Foreign visitors fuel cosmetic sales in Japan

posted on September 3, 2016

While foreign tourists' demand for pricier products is slowing, sales of cosmetics -- a class of reasonably affordable consumables -- are healthy. The industry is scrambling to lock in the pleasantly surprising profits.

Shiseido has raised its fiscal 2016 projection for sales to tourists by 30%, to 34 billion yen ($326 million). The company has added more languages to tablets used to explain products at sales booths. To attract more visiting buyers, the words "Tokyo Ginza Shiseido" were added to packaging. Instead of gifts, Shiseido has seen more customers purchase products for their own use after taking part in beauty consulting sessions.

Pola Orbis Holding foresees a 30% to 40% rise in sales to foreign tourists this fiscal year, with purchases reaching 13 billion yen to 14 billion yen -- up from the original projection of 8 billion yen to 9 billion yen. Pola Orbis has expanded its staff of Chinese and other foreign sales people who work on commission. Of its approximately 50,000 contract sales persons, 6,000 are non-Japanese. Word of mouth has been fueling sales and the company has seen more repeat customers who buy products every three to four months.

Kose, whose Sekkisei line is famed among Chinese buyers, recorded on-year sales growth of 9% to 3.8 billion yen during the April-June quarter. Concerned about the strong yen, the company had projected a 6% drop in tourist purchases for the fiscal year -- but since July sales have held steady. Depending on buying trends of foreign visitors, fiscal-year operating profit may exceed the projected 36 billion yen, which itself would be a 4% increase from last year.

source by nikkei
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