Japanese cosmetics losing their luster
By Park Si-soo
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Song Hye-kyung, a 40-something career woman with sensitive skin, was a big fan of Japanese cosmetics brand SK-II for many years. However, she recently replaced everything on her dressing table with products from Estee Lauder, an American skincare brand.
The reason: safety.
“Since the nuclear accident in Japan in 2011, I’ve constantly worried about the safety of Japanese cosmetics,” she said. “Nevertheless, I kept using SK-II because there was no immediate alternative. I recently found one though.”
Song said many women had stopped using Japanese cosmetics for the same reason.
“I can tell that Japanese cosmetics are very good in quality, but the biggest problem is that their safety has yet to be verified,” she said.
Korea imported Japanese cosmetics worth $219.2 million in 2012. This shrank nearly 22 percent to $180.6 million last year, according to the Foundation of Korea Cosmetic Industry Institute. The downward trend is expected to continue for a while, it said.
SK-II is one of the brands hit hardest. It was one of the best-selling imported products in Korea in 2012, outselling Louis Vuitton, Chanel, Cartier and other popular luxury brands in terms of domestic sales. In particular, SK-II’s essence and other basic skincare products were considered must-have items among adult women despite the relatively high prices.
SK-II yielded its leading position to non-Japanese brands last year and was continuing to lose its customer base in Korea, industry observers said. Other popular Japanese cosmetics brands such as Shiseido, Hadalabo and Kiesme were also suffering from a drop in sales, they said.
“The nuclear accident is widely considered the biggest reason for the sharp fall,” a department store sales clerk said, on condition of anonymity. “Japanese companies have tried hard to rebound with a variety of marketing and promotional campaigns. But they all seem to fall short.”
Amid falling sales, Japanese cosmetics firm Orbis decided to shut its Korean office in February. Another brand, DHC, closed 10 outlets here last year in an aggressive cost-cutting drive. Instead, it is now trying to increase sales through cost-efficient online shopping malls.
However, the number of people who buy cosmetics directly from Japanese online shopping malls is also falling.
According to the Korea Customs Service (KCS), Koreans bought nearly five million products, valued at $480 million, at overseas online shop between January and April.
By nation, the United States came first with 3.67 million products, followed by China with 570,000, Germany with 240,000 and Hong Kong with 210,000. Japan was far behind with 100,000 products, which is only two percent of total transactions, according to the KCS.
“Overall, Japanese companies are facing a tough time doing business in Korea,” an industry insider said.
“It’s uncertain how long this situation will continue, but it’s clear that the nuclear accident has caused sizable and long-running damage to Japanese companies.”