This year marks Kose’s 35th anniversary in China and the company’s third appearance at the China International Import Expo (CIIE).
For Japanese brands, being in China these past two years undoubtedly means facing significant changes in the market and demand. How to confront these challenges and turn them into opportunities is a common issue for all companies.
At this year’s CIIE, high-end, technology, and innovation were key themes for Kose’s exhibition. As a leading player in the Japanese cosmetics industry, what are Kose’s development plans for the future in China? What opportunities and trends are they observing in the Chinese market? With these questions in mind, CHAILEEDO interviewed Mr. Yasuhiro Mitani, Executive Director of Kose Corporation and Chairman of Kose Cosmetics Sales (China) Co., Ltd., to gain insights into the industry’s direction for the coming year.
With a focus on the Decorte brand, continuing to expand in the high-end market
Kose Group was established in 1946 and officially entered the Chinese market in 1988. In 2005, Kose China was established, and after 35 years of dedicated development, they have successfully introduced six high-end cosmetic brands and two makeup brands sold on cross-border e-commerce platforms. Kose currently has 450 offline stores and counters nationwide and is present on various e-commerce platforms, achieving complete coverage of both online and offline sales networks.
The brands they have introduced reflect the importance of the high-end market in Kose’s China market deployment. In recent years, Kose has noticeably focused on revitalizing and upgrading its key brands. For example, last year at the CIIE, they launched the high-end series SEKKISEI MIYABI, targeting affluent consumers with anti-aging demands. This move signaled Kose’s commitment to the high-end and even ultra-high-end markets.
This year at the CIIE, Kose showcased the newly upgraded Decorte AQ Vitalizing series, another heavyweight player in the high-end market. Mr. Mitani told CHAILEEDO, “Among Decorte’s various product lines, ‘AQ’ and ‘AQ Meriority’ represent the brand’s absolute quality and are the most emblematic high-end series, fully embodying Kose’s technology, innovation, and sensibility. The botanical series, multiple sunscreens, and loose powder are also well-loved by Chinese consumers.” Gradually expanding Decorte’s performance growth is a strategic focus for Kose China in the high-end market.
CHAILEEDO learned that the new “AQ” series, which debuted with a new white visual appearance, is the sixth upgrade of the Decorte AQ series. The newly added extract of yellow orchid is a result of joint research between Kose Group and a globally authoritative botanical research institution. Not only does it enhance the generation of “IP3,” a key substance that promotes skin regeneration and skin structure formation, but its fragrance also has a positive effect on emotions.
Kose is further breaking through the core concepts of “regenerative medicine” and “neuroscience” and making strong efforts in the research and development of the “emotional skincare” field. All the new initiatives of Decorte demonstrate their commitment to advancing cutting-edge research in dermatology. “Establishing and strengthening Decorte’s presence as a truly high-end brand in the Chinese market is a major goal for Kose Group,” said Mr. Mitani to CHAILEEDO.
Not only in skincare, but Decorte’s makeup line also contributes significantly to Kose Group’s performance. When asked about strengthening the channel development of the makeup brand, Mr. Mitani stated, “Decorte’s star products, such as the Original Palette and Zen-In Foundation, have already gained popularity among Japanese consumers. Next, Kose will focus on how to enhance Chinese consumers’ attention to popular Japanese products. We will leverage our unique offline counter BC consultation service to provide customers with the most suitable makeup recommendations.”
New achievements debut, undertaking the pressure of market changes.
The theme of Kose’s participation in this year’s China International Import Expo (CIIE) is “Heart of Beauty, Wisdom Creates the Future.” Mr. Kazutoshi Kobayashi, Chairman and President of Kose Corporation, stated at the opening ceremony of Kose’s exhibition that technology and innovation are two keywords deeply ingrained in Kose’s DNA. The pursuit of “originality” that can lead the world with unique value creation has always been Kose’s benchmark.
Therefore, Kose showcased many new achievements, products, and technologies based on technological innovation. In addition to the new Decorte AQ series mentioned earlier, Kose also showcased a video featuring virtual makeup technology. This technology, co-developed by Kose and the Watanabe Laboratory at the Tokyo Institute of Technology, utilizes high-speed projection mapping and color correction techniques to help consumers achieve nearly realistic virtual makeup effects anytime, anywhere.
Notably, Kose made the China debut of the research results on “Skin Anti-Aging Research Driven by iPS Cell Research” at the CIIE. This is one of the outcomes of the joint “youthfulness research” conducted by Kose and the Shinya Yamanaka Laboratory at Gladstone Institutes in the United States.
It is understood that in 2022, Kose Group stationed researchers at the Shinya Yamanaka Laboratory, affiliated with Gladstone Institutes, to conduct research on the themes of “anti-aging” and “youthfulness.” According to Yasuhiro Mitani, Kose has been conducting fundamental research on iPS cells for over a decade. “We will fully utilize our R&D advantages, continuously observe and listen to the needs of each generation of consumers, and provide a more diverse beauty experience through innovative technology and products.”
In fact, Kose’s efforts in high-tech, raw material development, and fundamental research are constantly evolving based on the changing market demands and landscape. According to Yasuhiro Mitani, the tightening of regulations in China’s cosmetics industry, the continued rise of the “ingredients-oriented” and “clean beauty” trends in China, have been major highlights in the cosmetics market this year. “The demand for safer natural ingredients and cosmetics that are friendly to humans and the environment will continue to rise. Kose will collaborate with the R&D department, marketing department, and sales department, strictly comply with new regulations, and provide consumers with safe and reliable cosmetics.”
For Kose, these challenges are also opportunities. Yasuhiro Mitani told CHAILEEDO that the consumer demands arising from these trends will serve as inspiration for future product development. Kose believes that the key to gaining a significant competitive advantage in the Chinese market lies in whether they can undertake these new challenges.
Strengthening channel deployment and deepening the Chinese market.
Whether it is product research and development innovation or product market layout, Kose has significant advantages. However, Kose’s third-quarter financial report showed a decline in sales from online channels and travel retail channels in China, despite growth in most markets within the group. It can be said that in order to restore high-speed growth in the Chinese market, Kose still needs to accelerate the optimization of its strategic layout.
Yasuhiro Mitani candidly told CHAILEEDO in an interview that contrary to initial predictions, offline foot traffic did not achieve the expected high growth after the pandemic. He mentioned that at this stage, offline foot traffic has not fully recovered, and the thoughts and purchasing behaviors of Chinese market consumers have undergone significant changes during the pandemic. Looking at the sales situation on various e-commerce platforms this year, the places and platforms where consumers purchase cosmetics have also changed. In this situation, establishing more and deeper communication and connection with consumers has become crucial.
In fact, Yasuhiro Mitani repeatedly emphasized the importance of offline layout in the interview with CHAILEEDO. When discussing Decorte’s market layout, he stated that they would strengthen communication and beauty care services between offline beauty consultants and customers to help establish stronger relationships between products and customers.
Furthermore, to enhance communication between sales consultants and customers, Kose will continue to improve the integration of online and offline channels. They will integrate data from physical stores, websites, e-commerce platforms, and all customer touchpoints, enhancing the value experience for customers and creating a distinctive high-end brand image.
In addition, online channels are also a focus of Kose’s recovery efforts. For example, Decorte has opened flagship stores on Douyin (Chinese version of TikTok), achieving full coverage on three major shopping platforms (Tmall, JD.com, and Douyin). Furthermore, through special video content featuring spokesperson Zhou Xun on Douyin, they aim to strengthen the presence of the Decorte brand among Douyin users. Sekkisei, on the other hand, will further enhance self-broadcasting on WeChat Mall to reach a broader range of consumers.
From an overall strategic perspective, the Chinese market remains a strategic priority for the Kose Group, and Kose China will continue to make efforts in various aspects to drive performance growth. Additionally, Yasuhiro Mitani stated that Kose will also establish deeper relationships with customers through other concepts.
For instance, in order to better implement its sustainable development strategy, Kose introduced the new concept of “3G” (Globalization, Genderless, Generation) to reach a wider range of consumer domains and provide cosmetics that are independent of age and gender to people around the world. This is also an important axis of Kose’s long-term strategy, “VISION 2026.”
“We hope that customers of different ages and genders can find cosmetics that suit them. Kose will support them in expressing their unique beauty as individuals. By sincerely facing Chinese customers and further consolidating our relationship with them, Kose will have greater development,” Yasuhiro Mitani concluded.
