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Japan-Update

Asian travelers stay loyal to Japanese cosmetics

Chinese repeat buyers providing double-digit boost to made-in-Japan exports

Shiseido aims to grow Chinese sales of its Elixir brand cosmetics, which are made in Japan.

TOKYO -- Japan's cosmetics exports surpassed the value of imports for the first time in 2016, surging on repeat purchases by Asian tourists after returning from their visits.

According to the Japanese Cosmetic Industry Association, exports climbed 28.8% on the year to 267.6 billion yen ($2.4 billion), doubling from the 135.9 billion yen recorded in 2013, thanks to double-digit growth since 2014. The total includes 

Exports to Hong Kong were the largest by value, accounting for 32% of the total, followed by 20% to mainland China and 13% to Taiwan. South Korea made up 11%, while Singapore accounted for 7%. Many products bound for mainland China pass through Hong Kong because of preferential customs rules. Exports to Asia made up 88% of the total.

Returning tourists drove these gains. Seven out of 10 Chinese visitors purchase cosmetics, according to the Japan Tourism Agency. Shiseido says about half of Chinese tourists buy its products again after returning home.

Although Japanese cosmetics companies have launched lines especially for Chinese consumers, with production sites in China, customers have shown strong demand for products made in Japan. Much of this buying is done in China's booming e-commerce sector, led by the likes of Alibaba Group Holding.

Against this backdrop, Japanese companies are increasing their domestic output capacities to keep pace with soaring overseas demand. For the first time in 37 years, Shiseido will open a new domestic plant. The facility near Osaka will lift domestic output capacity for basic skin care products by 50%.

Kose also bumped up its Japanese output capacity by 30%, as it prepares to increase production of its Sekkisei brand skin care product, which is popular in China. In March, it opened a new section at its mainstay Gunma Prefecture plant northwest of Tokyo.

Japan's cosmetics imports had overshadowed exports since 1985, when the industry group began collecting the data, with most products coming in from the U.S. and Europe. But imports slid 3.7% to 229.2 billion yen in 2016, helping exports win out for the first time.

(Nikkei)

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