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Business

Toiletries maker Lion to release exclusive goods for Alibaba

Chinese internet sales become crucial revenue source for Japan Inc.

Tmall Global's top page

TOKYO -- Toiletries maker Lion will produce Japan-themed toothpaste exclusively for e-commerce behemoth Alibaba Group Holding, as more Chinese consumers turn to Japanese brands for upmarket products.

The Tokyo-based company plans to sell matcha-scented toothpaste from its popular Systema brand on Alibaba-operated website Tmall, with tubes and packaging featuring designs of Mount Fuji. The price will be 22.9 yuan ($3.43), making it a luxury product.

Lion's new toothpaste developed for Alibaba will be matcha-scented.

Cosmetics and sanitary goods from Japanese brands are popular among China's middle class. Internet sales from Japan have exploded to 1 trillion yen ($9.11 billion) per year.

This is the first time that Lion will produce dedicated goods for Alibaba. "We've never heard of a Japanese company making us exclusive products," said a public relations representative from Alibaba's Japan office. Production will be handled by Lion's subsidiary in Qingdao, Shandong Province.

In 2011, Lion joined Tmall, where it currently retails toothpaste and is the top seller of toothbrushes. The company is also exploring the release of dedicated toothbrushes and mouthwash for the online marketplace. Lion's digital Chinese operations likely total several billion yen annually and are expected to grow 20% to 30% a year going forward.

The consumer products maker will also expand its internet sales staff from around 10 at the end of 2016 to 25 or 30 by the end of next year, bringing in experienced professionals. In addition to digital operations in China, Lion wants to strengthen domestic online sales of health products.

Last year, China's retail e-commerce market grew 40% from the previous year to $927.6 billion, accounting for half of the world's total, according to Japan's Ministry of Economy, Trade and Industry. Online sales from Japan to China jumped 30%, thanks largely to wealthy urban consumers who are becoming an increasingly important demographic for Japanese companies.

Compatriots are following in Lion's footsteps. In 2015, health products maker Kao partnered with Alibaba to expand internet sales of diaper brand Merries, while cosmetics company Shiseido launched a virtual store on Alibaba's site to sell products including its mainstay skincare line. Online sales accounted for 25% of the total for Shiseido's Chinese operations in the six months ended June, with Alibaba becoming a particularly important channel.

(Nikkei)

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