Marubeni invests in Japanese cosmetics brand Osaji with luxury beauty “gold rush” prospects in Southeast Asia
30 Nov 2023 --- Japan’s Marubeni Corporation finalizes a significant capital alliance agreement with Japanese cosmetics house Osaji. The trading and investment conglomerate plans to allocate approximately ¥1 billion (US$6.8 million) in the skin care and makeup brand, which emerged as a spin-off from personal care company Nitto Elechemic last month.
Marubeni’s plans to expand Osaji’s reach into Southeast Asia include developing a facility in the region.
The firm looks to solidify its cosmetics business as a key pillar, targeting at least three to four annual acquisitions. Southeast Asia’s cosmetics market is growing by approximately 10% a year, making the region an attractive target for Marubeni.
“The doctors who attended the daimyo (feudal lords) and the shogun (military general and de facto leader of the nations) during the Edo period (1600–1868) were referred to as ‘osaji’ due to the fact that they used a saji (spoon) to mix medicines,” illustrates Osaji.
“Established in 2017, Osaji is a brand which is striving to become the modern-day equivalent of the osaji/doctor, supporting the health and beauty of lifestyles by complementing and enhancing the uniqueness of each individual user.”
Infusing skin care with Japanese soul
Osaji touts its brand’s incorporation of Japanese design, locally sourced raw materials, and a commitment to diverse consumer needs, coupled with an eco-conscious manufacturing ethos.
Marubeni aligns with Osaji’s vision of conducting “a business which is good to people.” In this collaboration, Marubeni aims to bolster Osaji’s development and production capabilities, expand its retail footprint and facilitate international expansion.
Furthermore, the collaboration seeks to serve as a model for regional industrial advancement by collaborating with local entities and governments.
This move aligns with Marubeni’s strategy, specifically its “Next Generation Business Development Division” established in 2019, which focuses on creating businesses that resonate with the evolving needs of future generations.
Looking toward Southeast Asia for Osaji’s expansion is a significant play. Many Japanese brands are dealing with waning Chinese consumer demand, largely in response to the release of treated water from the damaged Fukushima nuclear plant.
Shiseido, in particular, was recently hit with its most significant decline in 16 years. Personal Care Insights reported on the Japanese cosmetics giant’s move to slash its full-year profit outlook.
Luxury beauty sales are also pressured by the emergent “daigou” surrogate shopping culture in China and Korea.
Osaj’s foray into Southeast Asia is timely. Analysis from global consultancy Kearney and Luxasia shows the region, alongside India, is on the brink of experiencing a substantial “gold rush” in the luxury beauty market. It is expected to skyrocket to a market potential of US$7.6 billion by 2026.
The forecast suggests a nearly threefold increase in size over a decade, projecting a significant CAGR of 11% between 2021 and 2031.
While the Southeast Asian luxury beauty market is full of untapped potential, it also presents a number of challenges for brands.
The report points to challenges such as diverse market ecosystems, heterogeneous local product preferences, divergent marketing approaches, challenging regulatory frameworks, costly and idiosyncratic supply chain landscapes as well as access to information about local partner selection.
“At the same time, given the relative immaturity of the Southeast Asia and Indian markets, it is tough for brands to have complete information about the local context and partners,” flags the analysis.
Still, it sees the region’s large and growing middle class as an attractive market for brands that can overcome the challenges.
By Benjamin Ferrer
To contact our editorial team please email us at editorial@cnsmedia.com
Subscribe now to receive the latest news directly into your inbox.