Online Skincare & Cosmetics Sales on the Climb

Hada Labo (肌ラボ) is an $11 Japanese face cream, which according to their website sells a bottle of lotion every two seconds in Japan.

A Google search in the US for Hada Labo lotions reveals the usual players – Amazon and Ebay – dominating the search results. Amazon.com has over 700 reviews for Hada Labo, while Ebay.com has 77 Hada Labo lotion products currently being sold.

But how do consumers discover, review, and ultimately purchase skincare and cosmetics products in Japan?

While the purchase journey differs slightly depending on age segment, as the influence of social media continues to grow, consumers are more reliant on social media and social networks to make purchase decisions rather than more traditional platforms like TV or magazines (although magazines still play their part here: browsing through magazines at cafes or convenience stores, for example, is a popular past time esp for females).

Let’s take a look at the Japanese social media landscape and see who the big players are and how consumers and brands are utilizing them.

Social media platforms Twitter, Facebook, and Instagram are the main social networks in Japan having slowly overtaken local players like Mixi which has seen its popularity wane over the past 10 years.Twitter is the leading platform with over 45 million users, Facebook has over 28 million users, and while Instagram still only has 20 million users it is going strong and is predicted to overtake Facebook in the next few years.

Source: Nikkei Stats 2017

 

The key to Instagram’s growing popularity is it’s focus on using pictures and video to help users communicate rather than a reliance on written text. Which fits in perfectly with the Japanese preference for non-verbal forms of communication and helps users avoid any misinterpretation or offense using words.

In a trend that bucks the global norm, Japanese internet users spend more time on Youtube than on social networking platforms with over 70% penetration. While Youtube music videos and other short videos are hugely popular amongst a younger generation who rely mainly on smartphones to access entertainment, another reason for Youtube’s popularity stems from the Japanese desire to be part of groups, especially niche groups. Youtube provides the ideal platform where one can be a subscriber to a group dedicated to a music idol, a particular style of cosplay, or even one dedicated to reviewing cup noodles. Feeling part of a group, needed by the group and contributing to the group (see amae article), is an innate part of Japanese culture.

The last big player is Line – the communication app with over 70M users – extremely popular with Japanese teens and under 30s, but it is used primarily as a messaging app rather than a platform for brands to engage consumers through advertising or brand influencer types. Although this may change as the platform slowly evolves.

While brand influencers are relevant in most markets they are especially influential in Japan. Where groupism is interwoven into the fabric of society, brand influencers tend to thrive – because every group needs a leader and when the leader speaks the group tends to listen. And social media and networking sites like Twitter, Facebook, Instagram, and Youtube have been perfect nurturing grounds for brand influencers to seed themselves and grow their flock of dedicated followers. Getting approval from these influencers, and from the group as a whole, allows brands to gather instant authority and recognition.

One such figure, as an example, is a Japanese influencer named Akecharuu, who has around 90k Youtube subscribers, 22k Twitter fans, and 18.8k followers on Facebook. Ok not a huge following in comparison to say Shakira (waka waka … yes you know the song), but she is one amongst many influencers who have their group of dedicated followers and when she says ‘buy’,  the group asks ‘how many?’. They call her a ‘micro-influencer’ as opposed to a ‘macro-influencer’ who is a usually a celeb and household name – like Shakira!

Akecharuu on Youtube

 

Akecharuu was employed by Hada Labo to handle a review of one of their new product lines and it was watched over 60k times within a few days and generated thousands of comments. Although, Akecharuu’s media content is targeted at under 30 females, there is an army of cosmetic influencers in Japan reaching people of all ages – each with a slightly different image and niche following. And that is just in cosmetics alone.

A recent article by Forbes (see appendix)  suggests that “micro influencers” generate strong brand engagement and offer suggestions on how to find the right micro-influencer. One of the most important points – finding an influencer who matches your brand. For example, in the case of Hada Labo, an influencer with fewer followers like Akechuruu, but with pristine skin and the right look, may be more effective in generating a group of more dedicated brand evangelists than an influencer with deep knowledge of beauty care and many more followers, just not the right look.

So they have had their interest piqued by the influencer and have had some positive group interactions about the brand and product – what happens next in the purchase journey?

Many consumers young and old then go onto review sites to read product reviews and check out prices and also make purchases. One of the biggest and most popular cosmetics review sites is @cosme which has product rankings and consumer reviews in the various categories along with a load of other information related to cosmetics and overall beauty and health. To the western eye the @cosme site may look cluttered with too much information, but to the Japanese consumer the more information the better – especially when it comes to skincare.

Now the due diligence has been done (and Japanese are renowned for their dedicated due diligence in most product categories) what happens next?

In a recent Bloomberg article, according to Shiseido CEO Masahiko Uotani “an increasing number of their customers especially those in their teens and 20s are now shopping online and bypassing the advice of in-store sales assistants. Particularly with the younger generation, often they don’t go into the stores. The way they buy, the way they share their excitement with their friends, is completely different from older generations.” Which may seem unsurprising to a western audience, but Japanese have traditionally been big fans of visiting the store, taking in the in-store experience, and seeking advice from BAs – so this is a definite change in shopping behavior. And although older segments are still big on in-store visits they are expected to slowly migrate to mostly online purchases in the near future – although near future in Japan often means a lot later than anywhere else.

Which is why Shiseido has been busy acquiring a number of AI firms in the US to help them develop simulation AI technology allowing customers to enter an augmented reality environment from their mobile devices or desktops in a move by Shiseido (and others) in a move to replicate the in-store shopping experience online. Here they can apply and remove make-up, see what they look like, and make a purchase if they so choose. Although the sensation of the product on the skin is still very important before purchasing – especially in a country with four distinct seasons and consumers accustomed to sampling products in-store – one wonders how Shiseido and their rivals plan to deal with that issue.

References:

https://www.forbes.com/sites/forbesagencycouncil/2017/08/02/how-to-choose-the-right-micro-influencer-for-your-brand/#22eac2117885

https://www.bloomberg.com/news/articles/2018-04-17/beauty-giants-snap-up-technology-startups-to-draw-young-shoppers

 

 

 

Sam Heinrich
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