Asia Personal Care & Cosmetics Market Guide 2016

Shaving Prep
3.00 6.00 13.00 65.00
Price mark ups and the distribution of margins between the manufacturer, wholesaler, distributor and
others are dependent on the market channel. A summary of how prices are determined by channel
follows:
General Distribution
Manufacturer 20%, Distributor (Brand manager) 20%, Wholesaler 20%, Retailer 40%
General distribution channel is the most conventional channel, with products shipped from domestic
manufacturer to wholesaler to retailer. In this system, the manufacturer delegates distribution to the
wholesaler/distributor and supports marketing via advertising and promotion. For foreign cosmetics,
unless a Japanese subsidiary is established, foreign manufacturer relies on a distributor (often importer
of the record) that manages branding and promotions, keeps inventory and develops retail accounts. If
necessary, distributor relies on a wholesaler or sub-distributor for wider distribution outreach. Life-style
Brand Products
Manufacturer 70%, Retailer 30%
High-prestige brands, including U.S. and European brands, are usually placed in the company-owned
retail channel or in some form of voluntary chain store network employing a counseling-based selling
system (department store counters, cosmetics specialty stores, and boutiques). In such cases, the
manufacturer deals directly with its own accounts through its own sales force or subsidiaries that
manage branding, logistics and retail management including professional beauty advisors.
“Off-the-Shelf” (or “Self-selection”) Products
Manufacturer 40%, Wholesaler 20%, Retailer 25%, Discounts 15%
While products traditionally marketed through this channel (supermarkets, general merchandise stores,
drug stores, etc.) have typically consisted of daily necessities such as basic cosmetics and hair care items
at relatively low prices often come with discounts or mark down, the variety of cosmetics distributed
through this system is expanding. A wholesaler imports products directly and supplies them to retailers,
or an importer brings in a product from an overseas manufacturer and supplies it to wholesalers, who
supply the retailers.
Direct Marketing
Manufacturer 60%, Direct marketer 40%
The direct marketing channel includes traditional door-to-door sales. Avon, Amway, and Nu Skin are
traditional door-to-door companies having a legal presence in Japan. Also this channel includes TV
shopping, mail order (catalog) sales, and Internet shopping. It appears that growing numbers of
imported cosmetics (and/or importers/distributors) are focusing more on this channel because of its
relative ease to gain quick access to the market (consumers) compared to other channels.
Trends in US Imports and Competing Products