Truth in advertising has never been a strong concept in Japan, but no one flouts it as boldly as the cosmetics industry, which is understandable, since makeup itself is a form of deception. One company’s antiwrinkle cream is said to “prevent aging,” an obvious impossibility, while the manufacturer of a particular “skin whitening” (bihaku) lotion claims that it “checks the growth of melanin cells,” which means, theoretically, that the lotion is messing with the genetic structure of those cells. Even if this were desirable (melanin cells grow for a reason), only a doctor could prescribe such treatment.
Clearly, many ads for “functional” cosmetics tell consumers that their products do things they can’t. Purely decorative cosmetics are less of a problem, since they don’t need to say anything except that they’ll make you more attractive, a claim that is so subjective as to be virtually meaningless.
And lucrative. Japanese women shell out close to 3 trillion yen a year for cosmetics. Major companies like Shiseido, which controls about 40 percent of the market, have gotten to where they are not so much through superior products but through careful manipulation of sales channels and regulations that allow them to charge artificially high prices. High prices are customarily interpreted as representing high quality, a myth that the cosmetics industry has been instrumental in perpetuating. As a matter of fact, cosmetics are enormously cost-effective. In retail terms, 1,000 yen worth of makeup requires on the average 40 yen in material costs. The rest is packaging, advertising, and profit.
Japan’s cosmetics industry was built on the back of the resale price maintenance system, which designated exceptions to the Antimonopoly Law and allowed certain industries to compel retailers to sell their products at prices “suggested” by the manufacturers. Since cosmetics were considered medicinal in nature, makers could require sales agents to peddle their wares through trained “experts” — those heavily made-up women who staff the cosmetics counters you see on the ground floor of every department store. Eventually, consumers came to believe, almost instinctively, that cheaper cosmetics were not only cheaper in quality but less safe as well.
Cosmetics ads in Japan have traditionally been simple and elegant. Iona has made a fortune with a campaign that features nothing but the profile of a woman with flawless skin. It worked 30 years ago and it still works now; or, at least it does for women of a certain age.
As long as the culture reveres youth and buys a certain media-created image of beauty, demand is never a problem. But as regulations eased in the early ’90s at the request of those damn Americans, famous foreign cosmetics became available at more locations and at much lower prices. It was inevitable that some retailers would try to make an end run around the resale system and offer domestic cosmetics at discount prices. Shiseido sued Daiei and some discount stores for selling its merchandise below the suggested price. They lost, and eventually the resale system was scrapped.
Something more was at stake here than simply propping up their price structure. Shiseido, Kanebo and the other high rollers understood that as soon as they cut prices to stay in the game, they would lose their “luxury goods” image. Nothing brings a company low like the appearance of having to compete.
Salvation has come from an unexpected quarter. Several years ago DHC, a cut-rate mail-order cosmetics maker, signed an exclusive deal with Seven-Eleven to sell DHC’s Petit line in their stores. It was believed that cosmetics would not do well in convenience stores, but Petit was a hit with younger women who had come of age after the bubble era and didn’t see any problem with paying less for makeup.
The big boys had no choice but to bring out less expensive lines of cosmetics for this new, expanding market. Last year, Shiseido released a cheaper line called C/O, but soon DHC broke its exclusive contract with Seven-Eleven and took advantage of its PR momentum to make deals with several medium-size convenience store chains. These chains decided to drop C/O, which seemed a little fancy for their shelves and whose sales performance had yet to be proven.
Shiseido apparently wised up. It recently came out with a new line of simpler products called Keshowakusei (Cosmetics Planet). The line was launched with an advertising campaign featuring singer Tomomi Kahala, who is famous for her absent-minded pronouncements and who, according to the press, has become even more of a space cadet (which planet?) since her breakup with superstar record producer Tetsuya Komuro. “While I was away from Japan,” she says, standing in a convenience store, “people started paying more attention to whiter skin.” She touts Keshowakusei with the admission, “If it were more expensive, I wouldn’t buy it.”
DHC’s commercials feature two young female TV personalities known for their tennen boke (naturally stupid) behavior, which is in great demand on variety shows right now. Whereas once upon a time cosmetics makers exuded sophistication, they now try hard to identify with women whose main “charm point” seems to be the empty space between their ears.
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