Market Overview

The domestic natural & organic cosmetic market size for FY2021 is estimated at 164,200 million yen, 110.9% of the size of the previous fiscal year, based on the shipment values at brand manufacturers. The estimated market size for FY2020 in the 2021 survey, which was then projected to be below the previous year's level, is revised to a slight increase in this year’s survey. This largely owes to the expansion of e-commerce sales that covered the loss at brick-and-mortar stores that went through temporary closures and shortened business hours during the COVID-19 pandemic. Rise in the number of businesses that performed significantly in FY2021 contributed to a double-digit growth of the market.

While consumers that intend to lead a lifestyle conscious of sustainable development are increasing in Japan, natural and organic cosmetics are generally perceived as an inherently sustainable choice. The market is expected to grow steadily, against the backdrop of more women noticing signs that they have sensitive skins, as well as of the wider distribution and greater consumer recognition of the natural and organic cosmetics that provides benefits like those of general cosmetics. 

 

Noteworthy Topics

Multichannel Retailing

To win over customers, natural and organic cosmetics companies used to adopt a strategy to establish a greater empathy on the part of the consumer through concept branding, communicating its worldview and story. For this reason, the brands with abundant capital opened flagship stores in a prime location, where they can directly communicate their concept to consumers. Nevertheless, this trend has been changed by the ‘semi-self-shops’ (the stores where consumers can try/compare/purchase multiple brands at once) and mail orders, especially e-commerce.

One of the companies surveyed opened directly owned physical stores after they became a 10-billion-yen company by succeeding in e-commerce sales. In other cases, some brands won their customers particularly through drugstores and convenience stores, which had not been common channels for sales of natural & organic cosmetics. Since cosmetics are daily products, a large number of consumers attach greater importance to accessibility and affordability. As witnessed during the COVID-19 pandemic, these stores provide lifeline, which makes them the stable distribution channel unless unexpected problems occur in logistics. Expansion of the channel is expected to contribute to the market growth.


 

Future Outlook

Despite the downturn in overall economy due to the COVID-19 calamity, size of the natural and organic cosmetics market based on the shipment value at brand manufacturers is poised to grow to 169,000 million yen in FY2022, 102.9% of the size of the preceding fiscal year. It should be noted that neither the significantly relaxed COVID-19 border measures (which also permitted visits of individual tourists) nor the weak yen in the latter half of FY2022 has much to do with the market growth, since the natural and organic cosmetics market is not as reliant on mass purchases by foreign tourists as general cosmetics.

Growing interest in sustainability and SDGs in society is a tailwind for this market. Despite a slight reactionary decline from FY2021, the market of natural and organic cosmetics is forecasted to grow stably in FY2022.


 

Research Outline