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Business

Japan's first wrinkle-fighting product powers Pola Orbis

Hot seller grew out of more than a decade of R&D, approval process

Pola Orbis is projecting record earnings thanks to its hit product Wrinkle Shot Serum.

TOKYO -- Cosmetics maker Pola Orbis Holdings' hot-selling facial wrinkle-fighting cream, Wrinkle Shot Serum, is turning into a cash cow that could fund the company's expansion overseas.

Japan's fourth largest cosmetics company released the "quasi-drug" beauty product in January.

Wrinkle Shot, released by subsidiary Pola, is the result of some 15 years spent exploring the mechanisms of wrinkle formation and developing substances to combat them, and after that, going through a rigorous government screening process that took twice the usual time. The spur-of-the-moment idea drawn from a type of ice cream also helped culminate in the birth of the hit product.

Containing a wrinkle-improving ingredient named NEI-L1 discovered by the company, Wrinkle Shot finally got the official go-ahead from the Ministry of Health, Labor and Welfare to tout its functions clearly and directly.

"I am using the second one and believe that my wrinkles have become more shallow," said a woman in her 70s who visited the company's flagship store Pola The Beauty Ginza in Tokyo's ritzy Ginza district. "It brightens my mood."

The store's beauty counselor said that because she can convey the product's functions to customers in a clear manner, it boosts confidence in her services.

Wrinkles are one of the most common complaints of middle-aged and older women.

While descriptions of the functions of conventional cosmetics are allowed to be no more specific than saying "reduces the visibility of fine wrinkles induced by skin dryness," that of Pola's serum went beyond that limit, as shown in its box.

Promoting the wrinkle-improving effects so directly became possible after the company obtained the health ministry's quasi-drug certification -- a category for products that contain active ingredients at a certain concentration and which have mild effects on the human body.

Although Wrinkle Shot is not especially cheap for such a product at 16,200 yen ($144) for 20 grams, its sales in the first six months were about 8.7 billion yen. The first fiscal-year sales target was also upgraded from 10 billion yen to 12.5 billion yen. Used in moderation, the product should last around two months.

The counselor said that "many customers who felt the efficacy keep repurchasing the product and sales are on the rise."

Wrinkle Shot is also hugely profitable.

Pola Orbis' consolidated net profits for the year through December are forecast to increase by 36% on the year to 23.8 billion yen, a record.

Although the product is on course to become the biggest hit in the cosmetics industry this year, the path to the development was not a straightforward one.

Final straw 

Pola started working on developing wrinkle-improving cosmetics in 2002.

Noriko Suenobu, leader of the four-member research team at Pola Chemical Industries, often found herself on the verge of giving up. She recalled feeling many times that this could be the last straw.

The team's first mission was to pin down the mechanisms of wrinkle formation.

Suenobu said her work for two-and-half years involved looking through microscopes to sort it out.

The team identified the culprit of wrinkles as neutrophil elastase, an enzyme secreted when a mild inflammation occurs as a result of ultraviolet exposure.

They found that this enzyme breaks down dermal components such as collagen and elastin, which play an indispensable role in providing skin firmness.

Because aging slows skin regeneration, wrinkles are likely to become permanent as time goes on.

In the belief that minimizing this process could reduce wrinkles, Suenobu and other team members collected about 5,400 kinds of ingredients used in foods and medicines and spent a year isolating what would become Wrinkle Shot's active ingredient.

NEI-L1 fuses with neutrophil elastase to inhibit the breakdown of dermal components. A 12-week trial of the serum found that in 70% of users, wrinkles at the corners of the eyes and other parts of the face became more shallow.

The average deep wrinkle has a depth of 100-200 microns. After the 12-week trial, the team said, the wrinkles had become an average of about 13 microns shallower.

But NEI-L1 easily combines with water, so it dissolves and melts in the water-based skin care products.

To discover how to make the ingredient insoluble, the team made the rounds of research institutes and doctors, seeking their advice.

But after four years, critics within the company said it was time to call it quits.

Ice cream inspiration

The team broke the deadlock thanks to chocolate mint ice cream a member was eating one day.

Drawing attention to chocolate chips that are mixed into ice cream without melting, the idea that came up is that NEI-L1 should be mixed into a base material that does not contain water -- like the chocolate chips are into the ice cream.

When the active ingredient and a base material were mixed to creamy consistency, the result was surprisingly good.

Even after this technological hurdle was cleared, however, there was another problem -- approval from the health ministry.

Since the product uses an entirely new ingredient, the screening process had to be handled more carefully. A Pola official said the process has become even stricter since Kanebo Cosmetics' skin-whitening products caused a scandal in 2013.

The team scrambled to amass data proving the product's safety. According to Suenobu, it took "eight years, or twice the time usually needed," to go through the process from submitting the application to receiving approval.

When the product earned a high evaluation at the early stage of its launch, she said, "all the team members cried" with happiness.

Other companies are racing to develop their own versions.

Rival Shiseido  also released in June a product touted as a cure for wrinkles under its flagship Elixir brand.

Elixir Superieur Enriched Wrinkle Cream S contains "pure retinol," which the company has researched for many years. The 15-gram product is priced about half as much as Pola's, at around 6,000 yen.

About 680,000 units of the Shiseido product were shipped in the first month after the launch.

Although the company aims to sell 1 million units by the end of this year, the number is expected to eventually surpass 1.2 million.

Kose and other makers are reportedly developing a similar product in the area of medical cosmetics.

Pola's research and development system pales in comparison with rivals'. While Shiseido has 1,000 or so researchers, Pola Chemical Industries has a little more than 100 such personnel.

Still, Pola President Yoshikazu Yokote expressed his determination to "actively invest in R&D and raise its ratio to the sales to more than 2%."

In its business management plan through 2020, Pola Orbis said it will take advantage of "the R&D that channels resources into skin care field."

Even if the race to develop a wrinkle-improving product intensifies, Pola has its strength in its original ingredient.

The company plans to develop new quasi-drugs containing NEI-L1.

The ingredient, Yokote said, "can possibly be used in not only cosmetics but also supplements."

Ace in the hole 

One of the Pola Orbis' strengths was until now the sales capabilities stemming from its direct connection with customers.

Currently, the company has about 4,600 stores around the country and a network of more than 40,000 commissioned salespeople known as "beauty directors."

It still maintains a strong image as a door-to-door seller even though that business model has declined with the times as women are more likely to work away from home and sales channels for cosmetics become diversified.

Conventional door-to-door sales now account for slightly more than 10% of Pola's sales, declining from 80% to 90% during the early 1990s.

Wrinkle Shot addresses this problem, Yokote said, as the wide appeal of wrinkle-fighting products should help Pola Orbis expand its customer base.

While further growth of the domestic market cannot be expected due to Japan's low birthrate and aging population, cosmetics majors are scurrying to open up foreign markets.

Pola Orbis has set a target of raising the overseas sales ratio to 20% by 2020 from the current 8% level.

Wrinkles are a universal concern among women; many of the visitors at the Pola The Beauty Ginza shop are Chinese.

The company is gearing up to raise the profile of Wrinkle Shot abroad, with sales in overseas Asia expected to start as early as 2019.

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