Japanese cosmetics brands sell at a discount thanks to Yen depreciation

By Chris BARKER

- Last updated on GMT

Japanese cosmetics brands sell at a discount thanks to Yen depreciation

Related tags: Japan

Japanese cosmetics stores will provide increased discounts on sales in Taiwan in response to the depreciation of the Yen, according to a report by the China Post.

A number of major cosmetics firms, including Kanebo, Shiseido, La Mer and SK-II will offer higher-than average discounts during the annual winter sale in Taiwan

The amounts offered off range from 5 to 34 per cent, with many giving discounts of over 20 per cent.   

Japanese companies had previously been pressured by the Chinese ministry of economic affairs to lower their prices in response to the yen's depreciation, but many only did so by a limited amount.  

The large discounts are described by the publication as being intended to build brand loyalty to Japanese companies

Discounts

Shinji Yamada, corporate PR manager at Kanebo, told CosmeticsDesign-Asia.com that the national holiday in Taiwan was a very important time for retailers and manufacturers in China due to the high level of consumer spending during this period.

According to department store owners, Kanebo will give a 20 per cent discount on its DEW series, whilst SK-II will move its top-selling set from 29 to 34 percent off.

Shiseido Company will also provide sets of make-up at prices approximately five per cent cheaper than last year.

Analysis

Dr Alain Khaiat, vice president of market research firm Seers Consulting, commented: "A devaluation of the money means that product imported from Japan will be slightly cheaper for the importing country. As such, Japanese products will be cheaper for the importers (which can be the subsidiary) in Taiwan or China." 

"I think the Chinese government call is aimed at making sure the improved cost (for importers) is passed on to consumers rather than to increase their margins."

Regarding Kanebo's decision to offer greater discounts, he said: "Coming after its, very publicized, recall, Kanebo needs to boost its image and competitive sales. Putting products in the hands of consumers by offering a lower price is trying to do this."​ 

Japanese devaluation

The Japanese government has introduced policies to devalue the Yen after 15 years of persistent deflation, vastly increasing the money supply which has causing the Yen to weaken to over 100 to a dollar for the first time in four years.

Yamada talked about the effects of the devaluation on Japanese cosmetics companies, pointed out that whilst decisions about discounts were made by their local distributers and retailers, the greater purchasing power of the Chinese public did appeal to Kanebo, which is focussing on building the strength of its brands.

The PR manager added: The depreciation of yen doesn’t affect our business in Taiwan, Hong Kong and the China Mainland.”

Related topics: Market Trends, East Asia, China

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