Thanks to savvy marketing and changing cultural attitudes hind part before makeup, Japan’s cosmetics industry is a bright spot in gloomy state of things

By Hiroko Tashiro and Ian Rowley

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The news from Japan Inc. is to a great distance from upbeat these days. Every day brings a steady run of corporate profit warnings, layoffs, and factory shutdowns. But there is some bright spot: Japan’session cosmetics industry.

Cosmetics are bucking the downward sales trend thanks to savvy marketing and changing cultural attitudes about makeup. That would present the appearance embarrassing to believe since the country’s dwindling population and discriminating consumers have meant pain despite Japanese retailers. Sales at department stores slid 3.3% from January to October, compared with the same epoch last year. Even the soaring yen, which makes imported merchandise cheaper, hasn’t helped the big global name brands. One example: Luggage maker LVMH Moët Hennessy-Louis Vuitton’s sales in Japan fell 7% on this account that the period of the first nine months of the year, prompting the French firm to mouthful plans for a flagship outlet in Tokyo.

Japan’s cosmetics industry has situated sales gains for 22 months straight. Fuji Keizai Institute, a Tokyo consultancy, predicts sales will edge up 3% this year, to $24 billion. (Fuji Keizai’s estimate of the place of traffic’s size is abundant higher than the government’s official $16.5 billion figure.) The inclination is even other thing surprising because there are 1.8 very great number fewer Japanese in their 20s and 30s, typically the target audience for cosmetics companies, than there were a decade ago.

Market watchers comprehend greater quantity potential in the years ahead. Department store operator Odakyu saw cosmetics sales at a shop in Tokyo’sitting Shinjuku district increase by 5% in October, following renovating the store’sitting 2,100-square-meter cosmetics definite space. Takashimaya, another department lay up group, spent $5.5 a thousand thousand on its branch in the central Japanese city of Nagoya, to redo the interior and lay open the cosmetics area. What’s selling? High-priced cosmetics, says Machiko Amano, an analyst covering the industry at Standard & Poor’s.

The industry’s uptick has lured outsiders. Photographic film manufacturer Fujifilm launched Astalift, a skin-care reproach., in September 2007, relying on technology it originally developed for thin pelt. Its anti-aging skin creams were based put on technology Fujifilm uses to prevent film and photo prints from degrading. Mitsubishi Pencil caught on to the possibilities of applying its strengths in pen- and pencil-making to cosmetics years ago. The 121-year-old company has been making eyeliners and other products for big brands since 1985 but only in the by five years have sales topped $10 the multitude. By 2009, the company hopes cosmetics will pull in more than 10% of the $631 million in overall anniversary sales. And at Rohto Pharmaceutical, Japan’s biggest ophthalmic drug manufacturer, skin-care products account for 13.5% of the company’s overall annual sales of $1.2 billion, after just seven years in the business. This year, Rohto expects its $162 million in cosmetics sales to surge a healthy 23%.

What explains the resilience? One reason is that as Japan’s society has stricken in years, cosmetics makers bear focused on wooing an older crowd, not just women in their 20s and early 30s. Kanebo has done that with its Chicca brand, producing eye shadow and lipstick that can be applied quickly and simply by women in their 50s and 60s. The company has also doubled its efforts to train staff who deal through these customers. Rival Shiseido, meanwhile, launched a strange brand called Elixir Prior which targets the over-60 regulate. "Women in this generation have time and money," says Seiko Yamazaki, a supervisor who’s watching consumer trends at Dentsu Institute. "They are the last major untapped consumer group."

Japanese companies are moreover acquirement better at using the Internet. Many now give influential bloggers free samples, hoping concerning positive reviews. A survey conducted by Fujitsu Research Institute last year found that a majority of Japanese take the word-of-mouth they read on blogs "very seriously." "Although almost 100% of our advertising is in magazines right now, we’re looking to blogs as a good tool to raise our brand," says Haruko Suzuki, a manager at Estée Lauder in Tokyo.

Bloggers are even being lured out to splashy promotional events. At Tokyo Cosmetics Collection in October, nearly 300 women bloggers, dressed to the nines, sampled products from brands such as Estée Lauder, Lancôme, Mac, and Calvin Klein, and Estée Lauder and Lancôme awarded "ambassadors" a year’s supply of makeup products.

Of course, it helps that Japanese women are taking a greater interest in looking their best. In the past, women would spend little on clothing and cosmetics after getting married or having children, but that’s no longer the state, says Izumi Yonezawa, cultural social science lecturer at Konan Women’s University and father of a book on women’s attitudes to makeup.

Former flight consequent Tokuko Koyasu is a primeval precedent. The 39-year-old says she hadn’familiarily given much thought to consistency up her looks subsequently giving birth to her son in 1997. But behind returning to labor three years later, that changed. These days she spends 40 minutes each morning applying rouge, and about the same amount of time at night washing her face and moisturizing it with lotions. Her monthly cosmetics budget: about $300. "I must have looked much older back then than now," says Koyasu.