every employee in our organization to embrace.

To support this transition, we plan to leverage the POS data we collect—particularly data that tracks consumer purchase behavior, including cases where customers switch from our brand to a competitor’s. By analyzing these patterns, we can better understand why consumers make these choices and make necessary improvements to retain them.

By combining data-driven insights with a more marketing-focused approach, we aim to evolve into a company that not only creates high-quality products but also deeply understands and responds to the needs of global consumers.

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To read more about PDC Corporation, check out this article about them.