Coronavirus-hit Japan dumps high fashion for health and hygiene

TOKYO — Japanese consumers are spending more on masks, cleaning products and personal sanitizers while sales of makeup and motion sickness medicine take a major hit.

Cosmetic companies are seeing demand plummet for lipstick, rouge and other beauty products as social-distancing becomes the new norm. According to Tokyo-based market research company Intage Holdings, on-year sales of lipstick fell 69.7% in the second week of May while cheek rouge dropped 47.4%.

“Skin care becomes more important as people take measures against infection,” Masahiko Uotani, president of cosmetics giant Shiseido told reporters on May 12 at its earnings conference. The company sees consumers with sensitive skin using more skin care products due to increased mask usage.

Shiseido announced a 96% year-on-year dive in net income of 1.4 billion yen for the January-March quarter. The Japanese company has lately struggled with sales, especially in luxury brands popular with practically nonexistent Chinese tourists.

The company said it will adjust to the pandemic-ravaged landscape by focusing on skin care and e-commerce, prioritizing the former as it sees little change in skin care routines. According to Uotani, “Skin care does not diminish” despite the coronavirus, and “consumers are more interested than ever in ethical [consumption].” He said Shiseido will speed efforts to promote ethical behavior and health conscious products.

Consumer products maker Kao showed a 1% increase in net profit for the quarter ended March, thanks to surging sales of hand soap. But the Japanese company’s cosmetics business saw a 12% drop in sales and 60% decrease in operating profit from a year earlier. Cosmetics comprise about 20% of total sales.

Mitsuru Watanabe, a researcher at Intage, told the Nikkei Asian Review that “sales of consumer products such as makeup and shoe cream would not return to previous levels even after the coronavirus crisis ebbs,” as people will continue to work from home for about a year, lessening face-to-face meetings.

On the other hand, Watanabe projects strong sales of sanitary products as consumers become more aware of keeping themselves sanitized.

Kao rival Lion — the country’s top toiletry company, but one without a cosmetics business — posted net income of 13.55 billion yen for the January-March period, up 294% from the previous year on strong sales of hand soap in Japan, China, South Korea and Thailand. The company has nearly always focused marketing on proper hand-washing. Intage data shows that soap sales increased 73.1% year on year for the second week of May.

A Lion spokesperson told Nikkei that “frequent hand-washing will increase even after the coronavirus crisis subsides,” with sales expected to continue climbing. The company also sees a 23.5% quarterly year-on-year increase in sales of kitchen detergent, bathtub cleaners and other similar products. Intage also revealed that demand for floor wax and general cleaning products surged on year by 82.9% and 77.5%, respectively, as shut-in consumers spent more time cleaning house.

Another coronavirus winner, Japan’s top mask maker Unicharm, posted record sales and profit for the January-March quarter, up 9% and 50.7% from a year earlier. In addition to surging mask demand, the company benefitted from consumers stocking up on feminine hygiene products and disposable diapers.

Intage also found that consumers spent more on thermometers, with sales increasing 2.6 times from the previous year.

Meanwhile, sales of motion sickness medicine cratered 76% as travel sharply decreased, Watanabe said. Typically, the end of April through the beginning of May is a busy travel period due to Japan’s long Golden Week holiday.

Watanabe anticipates demand for motion sickness drugs will recover as the coronavirus crisis wanes and some people will start traveling.

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