On 18th May 2018, Kao is clarifying its brand portfolio by leveraging influencer marketing to include known personalities in its strategy. Through refining its collection of brands, the company aims to boost its expansion rate in both Asia, including Japan, and Europe.
Strategic projections
The company has set a sales target of over 300 bn yen for 2020 (€2.3 bn), with an operating profit ratio of 10% and overseas sales ratio of 25%.
Led by company President, Michitaka Sawada, Kao has now created a New Global Portfolio as part of its growth strategy via Kao Group Cosmetics Business. Through this build, Kao Group has selected eleven global strategy brands, including new entries.
The chemicals and cosmetics name is leveraging emotional and sensory appeal to emphasise its scientifically-backed product benefits and qualities to attract and target beauty consumers.
Prestige versus mass
Kao is currently experiencing growing cosmetics sales in Japan and the rest of Asia, particularly from its prestige names RMK and SUQQU, skin care brand for dry and sensitive skin Curél (Kao), Kanebo’s freeplus and Kate.
The cosmetics market in Japan is currently experiencing strong domestic consumption and the rise of inbound demand from overseas visitors. While a story of two markets: mass and prestige, the prestige segment is responsible for driving a significant portion of the cosmetics industry growth. Prioritising prestige ranges, Kanebo Cosmetics will steer towards its aim of globalising SENSAI, the Kao-owned company that is typically marketed in Europe.
Globally, China is having a formidable influence over Kao’s growth in Asia, following a restructuring that has pushed sales and market gains.
Online, offline and travel
As part of Kao’s growth track, the business also needs to focus on consumer purchasing behaviour online and the demand for new marketing strategies. The company’s attention will now be placed on growing its travel retail business.
Its strategy incorporates repositioning local Japan brands as “counselling” and “self-service” brands, along with exploring the use of distribution channels.
By moving away from traditional definitions of ‘prestige’, ‘mass-tige’, and ‘mass’ brands, Kao will explore contemporary and personalised customer service methods. It will bring beauty counsellor retailing in store and introduce “self-service” categories.
To strengthen its brand position, Kao will also review its manufacturing and sales methods. Offline, these will namely include customised suggestions and sophisticated, specialised training. Digitally, Kao will establish a proactive approach to maximise engagement and sales on its e-commerce platform.