Kao engages influencer strategy as tourist numbers plummet

Japanese cosmetics maker Kao is fighting back against loss of sales from tourists, in particular from China, by turning to influencers there to open a new revenue stream.

Kao, which traditionally specialised in department-store sales, has not focused heavily on online sales previously, is teaming up with Chinese social media influencers who buy the Japanese company’s cosmetics in bulk and resell them. Such resellers now make up a significant part of e-commerce sales of cosmetics in China.

The details

• Tourist demand for cosmetics, which stopped when the pandemic began, is not expected to recover in the near-term; but private sellers offer a sales route that doesn’t rely on tourists.
• Kao is signing up resellers and influencers via Tokyo company TrendExpress, which provides logistical support for e-commerce operations in China. Private resellers will be free to set their own prices, but because orders will be sold to them and fulfilled via TrendExpress, who will take a cut, this gives Kao some control over pricing and avoids deep discounting, thus preventing their “high-end image”.
• Kao’s model is being watched closely. Japanese business has been something of a laggard in adopting the influencer model to drive sales, certainly compared to the US and China. And it’s thought the Kao method could soon be adopted by Japanese brands outside the cosmetics sector.

Key facts

The online market for cosmetics in China is now worth around $43.8 billion, according to Kao. And a third of that is reported to be made up of sales via influencers and private sellers who buy in bulk and resell – such a significant volume that major brands can no longer ignore it.

Sourced from Nikkei Asia