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Japan's cosmetics industry coming off another bumper year

Expensive skincare products and exports to Asia drove growth in 2017

TOKYO -- Japan's cosmetics shipments probably set a new value record for the second straight year in 2017, lifted by high-priced skincare products and growing exports to the rest of Asia.

The tally, including hair care products, likely reached roughly 1.6 trillion yen ($14.7 billion), up 5% from the previous year. The aggressive expansion of production capacity by Japan's leading cosmetics makers suggests that growth will continue this year and beyond.

Cosmetics shipments for January through November of last year totaled about 1.43 trillion yen, rising 6% from the same period in 2016, data from the Ministry of Economy, Trade and Industry shows. 

With the domestic factories of companies like Shiseido and Kose operating at nearly full capacity during December, shipments in that month totaled an estimated 140 billion yen. That suggests that shipments for all of 2017 topped 2016's roughly 1.52 trillion yen, the first new record in 19 years.

Domestic department stores report that expensive skincare products priced at 5,000 yen and above have sold well. Anti-wrinkle lotions and creams debuted in 2017 by Pola Orbis Holdings and Shiseido proved to be big hits.

Purchases by foreigners visiting Japan remained firm, and exports, especially to Asia, were brisk. For the 11 months through November, exports grew roughly 40% year on year to some 330 billion yen, exceeding the full-year record set in 2016.

Shiseido, Kose and Pola Orbis Holdings are all expected to post record operating profits for the 2017 fiscal year. Shiseido plans to start up new factories in Otawara, north of Tokyo, and near Osaka beginning in 2019. Kose is investing in added capacity at its main production base in Isesaki, northwest of Tokyo.

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