Japanese luxury cosmetics segment seeing success

Consumers in the region are reported to have continued to shell out on luxuries like anti-aging creams despite the economic downturn.

According to Reuters; Shiseido, Kao and Kose Corp have all launched creams worth around $1,300 as far back as 2008 and plan to now develop more luxury focused ranges instead of the mid-priced products they traditionally dealt in as a result of the profits from these investments.

"We are surprised by the strong sales of the cream, as well as our other items priced over 5,000 yen,​" it reports Kao president Motoki Ozaki as stating.

It's all about targeting the right age group..​

On the back of this success Daiwa Securities analyst Katsuro Hirozumi tells the publication that it will now be crucial for these brands to offer value-added products for women in these age groups, who make up a big part of Japan's population and have the money to spend.

Market researcher Fuji Keizai forecasts high-price cosmetics to rise to 598 billion yen by next year, with its share of the shrinking overall cosmetics market rising to 27%.

An analyst from the firm Tomoyuki Yamazumi points out that demand for luxury products in Japan is not like the Western markets, where a certain class of people tend to afford to spend on these type of products. ​"It's ordinary women in their 40s and older," ​he says.

Reuters says these generations acquired a taste and eye for quality beauty-care during the economic bubble.

"They now have more money to spend (due to Japan's seniority-based salary system), and even if they have to cut spending, these smart shoppers will spend less on other items to buy a few of the best cosmetics products,"​ it reports. ​

According to Shiseido, a rise in the number of women with a household income of over 20 million yen led the sales of cosmetics and products in its range priced 5,000 yen or higher account for roughly 20% of total Japanese cosmetics business sales at the brand.