Super Premium Beauty and Personal Care in Japan

2020 IMPACT

Decimation in tourism due to border closures, shorter opening hours and store closures negatively impact category sales

Prior to the pandemic, super premium beauty and personal care was strongly supported by inbound tourists coming to Japan. Therefore, sales suffered a strong contraction due to the closure of the country’s borders in 2020 as the government endeavoured to stop the virus from spreading.

Growing shift to maximise e-commerce sales and digital experiences to compensate for store closures

Due to this unprecedented situation and subsequent challenging trading environment, super premium beauty and personal care brands increasingly adopted a multichannel approach in 2020, with many more adopting e-commerce. For instance, the Decorté Concierge Channel on YouTube, which launched in August 2019, enhanced its content to offer an alternative experience to in-store consultation.

Despite challenges the category witnesses store openings, new brand launches and new partnerships

Despite the unprecedented trading conditions created by the pandemic, remarkably some major super premium beauty and personal care companies still managed to expand their store-based channel in 2020 with the view that consumers would return by 2021 when the Tokyo Olympic Games, postponed from 2020, were now scheduled to take place.

RECOVERY AND OPPORTUNITIES

Category recovery dependent on relaxation of travel restrictions and further outbreaks

Recovery of the super premium beauty and personal care category will be highly dependent on the relaxation of travel restrictions once the pandemic starts to recede in countries around the world. Only then are tourists expected to return to Japan.

Change of focus among industry players towards domestic consumers and cross-border e-commerce

Given the decimation of inbound arrivals to Japan, super premium beauty and personal care players are expected to increasingly focus on domestic consumers as well as global changes in shopping habits including the growing uptake of cross-border e-commerce. The important consumer base of Chinese shoppers are increasingly reinforcing digital shopping and enjoying new experiences such as live commerce.

Ongoing development of e-commerce in response to COVID-19 and changing consumer expectations

In addition to the development of the e-commerce channel in response to the COVID-19 outbreak, consumers’ expectations have also grown and changed. For instance, many consumers still expect to receive human interaction when they have questions about products they are seeking to buy online, stimulating companies into altering their e-commerce infrastructures, services and overall capabilities.