Japanese MarketThe Cosmetics Industry• 1,100 cosmetics manufacturers in Japan in 1992• five companies accounted for 69% of domestic sales • imports represented 5% of total sales • Japanese cosmetics market was mature • major consumers were women in their 20s/30s• foreign-made cosmetics considered high-status

Japanese MarketThe Direct Selling Industry• largest direct selling market in the world in 1992• estimated $19.2 billion in retail sales• bypass wholesale and retail distribution systems• attractive second career for mothers

Direct Selling Cosmetics Companies 1. Pola 2. Nippon Menard 3. Avon 4. Noevir

Japanese MarketConsumer Behavior• further education and working outside of the home• many employed predominantly on a part-time basis• 40% of cosmetics sales were to women in their 20s/30s• fair complexion & fine-textured skin considered beautiful• spent 3x more on skin care than the average American

woman

Japanese MarketProducts• Kao and Shiseido dominated the Japanese skin care market• foreign manufacturers more successful selling makeup than

skin care products• makeup products associated with status, image, & dreams• want highly scientific skincare products especially made for

them by Japanese manufacturers

Japanese MarketDistribution• cosmetics were distributed through three main channels: 1. franchise systems 2. general distributorships 3. door-to-door sales

Japanese MarketDomestic Competitors• the top five cosmetics manufacturers in 1992 were: 1. Shiseido (27%) 2. Kao (16%) 3. Kanebo (11%) 4. Pola (8%) 5. Kobayashi Kose (7%)

Japanese MarketForeign Competitors• companies such as Max Factor, Revlon, and Clinique entered

the Japanese market in the early 80s• selective distribution through a limited number of prestigious

department stores

Japanese MarketMKC in Japan• concern over being a late entrant in a mature, complex,

fragmented, and highly competitive market• estimated 3-5 years before turning a profit and taking share

from competitors• however it could be a good time to launch in Japan due to

demand for part-time employment