Shinnihonseiyaku: Pioneering Simplicity, Embracing Wellness

In the bustling landscape of the Japanese beauty and healthcare industry, Shinnihonseiyaku Co., Ltd. stands as a beacon of innovation, navigating the complex interplay of demographics, cultural nuances, and environmental consciousness. Led by the visionary Takahiro Goto, the President and CEO, the company is not merely crafting cosmetics and wellness products; it's sculpting a narrative that transcends borders and generations.

Embracing Change in a Shifting Demographic Landscape

Since 2014, Shinnihonseiyaku has been at the forefront of adapting to the changes characterized by one of Japan’s most pervasive issues—the declining and aging population coupled with a low birth rate. A seismic issue, it is the root of significant disruption – both in terms of challenges and opportunities – within various industries, particularly the cosmetics sector.
"Many firms within various industries share similar concerns stemming from these demographic challenges," says Mr. Goto, whose business has been a pivotal player in the cosmetics sector, navigating the shifting landscape by redirecting its focus from the domestic market to global arenas.

“The shifting demographics, particularly the aging population in Japan, have significantly altered the demand for cosmetics. The domestic market now calls for simpler and more basic cosmetic products. Over the next two decades, we can expect a growing population in their 60s, 70s and 80s, and with each generation, we anticipate the emergence of new beauty concepts.”

Going forward, the two key attributes of products catering to older consumers are simplicity and functionality, affirms Mr. Goto. However,  in view of the change in the current social situation, so-called 'Green Beauty' is poised to become the new trend for younger generations, while the demand for personalized cosmetics and healthcare continues to grow.

“Ninety percent of our sales are generated through e-commerce channels, both online and offline,” says Mr. Goto. “Furthermore, 70% of our customer base falls within the over-60 age group, showing a substantial and growing market segment that we are well-positioned to serve. Understanding and readily catering to the needs of these senior generations would be an important business strategy for us.”

And yet, the company has also designed a specific business model targeted at younger generations, emphasizing a simple and all-in-one cosmetic approach. “While we already enjoy substantial support from middle-aged seniors, there is an opportunity for us to further penetrate the younger generation market. This approach will enable a smooth transition from younger consumers to middle-aged seniors through our all-in-one cosmetic products,” says. Mr. Goto.

Shinnihonseiyaku is No. 1 in the world in terms of sales share of facial moisturizing gel market 

Environmental Sustainability: Pioneering the Green Beauty Standard

The Green Beauty trend in Japan refers to a growing movement within the global beauty and cosmetics industry that emphasizes sustainability, natural ingredients, and environmental consciousness. The trend reflects a shift in consumer preferences towards products that are not only effective but also eco-friendly and ethically sourced, with consumers increasingly looking for cosmetics that contain botanical extracts, plant-based oils, and other naturally derived components, avoiding synthetic and potentially harmful substances. Green Beauty also places a strong emphasis on reducing the environmental impact of product packaging, with brands today adopting eco-friendly packaging materials, minimizing excess packaging, and promoting recycling practices. Other tenets of Green Beauty include cruelty-free animal welfare, sustainability initiatives, transparent labelling, abiding to holistic wellness approaches and consumer education. As consumers become more environmentally conscious and socially aware, the Green Beauty trend is likely to continue evolving, influencing product development, marketing strategies, and consumer choices in the Japanese beauty and cosmetics market.

Amid the industry's widespread use of petroleum derivatives in cosmetics, Mr. Goto highlights the company's commitment to environmental sustainability. "We recognize the importance of reducing our environmental impact by transitioning from petroleum-based ingredients to plant-based alternatives," Mr. Goto asserts. The company today actively engages in collaborative research and development initiatives with partners and academic institutions to create petroleum-free ingredients. This dedication to sustainability positions Shinnihonseiyaku as a pioneer in the pursuit of the Green Beauty standard, resonating with an environmentally conscious consumer base.

Global Expansion and Marketing Strategies: The J-Beauty Advantage

As the Japanese cosmetics industry experiences a significant shift toward international markets, Mr. Goto admirably acknowledges the effectiveness of the global strategy of K-beauty (the universally popular beauty and cosmetics trends exported by South Korea). In doing so, he recognizes the need for Japanese companies to refine their strategies for exporting culture and products, articulating the fundamental distinction between J-beauty and K-beauty – simplicity versus complexity in skincare.

“I greatly admire and recognize the effectiveness of K-beauty; it’s a remarkable approach where they initially export their culture, and then the beauty industry follows suit. This can be seen as a national approach to global marketing. In contrast, the Japanese gaming industry, represented by iconic characters like Mario and Pokémon, enjoys global recognition. However, it’s relevant to mention that international local marketers often take the lead in penetrating markets for these products. This suggests that Japanese individuals and companies could benefit from learning more about effective strategies for exporting their culture and products.”

The Shinnihonseiyaku CEO sees this as an exciting moment for cultural export, leveraging Japan's domestic processing technology and manufacturing capabilities. "There is indeed a significant export opportunity for Japanese companies," he affirms. The company's current marketing strategy, focused on the middle-senior age group, aligns with the growing population in regions such as North America, Europe, and East Asia.

Challenges and Adaptation: Tailoring Products for Diverse Markets

The challenges of adapting Asian-focused products to diverse regions are a key focus for Shinnihonseiyaku, with Mr. Goto highlighting the company's commitment to tailoring and localizing products for each region.

“We are fully aware that the skincare needs in North America and Europe differ significantly from those in Asian markets due to variations in skin composition and climate conditions,” he says. “Skin texture and local climate are critical factors to consider. For instance, Japan experiences high humidity during the rainy season, which impacts skincare requirements. To meet these unique needs, we are committed to tailoring and localizing our products to each region while using the same crowned brand. Our strategy is not on a product-out basis but rather follows a market-in approach. This means that we prioritize understanding the specific skin care needs of each region and incorporate these insights into our product development. For instance, our product "Perfect One" will retain the brand name and continue to uphold the concept of providing simple skincare. Simultaneously, we will localize it to cater to the distinct requirements of each market and continue to make sincere efforts to improve it.”

Revolutionizing Beauty: The Murasaki Plant Derivative

Shinnihonseiyaku's journey into innovative ingredients is seen in the Murasaki plant derivative, valued for its healing properties. The company's mission to harness its active ingredient has resulted in a recent breakthrough – Murasaki fermented collagen. This achievement, a result of collaborative research with Hiroshima University, exemplifies the company's commitment to innovation and the integration of traditional knowledge with modern technology.

“Our journey traces back to 2006 when the Murasaki plant was endangered, and finding farmers cultivating it became very difficult,” explains Mr. Goto. “Traditionally, this plant has been valued for its healing properties, often referred to as shiunko, an ointment used to heal wounds. Recognizing the efficacy of the Murasaki plant in wound healing, our company has made it our mission to revive its cultivation and harness its active ingredient for various applications, including cosmetics, hair care and other health benefits. Over the years, through dedicated research and development efforts, we have successfully established a method for cultivating the Murasaki plant and extracting shikon essence from its roots.”

he company's commitment to open innovation such as this becomes even more evident as Mr. Goto discusses partnerships with academic institutions and companies. "We actively foster open innovation in our research and development efforts," he states. This network of partnerships, including foreign collaborations, positions Shinnihonseiyaku at the forefront of research and development.

Balancing Acts: Cosmetics and Healthcare for Well-Being

Mr. Goto also delves into the unique intersection of cosmetics and healthcare within the company. As Japan grapples with an overburdened healthcare system, the shift from treatment to prevention is today opening up opportunities for manufacturers. The president envisions a role for health supplements, vitamins, and quasi-drugs in preventing age-related health issues.

"We aim to contribute to creating a cycle of prevention by offering healthy products and dietary supplements," says Mr. Goto, identifying the eastern and western regions of Japan, East Asia, and Southeast Asia as primary areas of interest. “The simplicity of Japanese beauty routines presents a significant opportunity on a global scale.”

Presidential Vision: Shaping the Legacy for Future Generations

In a glimpse into the future, Mr. Goto shares his dream of attending the company's 100th-anniversary ceremony. His ambitious goal is to lay the foundation for overseas expansion in health and beauty sectors before stepping down from the presidency. The vision extends beyond personal achievement, with a desire to see Shinnihonseiyaku products being used globally: "When I do attend the 100th-anniversary ceremony, I hope to see our products being used worldwide," he says.

As Shinnihonseiyaku continues to shape the beauty and wellness landscape, it stands as a testament to innovation, sustainability, and a commitment to global excellence under the visionary leadership of Takahiro Goto. The journey towards the future of beauty is painted with the strokes of simplicity, environmental consciousness, and a dedication to well-being.