Growth boosters: Kao to focus on prestige beauty, makeup to drive beauty profits in Q2

By Amanda Lim

- Last updated on GMT

Kao has to focus on prestige beauty and makeup to drive growth. [Kanebo]
Kao has to focus on prestige beauty and makeup to drive growth. [Kanebo]

Related tags Kao Luxury Japan

Japanese consumer goods company Kao Corporation has outlined its plans to drive profit growth in its beauty business in the next quarter, including a focus on prestige beauty and makeup.

The company has expressed cautious optimism, noting the recovery of makeup and inbound demand in its home market.

“The cosmetics market, with the progress toward the end of mask-wearing, is seeing recovery in the makeup market,” ​said Masakazu Negoro, representative director, senior managing executive officer, Kao Corporation.

Negoro elaborated that the lipstick market was now back up to 60% of 2019 levels, while the makeup base category was now back to around 80%.

He added: “If you look at the inbound demand, Chinese visitors to Japan is still 11% of 2019. However, inbound demand at department stores is on the rise.”

Moving forward, Kao’s priority for its cosmetics portfolio is its prestige brands such as Kanebo, which has undergone a rebranding in the last few years.

“Kanebo is showing good results after rebranding with hits like the UV serum and cream foundation products launched last year, Kanebo is seeing an increase in customers. The lotion that we launched last year is further enhancing that trend,”​ said Negoro.

He also highlighted Lunasol, which achieved the number one position in prestige eyeshadow and increased inbound demand, as well as RMK, which strengthened its makeup base line up.

Strengthening makeup

Furthermore, the company is aiming to capitalise on the rebound of makeup in Japan as authorities downgraded COVID-19 to a Class 5 disease – the same level as seasonal influenza.

One of the firm’s biggest priorities is to increase the production of KATE’s Lip Monster, a lipstick launched in 2021 that Kao has struggled to keep in stock due to its popularity.

The constant buzz surrounding Lip Monster with the release of limited-edition colours, product extensions, cosmetic awards, and its limited availability have cemented its position as a top product in Japan.

“For Lip Monster, because of a shortage in stock, we caused inconveniences to our customers. However, we will increase production capacity by 50%,”​ said Negoro.

Additionally, the company said it would reinforce the makeup base lineup for colour cosmetics brand Primavista.

Keeping the hits going

This Spring, Bioré has rolled out two hit products, including the UV Aqua Rich Aqua Protect Mist, which has gained momentum on the back of increasing sun care demand.

“In Japan, there are more opportunities to go out and we saw an increase in your near of two digits in UV care products,”​ said Negoro.

“Currently, the sunscreen market is growing over 40% and Bioré grew by over 80%. Its share is expanding as well. In particular, Bioré’s UV mist is a big hit as a single product. It is number one in the market in terms of sales.”

The brand also launched The Cleanse Oil Makeup Remover, which is based on its latest makeup-removing technology that lifts makeup residue from the skin without the need to rub and pull on the skin.

“Bioré’s new oil makeup remover achieved the annual target in the second week since launch in the entire category of market removers. We are expecting double-digit growth from the previous year,”​ said Negoro.

Additionally, the company also launched Essential Barrier Shampoo, which captured double the targeted market share at multiple major drugstores.

“We will continue to launch and develop high value adding and new or improved products to expand profits,” ​said Negoro.

For its overseas business, Kao is aiming for double-digit sales growth in China on the back of the rebranding of freeplus.

“In China, because of the freeplus rebranding and strengthening of evidence-based marketing we will target double-digit growth,”​ said Negoro.

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