Japan ranks among the top five countries worldwide in the booming retail cosmetics and toiletries industry. The cosmetics market in Japan is anticipated to experience a Compound Annual Growth Rate (CAGR) of 2.77% between 2023 and 2028. The export value of cosmetics from Japan is estimated to have reached USD 4.8 billion in 2023. This growth trajectory highlights the market’s ongoing expansion and potential in the coming years.
Key drivers of this growth include swift technological advancements and product innovations, a rising preference for organic and natural products, and the proactive implementation of supportive policies by the Japanese government. What sets Japan apart is not just its market size, but also the discerning nature of its consumers. Japanese individuals are renowned for their sophistication and well-informed approach when it comes to the chemical formulations present in beauty products. They possess a keen awareness of ingredients, demonstrating a strong interest in the efficacy and safety of the products they use.
Furthermore, Japan has solidified its position as one of the largest global markets for cosmetics and personal care products. This vibrant market showcases the dynamic and diverse range of offerings available, catering to a wide array of beauty needs and preferences. The remarkable growth and sustained success of the Japanese beauty and personal care market can be attributed to the country’s commitment to innovation, quality, and a relentless pursuit of excellence.
Japan’s cosmetics market boasts renowned beauty brands that have made a significant impact on the world, elevating the success of J-beauty internationally. Within the domestic market, skincare is the primary segment, making up about 48% of cosmetics shipments in Japan. Following closely behind is hair care, which has emerged as the second-largest segment, with hair colouring and treatment preparations playing a substantial role in shaping the market’s size.
The beauty market in Japan is closely connected to the personal care market, where innovative products blend the research advancements of both industries, creating a seamless combination. When it comes to cosmetics, Shiseido Company Limited stands out as the clear leader, known for its high-end and reasonably priced products that enjoy a strong reputation both in Japan and internationally.
The cosmetics exports grew steadily within the last six years, with major importers being neighboring regions like Taiwan, South Korea, and China. However, in 2022, there was a deviation from this pattern as the export value experienced a decline, representing the first occurrence of such contraction. This reduction aligned with a noticeable annual inflation rate and difficulties encountered by Japanese cosmetic brands, which faced a boycott in the Chinese market following the repercussions of Tokyo’s disposal of nuclear-contaminated wastewater into the ocean. Despite these setbacks, however, this market is expected to grow in the following years.
Sustainable Palm Oil Potentials
Sustainable palm oil has the potential to play a significant role in the J-Beauty industry as it aligns with the values of sustainability and responsible sourcing, which can be a valuable ingredient in various beauty and skincare products.
Palm oil is highly versatile and finds its way into a wide range of beauty and skincare products as it serves as a fantastic natural and eco-friendly alternative to other oils and emollients. One of the standout features of palm oil is its smooth texture and emollient properties, which greatly enhance the sensory experience of beauty products. It helps improve the spreadability, absorption, and moisturising capabilities of skincare formulations. Sustainable palm oil delivers these benefits while maintaining ethical and environmental standards.
Apart from that, palm oil naturally contains antioxidants, including vitamin E, which contribute to the stability and prolong the shelf life of beauty products. This is particularly important for products that incorporate natural and organic ingredients, as they typically have shorter shelf lives as compared to their synthetic alternatives.
Over the past five years, there has been a notable rise in the export of Malaysian palm-based oleochemicals to Japan, particularly for products such as palm kernel oil fatty acid (PKOFA) and stearic acid, which are commonly used in cosmetics formulations. Glycerin exports to Japan have also increased significantly as most skincare products incorporate glycerin because it improves hydration for all skin types. The demand for palm oil and its derivatives in the oleochemical sector experienced a decline in 2020 due to the outbreak of the Covid-19 pandemic. However, in 2021, a positive turnaround was witnessed as the cosmetics industry showed strong demand, leading to a resurgence in the demand for palm oil and its derivatives.
The forecast for 2024 indicates a positive trajectory for the export of Malaysian palm-based oleochemicals to Japan, building upon trends observed in recent years. Malaysian palm oil, renowned for its unique properties and numerous benefits, stands strong to tap into the thriving J-beauty industry. In the cosmetics and personal care sector, palm oil and its derivatives have already gained widespread use in skincare products, soaps, hair care items, and more. The emollient properties and stability of Malaysian palm oil contribute to its attractiveness as a key ingredient in these formulations.
Moreover, a significant factor enhancing the attractiveness of Malaysian palm oil in the Japanese market is its adherence to sustainable and ethical practices. With an increasing emphasis on environmental consciousness and ingredient awareness among Japanese consumers, Malaysian palm oil can meet these demands effectively.
In summary, the positive outlook for Malaysian palm oil in 2024 indicates a strong potential to benefit from the ongoing expansion of the Japanese beauty market. Its diverse applications and commitment to sustainability position it as a valuable and sought-after ingredient in the cosmetics and personal care products favored by Japanese consumers. The industry’s resilience, along with a recovery from pandemic-related challenges, further supports the promising prospects for Malaysian palm-based oleochemicals in the Japanese market in the coming year.
Prepared by Nursabrina Hayat
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