Success Stories: Ideas for Potential Players

B/CBiotechnology / Chemicals L’Oréal was established in Paris in 1907 and currently R＆D Nihon L’Oréal K.K. sells products in 150 countries. Globally recognized The world’s largest cosmetics manufacturer, brands including Lancôme, Maybelline New York and meeting the needs of Japanese women Helena Rubinstein, are all part of L’Oréal’s corporate for 40 years umbrella. Such brands are popular particularly in Japan, as reflected in its double-figure growth rates.

Although Nihon L’Oréal was established in 1996, its parent has a much longer history in Japan. L’Oréal tied up with Kose (formerly Kobayashi Kose) to sell products to beauty salons beginning in 1963.

From the beginning, L’Oréal has taken a very strategic approach to its business in Japan. At first, the company concentrated on products for beauty salons, figuring that if professional hairdressers thought highly of L’Oréal products, this positive perception would trickle down to general consumers and significantly increase brand recognition. Gaining the approval of professionals also boosted L’Oréal’s reputation for trustworthiness, high quality and commitment to authentic products and Water Shiny Diamonds, a global best-seller from services. The strategy rocketed the company to the top the Maybelline brand. of the market for salon products and gave it a broad base from which to launch consumer hair products and “Nihon L’Oréal is a subsidiary of a foreign company,” luxury cosmetics. explains President Marc Menesguen, “but we don’t simply import our products from overseas. Our success is the result of investing great effort into developing products in Japan, specifically for the Japanese market.”

1963 First agreement with Kose (formerly Kobayashi Kose) to sell products to beauty salons. 1976 Jointly established Lorecos with Kose to sell hair care products for the general market. 1978 Started sales of cosmetics brand Lancôme. 1983 Established R&D center in Tokyo. 1990 Established R&D center within the Kanagawa Science Park in Kawasaki City.

1995 Established basic R&D center in Tsukuba, Ibaraki Prefecture. Marc Menesguen, President and representative Director, 1996 Established Nihon L’Oréal K.K. Nihon L’Oréal K.K. states, “Our understanding of the unique nature of the Japanese market led to our current success.” B/CBiotechnology / Chemicals

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Not only is the Japanese cosmetics market said to be The L’Oréal Tsukuba Center, located in Ibaraki the second largest market in the world, Japanese Prefecture’s Tsukuba Science City, was the company’s consumers are very particular. For example, many only basic research center outside of France. With Japanese women feel that foreign skin lotions are not another large-scale research facility now operating in suitable for Japanese skin and that foreign lipsticks the Kanagawa Science Park in Kawasaki, L’Oréal has and eye shadows are made in colors that do not suit established a network that takes full advantage of the typical hues of Japanese skin. local infrastructure, allowing it to lay down deep roots in the country. L’Oréal’s brands have enjoyed unbridled popularity because, as Menesguen says, L’Oréal not only has a Menesguen believes that the process of adapting to history of over 40 years in Japan, the company has the Japanese market’s unique tastes and customs spent more than 30 years researching and investing leads to a “source of creativity” for the development heavily in the local development of products of world-class products. An example being a line of specifically for the Japanese market. Maybelline lipsticks (pictured) developed and released in Japan in 2001. The line went on to become a global hit, selling 55 million units worldwide. A product developed for Japanese women became a global mega-hit product. Organization in Japan

Consumer Products Division An alliance in 2000 with Shu Uemura Cosmetics, The division is concerned with the manufacturing widely known for its quality merchandise, resulted in and selling of cosmetic and hair care products to the L’Oréal group taking its first Japanese brand under the widest number of consumers through the company’s wing. supermarkets, drugstores, cosmetics and variety stores and is composed of 2 brands: L’Oréal Paris “Tokyo continues to grow in importance playing a and Maybelline New York. leading role for other Asian markets,” explains Menesguen. “That’s why the L’Oréal Group is very Luxury Products Division enthusiastic about our operations in Japan.” It seems The Luxury Products Division is composed of Lancôme, Helena Rubinstein, Biotherm, Giorgio that Japan’s importance as a creative center is Armani Cosmetics and Designer Brands increasing for the L’Oréal Group. Fragrance (Ralph Lauren etc). Its products are distributes through a very selective network of department stores.

Professional Products Division The division manufactures and distributes Japanese Operation professional products to be used and sold at beauty Established : July 1, 1996 salons. The division is composed of L’Oréal Capital : 12.65 billion yen Professionnel, Alexandre de Paris and Kérastase. Employees : 1,500 Business : Import, manufacturing, sale and marketing of La Roche-Posay Division cosmetics, perfumes, beauty and hair care products The division distributes adjunctive therapeutic Location : 1-20-2 Yoyogi, Shibuya-ku, Tokyo cosmetic products id the La Roche-Posay brands URL : http://www.nihon-loreal.co.jp through dermatologists and prescription pharmacies. Parent company : L’Oréal S.A. (50,000 employees)