On December 8th, the New Retail Conference of 2021 China Cosmetics Annual Conference co-organized by Pinguan and CiE took place at Langham Place Guangzhou. At the conference, MoldBreaking Inc. founder Guo Xiruo shared his insights on the latest trend and significance of beauty brands expanding into overseas markets.
Waves of Chinese companies venturing overseas have spanned decades, from electronics, to tech companies, to gaming. Guo points out that the latest wave is cosmetics brands' ventures, especially into the Japanese market.
Although Japanese market is generally deemed to be closed off, Guo believes that the time has ripened for Chinese brands to expand into Japan. Following consumption upgrade, development of industry chain, segmentation of sales channels, and product upgrade, Chinese cosmetics are gaining competitiveness against global brands. For the past two years, over a dozen of Chinese brands including Perfect Diary, Florasis, Flower Knows, and Zeesea have initiated moving into overseas markets, with Japan being an important target market.
2020 is known as the "first year" for Chinese cosmetics going global; 2021 can be said to be the "first year" for Chinese cosmetics going to Japan.
In Japan, Opportunities Await Beauty Brands
Import volume of cosmetics to Japan has been climbing since 2016. Impacted by the pandemic, 2020 saw the first drop in recent years — 12.2%, putting the import volume at 248,020 million Yen. In 2021 as the pandemic eases, import volume from January to September saw 10.6% growth compared to last year, reaching 203,160 million Yen. Among the main countries, import volume from France, United States and Thailand decreased, while China, Korea, and Vietnam increased.
Over the past years, the Third Korean Wave has swept Japanese youth. Fed by the popularity of Korean dramas and idol groups, Korean cuisine and cosmetics are now riding the Hanryu in Japan. Despite the pandemic, export value of Korean cosmetics to Japan grew 58.7% according to statistics from the Korean Customs Service. The Cosmetic Importers Association of Japan data show that growth continues in 2021, where Korean cosmetics import value further increased 10.6% from January to September compared to same period last year. The rapid growth of Korean cosmetics in Japan is a positive signifier for Chinese cosmetics.
As the global influence of "China-Chic" expands and made-in-China cosmetics rise, Chinese-style makeup has been booming in Japan. Termed "Chiborg", the makeup style attracted the attention of Japanese makeup influencers and fashion magazines, becoming a top trend in 2020. The innovative design and features that Chinese cosmetics offer give them a competitive edge in terms of usability and value. Chinese brands' management operations, and understanding of marketing and e-commerce, also make them well-equipped when entering Japan.
Chinese Cosmetics Accelerating Japan Entry
The Chinese cosmetics brands with a presence in Japan have been capitalizing on their distinct China chic-ness, setting up online stores, and actively expanding into varying online and offline sales channels. This year, FlowerKnows joined hands with MoldBreaking to collaborate with Miyawaki Sakura, the first international celebrity as their brand ambassador, and enacted a large-scale marketing campaign targeting cosmetics consumers in Japan. In addition to influencer marketing, collaborations with Gen Z-centric platform TikTok and fashion magazine ViVi, OOH mega-screen advert placements, and offline store exposure successfully raised the brand awareness and influence of FlowerKnows. Florasis went on Amazon Japan in March, Perfect Diary opened its Qoo10 store in November, and INTO YOU is in the phase of channel development. Next year, Chinese cosmetics will likely continue to increase efforts and brand influence in the Japanese market.
Chinese brands have much potential in Japan, Guo believes. Many beauty brands have developed their distinct innovative model after years of building brand and product value. In the Japanese market, the market share of Chinese cosmetics will expand as the brands further localize marketing and sales channels while new players increase. The trend of cosmetics landing in Japan will be a long-term one. Dedicated to helping Chinese beauty brands entering Japan, MoldBreaking is prepared to face challenges and grab opportunities alongside brands, and smooth the landing process through one-stop solution.
According to data from Alibaba Group, in April 2020, the GMV of Chinese cosmetics brands exceeded that of international brands for the first time. In the future, international market share will be an important factor for Chinese brands to generate growth. MoldBreaking founder Guo Xiruo predicts that by 2025, there will be at least one Chinese cosmetics brand with over10 million RMB GMV and wide global recognition.
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