Retail in Asia


Japan make-up market to expand by just 0.1 percent through 2026: GlobalData

The make-up market in Japan is expected to inch forward by only a compound annual growth rate (CAGR) of 0.1 percent to reach JPY 531.8 billion (USD 5.5 billion) through 2026, with the emergence of new Covid-19 variants and surging inflation constraining consumer spending on colour cosmetics, according to a new GlobalData report.

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While easing pandemic control measures, particularly the mandate on masks, and a growing interest in natural cosmetics are expected to sustain the demand for make-up in Japan in the immediate future, stifled consumer sentiment held back by inflation looks to slow local demand for make-up in the next three years.

“The Covid-19 related lockdowns and strict restrictions stifled consumer movement, leaving a significant impact on the sales of make-up products in 2021. However, the lifting of restrictions in H2 2022 and the subsequent resumption of out-of-home activities and social gatherings gradually revived sales,” saidSuneera Joseph, Consumer Analyst at GlobalData.

“Eye make-up sales rose as consumers continued to use face masks in indoor environments and outdoor. Online sales of cosmetics also surged as more companies started developing and augmenting their direct-to-consumer (D2C) platforms. Moreover, market leaders leveraged augmented reality (AR) apps to provide a personalized shopping experience for digitally-savvy consumers.”

The per capita expenditure (PCE) on make-up in Japan increased from USD 14.7 in 2016 to USD 19 in 2021, surpassing the regional average of USD 2.4 and the global average of USD 3.9. Japan’s PCE on make-up will surge to USD 22.1 by 2026, the report added.

By company, Kao Corporation, Shiseido Company, and L’Oréal S.A. were the top three companies in the Japanese make-up sector in 2021, and Shiseido and Kose were the leading brands.

By channel, parapharmacies and drugstores were the leading distribution channels in 2021, followed by e-retailers, and hypermarkets and supermarkets.

Looking ahead, Japan’s eye make-up category will register the fastest value CAGR over 2021–26, followed by the lip make-up category.

The demand for novel colour cosmetics will also accelerate in Japan over the forecast period, as the economic and social activities normalise.

Furthermore, natural and organic beauty products set to gain traction due to rising consumer concerns about the long-term harm caused by chemical formulations with petroleum-based chemical additives, allergens, and pesticides.

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“The renewed focus on holistic health and wellness in light of the pandemic has accentuated the trend towards free-from make-up. Going forward, the improving consumer sentiment and the launch of innovative natural and safe formulations will lend impetus to the Japanese make-up market. However, spiralling inflation and emergence of new Covid-19 variants can derail overall consumer spending on colour cosmetics,” concluded Joseph.