Market Overview

As inbound and domestic demand declined due to the outbreak of novel coronavirus in 2020, growth of the domestic cosmetics market stayed flat for FY2019, attaining 2,648,000 million, 100.0% of the previous fiscal year. 
Looking at the FY2019 cosmetics market by product category, skincare accounted for the largest portion in composition ratio, 47.2% (1,249,000 million yen), followed by makeups 22.0% (583,000 million yen), hair care products 17.5% (463,000 million yen), men’s cosmetics 4.8% (126,100 million yen), and fragrances 1.2% (31,900 million yen).

Noteworthy Topics

Cosmetics Industry Strives in the "With Corona" and "Post Corona" Eras

The cosmetics market is facing unprecedented adversity, with sharp drop in inbound demand and decline in domestic demand due to expansion of telework and people refraining from going out. Nearly 10% decrease in size is anticipated for the market in FY2020, and the market is in a phase of major transition, exemplified as the changes in buying behavior of consumers. Under the circumstances, companies of cosmetics industry are striving to deal with “With Corona” and “Post Corona” eras. 
For instance, cosmetics manufacturers are enhancing sales channel with e-commerce and live commerce, while reinforcing promotion by online counseling, SNS marketing, and online seminars. In terms of products, personalized items and items to be used with masks are developed. From human resource perspective, new programs such as online trainings are developed.  
Wholesalers are focusing on use of POP displays to promote more frequent use of products, enhancing selection of stay-at-home-consumption products such as nail care items, and strengthening their basic function i.e. providing stable supply. 
In cosmetic retail businesses, retailers are placing emphasis on measures such as deployment of various cashless payments, enhancement of products which can be used with masks, adding lineup of low-priced products, digitizing promotion tools, and increasing more selection of stay-at-home-consumption products. 

Future Outlook

Due to downturn in domestic and inbound demand affected by the COVID-19, the cosmetics market is projected to yield 2,400,000 million yen in FY2020, 90.6% of the previous fiscal year. From FY2021, domestic consumption is assumed to make an upward turn as the Coronavirus situation calms down, and inbound demand moderately recovers as well with gradual increase in the number of inbound tourists.

Research Outline