Japan's Journey into Sunscreen and Conscious Beauty

Thanks to the spread of Korean culture, the Asian beauty landscape has been dominated by South Korea. Nonetheless, within these products, several active ingredients come from Japan. Companies such as Nihon Kolmar and Asanuma play a crucial role in the conception. There has also been a shift in the customers’ preference towards Japan’s “less is more” philosophy that emphasizes high-value products with more active ingredients. As a pioneer in the OEM industry, can you tell us what are the key factors that have allowed Japan to maintain its strong position in the global beauty industry, especially regarding innovation and the preference for high-quality standard products? 

The biggest factor is the reliability of Japanese products which lean heavily on quality assurance. The Japanese are very diligent and serious. This can be exemplified during situations such as earthquakes for example Chaos is avoided as the people remain disciplined. They queue up to receive their grants, for example. Japanese people show the same level of self-discipline even when they are not being watched. The reliability of Japanese products stems from the self-discipline and trustworthiness of Japanese people. This leads to the high-quality standards of products that Japan is known for. On the other hand, however, the Japanese are not very good at promotion.

When it comes to designing products, the Japanese mindset is to design simple yet highly functional products. That is a key part of the Japanese manufacturing culture. This is apparent for example in Japanese buildings. Japanese products are highly functional yet simple in design.

Japanese skin tends to be sensitive due to its thin surface layer. Japanese skincare is advanced in that sense when compared to haircare and other industries. Since Japanese people’s skin is sensitive, the texture and the order of the products are critical, as they need to match the skin. There has been intensive R&D in this field.

Japan’s population is aging, with one-third of people over the age of 65. By 2050, the population is expected to drop below 10 million people which will mean fewer business opportunities. Nonetheless, Japan’s anti-aging cosmetics industry is thriving. Last year more than USD 10 billion in revenue was generated in that field. Companies are capitalizing on the wishes of older consumers who want youthful skin. What strategies and innovations have Japanese companies employed to cater to the desires of these customers, contributing to the success of the anti-aging cosmetics market? What potential challenges or obstacles do you foresee within the field of anti-aging cosmetics, and how can they be overcome in the years to come?

The aging of the population is a grave issue for Japan. However, it is good for us as our target is the senior generation. We are conducting R&D to create products appropriate for aging skin, or skin that is losing moisture and oil content. How to effectively supplement moisture and oil from above the stratum corneum layer is the challenge that we are trying to overcome. We are currently testing the effectiveness of the new formulas that we have been creating.

The global beauty and personal care market is projected to reach around USD 646 billion by the end of 2024 and is expected to grow annually by 3% up to 2028. This growth can be explained by the rising awareness of self-care as it becomes more and more important for consumers worldwide. How do you foresee this growth impacting your business, and what will be the main growth drivers for the months to come?

We are an ODM/OEM manufacturer, so we already know the outcome of the next 12 months. We know what we will be producing in that time. Our counterparts are the sellers who are often manufacturers as well. It is not a matter of what we develop and create. Rather, it depends on the trends of our counterparts' product sales. Our focus is mainly on moisturizers and anti-aging cosmetics. For the upcoming 12 months, the two main elements we will be focusing on are high-level moisturizers and a moisturizing cream with anti-aging properties from an emerging cosmetics company. We foresee a 10% rise when compared to last year.

As an ODM/OEM company, you support many businesses from cosmetics firms and department stores to very specialized shops. Thanks to your very large range of solutions, you can divide your products between basic cosmetics, quasi-drugs, fragrances, and other beauty-related products. You already mentioned that your moisturizing products have the most growth potential, but are there any other products or services that you would like to add to your offerings in the coming years?

The area we would like to enter is the sunscreen field. Due to limitations when it comes to facilities, so far, we have been unable to produce suncare products. However, as part of our philosophy regarding skincare, we want to strengthen our product lineup since one of the factors that causes damage is UV light. Providing cosmetics that can protect the skin from damage done by UV light is very important. There is an engineer from this field who will join our company, and moving forward, we want to continue to strengthen in this area.

When it comes to anti-aging, the mind plays a critical role. Hormones change depending on how people are feeling. Fragrances help to maintain a healthy body. The concept of aromatherapy has been introduced in our new product lineup as it helps people to feel calmer and contributes to a healthy lifestyle.

We are also noticing a rise in the concept of conscious beauty which involves using more natural organic ingredients as well as less harmful ones to reach a more natural beauty far from the overconsumption of chemicals. Sustainability also plays an important role in this trend since its integration into product development is key to convincing the new type of audience that is sensitive to these kinds of trends. What is your opinion regarding this trend of conscious beauty products on a global scale, and will you develop products in line with this trend to cater to this more sensitive audience?

The global trend as you said is moving towards sustainability. It is more of a lifestyle change than a trend. In the future, “organic” and “natural” will be keywords in the cosmetics industry. However, there is too much of a focus on organic and natural products at the expense of functionality. Strengthening the functionality of the products and ensuring that they are safe is crucial. We want to combine this with the organic and natural elements of the products to create better and more sustainable products. That is our strategy for being environmentally friendly. The Japanese mindset is that the before and after results should be experienced by the person. The functionality of the products is therefore essential.

In the interview we did with Nihon Kolmar, the president explained that due to the unique nature of Asian skin, major Japanese cosmetics firms have developed more than 3,000 types of moisturizers. You already mentioned the unique characteristics of Asian skin. It ages slower due to a thick dermis but it also scars easily and is more sensitive as the stratum corneum is thinner in general. This contrasts with the skin of Westerners. How do you approach the development of raw materials for customization and what technologies or processes are employed to ensure the efficacy of specialized skincare products in general?

We do not have 3,000 different types of moisturizers, but we do have a wide product lineup that caters to the skin of the people. Our main focus is on Japanese skin, and we do not export many products. Therefore, we do not have much data on non-Japanese skin. When it comes to Japanese skin, we utilize our technology to make the particles very fine. This is used in our emulsion products for example. We have a laboratory to test the skin. We check before and after the application of the product to see how much active ingredients in the minute particles seep through the skin.

As a foreigner, I think that smell is a very powerful way to engrave memories in the minds of people. I personally always remember when I went to the Japanese Inn in Nikko and its very refreshing and appealing smell. Many stores use smell as a branding aspect of their marketing strategies. When you go to stores such as Abercrombie & Fitch, there is a powerful smell to remember their store. In Japan smell is more delicate and less intense than in Western countries. Your company provides many fragrances and all kinds of cosmetics and skincare. The smell is still an important aspect of the development. What is your thinking process when developing new cosmetics regarding the smell, and what effects or emotions are you trying to transmit or convey to your customers through the smell of your products?

When it comes to our process for fragrance development, we are not perfumers. There is a specialized company that does the combinations for the smells. At first, we determine what the age ranges are for the products. We also consider the situations and locations in which potential users may utilize the products. From there we come up with our original smell and ask the perfumer to create it. We then integrate the smell into the products and deliver them to the sellers.

When we interviewed other key players in the industry, they spoke about the importance of co-developing or collaborating with other companies to leverage on their expertise to enhance productivity and competitiveness in the global market. You mentioned earlier that you would like to enter the sunscreen field. Finding partners could be a chance for you in that regard. What role do partnerships or collaborations play within your business model, and are you searching for new partnerships or collaborations for the coming years?

Our business model relies heavily on partnerships. We have been constantly partnering with companies that do not possess the technologies or the resources that we do. We have our researchers and facilities. However, combining our specialties with the specialties of other companies including OEM manufacturers allows us to come up with new developments and new products. For example, when it comes to sunscreen, we already have a joint partnership. Also, about facemasks, we cannot make them. However, we can provide the moisturizer. This combination of technologies is what we constantly seek and promote.

In terms of overseas, we are open to sales partnerships. So far, we have had very few opportunities to go abroad. However, we want to continuously expand especially in the ASEAN region. While the Japanese domestic market is shrinking due to the population decline, the market in the ASEAN region is growing. That will be the next step for us.

Earlier you mentioned K-Beauty. The strength of K-Beauty is the strong governmental support for the export of Korean culture. However, J-Beauty has no governmental support. It is therefore important for Japanese companies to collaborate and strengthen the charm of J-Beauty through the development of new products. Some companies want to remain self-dependent. However, I believe that collaboration among Japanese companies will lead to a rise in the popularity of the J-Beauty industry.

There is a Japanese term “Kyoso Kyohei” which means co-creation and co-prosperity. That is one of our company’s core values.

It is interesting to hear you mention that you would like to target the ASEAN countries. We have noticed big trends such as Thailand’s "Swai Makeup" which is said to be the next boom, following Korean Ulzzang makeup and China's Chaiborg makeup. These trends are getting bigger and bigger. How can you adapt your products to cater to foreign audiences?

Working together with local partners is key. For example, there is a Japanese company with a longstanding history in Thailand. We have had contact with them. While it has not led to business yet, they will provide us with information on the local market trends, so that we can make products that cater to the needs of the consumers. There was hope for Japanese cosmetics in Thailand five or six years ago. However, the industry there is now centered on K-Beauty.

Your company this year is celebrating its 20^th anniversary. Imagine that we come back six years from now in 2030 and have this interview all over again. What would you like to tell us? What dreams and goals would you like to have achieved by then?

Our company philosophy is co-creation and co-flourishment. We aim to create new things together and flourish together sharing smiles. This does not confine us to the ODM/OEM cosmetics business. It expands to other products such as healthy foods and supplements as well as other services that we can provide. We want to contribute to the enhancement of people’s quality of life. We are currently not only involved in manufacturing, but we also collaborate with the local governments for regional revitalization in the areas where our factories are located. This includes working with local children. My hope is for one of these services that we provide to become a business pillar of ours. That would allow us to diversify our business and become widely known as a company that contributes to society. That is my dream for the future. 

For more details, explore their website at https://www.cs-lab.co.jp/