Beauty brands that are actually Japanese
“J-beauty” seems to be its own category. But it’s already technically everywhere
Cosmetics brands are very concentrated in the hands of a few companies. The most successful beauty conglomerates include L’Oréal, Estee Lauder Companies, P&G, Unilever, Coty, LVMH, and Shiseido.
The global cosmetics market is expected to exceed at least 400 billion USD by 2022. This number includes skin care, makeup, and hair care. Asia Pacific has become the biggest regional market, which accounted for approximately 40% in 2018.
Japanese manufacturers have enjoyed established prestige in the Japanese domestic market as well as easier access to the rest of Asia.
The two largest Japanese beauty product manufacturers are Shiseido and Kao, which consolidated many brands that did not originate in Asia. The following brands are strongly associated with the North American and European markets more than the Japanese market to begin with, and are likely to maintain its current customer base.
Shiseido
Here are some brands Shiseido owns:
bareMinerals
bareMinerals is originally from the US, and started out with many loose powder products. To be honest, loose powder eyeshadow or bronzers have not been hot items in the Japanese market. But simplified “pure” ingredients and cruelty-free products are in-line with North American trends.
Dolce and Gabbana
Dolce and Gabbana Beauty inherits many design motifs on their packaging, such as black, gold and animal prints. Sometimes we wonder if premium packaging contributes too much to the pricing. Dolce & Gabbana makeup prices are comparable to YSL and Dior, but perhaps a bit lower than Chanel in some categories. Dolce & Gabbana does not have a skincare line, which is a category we may expect in the future because skincare is Shiseido’s forté.
Laura Mercier
Laura Mercier has achieved great distinction in its foundation products. Loose powder and primers for example have been well received all over retailers like Sephora. In 2018, the brand underwent a logo change to look more global. It created steps toward the “Flawless Face”, which is spot-on branding. We are certainly not seeing Shiseido shifting this brand’s best strategy away from foundation products.
NARS
NARS not only has hit products, but also hit product categories. With a single bestseller, the Orgasm Blush, NARS’s entire blush line catapulted into the spotlight for fashion shows as well as everyday makeup wearers. NARS is bold in both product execution and marketing; many of its eyeshadow and blush colors are fiercely saturated, product names can be racy, and makeup face charts can be edgy. Nevertheless, NARS fostered fans worldwide, and we think Shiseido is doing a good job in maintaining Francois Nars’s original direction.
Kao
Some of Kao’s Japanese cosmetics brands include Lunasol and Suqqu. Here are some brands Kao acquired:
Ban
Yes, we’re talking the deodorant brand, Ban. Ban has such an interesting history since the late 1800s. It was called “Mum” in the US and UK at different times. It was acquired by Bristol-Myers, and now owned by Kao.
Spray antiperspirants have been a fairly dominant category in Japan, as much as roll-on deodorants. Men’s roll-on deodorants hadn’t been popular in Japan before the 2000s, although demand surged after 2008.
Ban has different deodorant formulas in different markets. It is nevertheless certainly a household name in the US, where Kao is up against many competitors in the deodorant categories.
Jergens and Curél
Both Jergens and Curél are common throughout big box retailers and chain pharmacies all over the US. At lower price points, both of them are hardly “trendy” items with a large clout of social media influencers. It’s difficult to associate both of them with Japanese skin care at the first glance, but we see that Kao does have a solid grasp of vertical distribution as well as B2B channel relations in the US.
John Frieda
John Frieda’s logo states “London, Paris, New York.” This brand truly does not have a significant consumer-facing presence in Japan. John Frieda borderlines the professional hair care segment, but is made accessible to anyone in the US and the UK. Just like other Kao’s salon-grade hair care brands, such as Oribe and Goldwell, John Frieda pays spot-on attention to non-Asian hair types and hairstyle trends.
Molton Brown
While Molton Brown used to run a hair salon, it is currently a premier brand for bath, body, fragrance, and elaborate gift products. It would not be an understatement to say that Molton Brown is a viable opportunity for Kao to advance into the upscale toiletries market, because Kao’s brand image is rather different in Japan.
Are acquisitions good or bad?
Acquisition does not mean a complete change in manufacturing locations nor product quality. A lot of news around M&A in the beauty industry is tailored towards investors, rather than consumers. As long as product quality doesn’t deteriorate, many of us consumers don’t easily feel the impact of acquisitions.
Even though we made comparisons between different markets (especially Japan and the US), conglomerates are unlikely to mismanage brands they own overseas, so there isn’t much to worry about as a shopper except for a couple of considerations:
- Makeup brands can expand product offerings, but not always at a good price nor memorable performance:
Big cosmetics brands want to carry comprehensive offerings. Except for nail and hair – or maybe faux eyelash companies – it is uncommon for cosmetics brands to carry limited types of products. There may be some lipstick-only indie brands but big names hardly ever focus on a few things they do best.
NARS Cosmetics has positives and negatives when it comes to releasing new product types on the market. NARSskin was founded in 2002, after its acquisition by Shiseido. NARS Cosmetics did not have a skincare line prior. While Shiseido is strong in skin care, NARS’s skincare lineup never seems to boaster a following as sizable as its color makeup lines.
- Animal testing policies may change:
Disappointingly, cruelty-free products are not sought after everywhere. When a brand is bought by a big company, its cruelty-free policy may change. It shouldn’t always be bad news; brands that seek entry into the North American market tend to be more conscious about animal testing, and can change for the better.
Conclusion
There are understandable reasons behind acquisitions. L’Oreal, the largest beauty company in the world, spent more than 8 billion Euros in 2018 on marketing. Its annual sales in the same year were 26.9 billion. Expenses are remarkably high in the beauty industry.
Fostering brand trust is hard work, and smaller beauty companies seek to have exit plans after successful launches.
Larger companies have been treating brands as part of their diversified portfolio. This attracts investors because diversifying is of utmost importance for most investing activities.
Between big and small companies, it’s win-win in acquisitions. News of M&A may not elude enthusiasts and investors, but it seems companies are consolidating more than ever under consumers’ noses.
Big Japanese companies are capable dark horses in acquiring global reach.
Regardless of big vs. small, indie v.s. mainstream, the beauty industry is projected to grow. At Brando, we see that many former smaller brands are in good hands of big companies and we hope that they can satisfy their customers for a long time ahead.
