Commentary
The rise of J-beauty
October 24, 2024
The rise of Japanese beauty (J-beauty) on the global stage has been remarkable in recent years, driven by a unique blend of tradition, innovation and changing consumer preferences. This has positioned Japanese cosmetics and skincare products as highly sought-after items in the international beauty market.
Japanese beauty products have experienced significant growth in international markets. With the Japanese cosmetics industry valued at over 3 trillion yen, it ranks as one of the largest beauty markets globally, second only to the US and China. This expansion is projected to continue, with the market expected to reach USD 36.93 billion by 2029, growing at a compound annual growth rate (CAGR) of 2.87%.
Factors driving J-beauty’s global appeal
Skincare-first philosophy
The Japanese approach to beauty emphasizes skincare over makeup, resonating deeply with global consumers. This philosophy, rooted in the belief that beauty is an extension of overall health and wellness, is characterised by multi-step skincare routines focused on hydration, protection and prevention.
Technological innovation
Japanese beauty brands are renowned for their leading research and development. The seamless integration of technology and nature in product formulations sets J-beauty apart. Advanced ingredients like hyaluronic acid, ceramides and collagen are commonly used, while a continuous emphasis on innovation keeps them ahead of competition.
Natural and traditional ingredients
The use of unique Japanese ingredients like sake, fermented rice water and camellia oil provides a distinctive edge in the global market. This focus on natural and traditional elements aligns with the growing consumer preference for clean and sustainable beauty products. Though sustainability has been gaining traction in traditional beauty recently, it has always been rooted in J-beauty brands.
In addition, the rise of social media and e-commerce platforms has played a crucial role in J-beauty’s global expansion. Approximately 80% of beauty shoppers utilize social media daily, with 62% turning to influencers for product recommendations. This digital presence enables Japanese brands to reach international audiences effectively and more quickly than in the past. Changing consumer preferences have also helped it rise on the global stage. In the last few years, the “clean girl” beauty trend has emerged on Tik Tok and Instagram that emphasizes a fresh and natural appearance that accentuates one’s natural features. The minimalist approach to beauty, focusing on skin health rather than heavy makeup, has influenced global beauty trends. This “skinimalism” concept resonates with consumers seeking more sustainable and effective beauty solutions offered by J-beauty brands.
Kosé
One of our holdings has been capitalizing on this trend. Kosé (4922 JP) is a Japanese company founded in 1946 is a manufacturer and retailer of J-beauty products ranging from skin care to makeup to hair care. The company has a distribution network in over 20 countries with many different brands under its umbrella, but the most known in North America is tarte, widely sold in Sephora and Ulta stores. The company’s other brands include Decorté, Albion, Sekkisei and Kosé.
Capitalizing on the rise of clean beauty and J-beauty in North America, tarte’s cosmetics have continued to gain popularity and grow market share as a result. In H1 of 2024, the company saw a 38% year-over-year revenue growth in North America from tarte. We believe that the company will continue to capitalize on this trend and grow not only in North America, but in other parts of the world.