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.