Report

Japan cosmetics market is experiencing constant growth and is projected to reach USD 31.82 billion by FY2031 from USD 22.85 billion in FY2023. The country's ageing and cosmopolitan population, as well as its traditional beauty standards, have helped them create a thriving market for cosmetics.
Also, the high level of disposable income in Japan is one of the major factors driving market growth for cosmetics. In addition, a variety of foreign and domestic beauty products are in high demand due to the sizeable population in the nation that has the capacity to pay premium prices for premium and luxury products including cosmetics. The market is expected to register a strong CAGR of 4.23% for the forecast period between FY2024 and FY2031 due to the stagnant population who are ageing, particularly women, who are becoming more mindful of their appearance and choosing chemical-free cosmetics. Cosmetic brands are putting more of an emphasis on using natural ingredients to create their goods.
South Korean hygiene and cosmetics manufacturer Aekyung, introduced LUNA, a cosmetics brand, at major offline stores in Japan to attract more customers and widen its sales channels. In the Japanese e-commerce sector, Aekyung's concealer has already gained popularity for its ability to cover up skin imperfections.
Integrating Technology in Beauty
Asian manufacturers exhibiting at Cosme Tokyo showcased the very latest in science-driven cosmetic products to appeal to the discriminating, smart, and well-educated Japanese consumer who is interested in ingredients and beauty technology. Beauty apps has seen a surge in Japan that offer virtual makeup try-on, skin analysis and individualized beauty advice. With the help of these apps, users can virtually try on various beauty looks, play around with colour combinations, and discover goods that are right for them. Additionally, several applications include product reviews, tutorials, and skincare advice. In order to give customized skincare regimes, Japanese companies have created smart beauty products that connect to smartphones or other devices. These tools evaluate moisture content, evaluate skin condition, and make appropriate product and therapy recommendations. To consistently improve recommendations based on user feedback, some devices even incorporate artificial intelligence (AI) algorithms.
With the upcoming release of Scalp Luxe ST, Japanese prestige skincare brand Seleia is utilizing microneedle technology. It comes in the shape of a pen. This is a therapy serum for sensitive and itchy scalps.
Ageing Population
Globally, Japan has the second-highest percentage of adults aged 65 years and older. In order to look young and wrinkle-free, anti-ageing products are becoming popular due to the country's elderly population. Customers are interested in products that address particular issues including fine lines, wrinkles, and sagging skin. Hyaluronic acid, collagen, and retinol are typical anti-aeging components popular in Japanese skincare products. The global market is expected to grow as a result of consumer demand for anti-wrinkle lotions and creams. Japan's cosmetics market is expected to grow as a result of consumer demand for anti-wrinkle lotions and creams. Various brands are targeting this market with its various products that offer a solution to these problems.
CBD as an Ingredient
The demand for CBD (Cannabidiol) as a component in beauty products has increased among Generation Z consumers in Japan. Japan's market is still developing because of its tight rules. Since marijuana has been illegal in Japan for many years and is still widely seen as a harmful narcotic, the market for CBD beauty products is still modest. This is especially true among older and more rural Japanese people. However, using CBD products has grown in popularity recently among younger Japanese who live in cities, especially those who are looking for relaxation and stress reduction. Because there are still several restrictions on manufacturing CBD in Japan, domestic cannabis firms typically import their CBD from Europe or the US to incorporate them in cosmetics products to fulfil the demand.
Government Regulations
The Japanese government maintains strict laws and regulations governing the cosmetic industry, and it has zero tolerance for the sale of fraudulent or forged cosmetics and personal care items. Japan has enacted a list of ingredients that are forbidden to be used and a positive list for UV filters and preservatives. Aside from these limitations, it is the responsibility of cosmetic makers to ensure product safety. Some of the restricted substances are sodium perborate, chloroform, pregnenolone acetate, dichlorophene, mercury and its compounds, strontium compounds, sulfamide and its derivatives, Nitrofuran type compounds and others. To control the practice, the government takes appropriate actions against the importers of forged products. Additionally, custom authority of Japan plays a significant role in monitoring import of cosmetic products for assurance of product quality and safety and the protection of social and natural environment.
Online Segment is Growing Business
Despite the COVID-19 situation, D2C cosmetics brands and companies have seen significant sales increase since 2020. The concept has made it possible for businesses to customize products and adjust to changing consumer demands. Increased smartphone subscriptions, improved internet connectivity, and simple and convenient shopping experiences have all contributed to a surge in the sales of personal care products through online and D2C channels. Brands are spending a lot of money on the internet and e-commerce platforms. Consumers in the Millennial and Generation Z people frequently use this online buying channels. Almost every brand have their own website where they interact directly to consumers and sell.
Impact of COVID-19
A significant impact of Covid-19 was observed at the cosmetics market of Japan because of the pandemic. Due to supply chain disruptions brought on by the pandemic, there is a lack of raw materials, which drives up costs. Additionally, as people spend more time at home and less time in public places, there has been a decline in the market for cosmetic products. Consumer preferences and behavior changed in response to the pandemic, consumers put more emphasis on self-care and preserving good skin. The pandemic accelerated Japan's transition to e-commerce, customers went to internet platforms to buy their cosmetic items as traditional businesses closed and saw less foot traffic. Online marketplaces and brand websites saw an increase in sales and became essential for
reaching customers.
Key Players Landscape and Outlook
The cosmetics industry in Japan is booming and serves as a significant centre for the manufacturing and consumption of cosmetics goods. High-end luxury cosmetics brands can command premium prices from consumers. Cosmetics companies began incorporating technology into their websites, providing customers with virtual try-on services to aid in their purchasing decisions. Virtual reality (VR) marketing has recently piqued the interest of cosmetic brands more and more. One of the key advantages of marketing in the VR space is the opportunity to provide clients with an entirely immersive brand experience. Cosmetic companies can create virtual environments that enable users to interact and explore their goods in a realistic manner.
Japan's Kao Corporation has introduced a new brand namely 'Unlics' for Generation Z men who desire a deeper form of beauty than just personal grooming. It is launched to cater for the men segment who were looking were 'Fine texture,' 'bright, clear, and cool,' in Gen Z. Using the tagline "hungry for beauty".
Visee, a Japanese cosmetics company, is releasing a line of lipsticks designed to enhance colour and gloss retention in an effort to meet what it believes are unmet market demands for long-lasting lipstick.