With this, we hope to achieve double-digit growth in cattle, hair care and total sales every year. Aiming for 200 billion yen in 2027
The Japanese beauty and personal care company revealed its plans at a hair care business strategy briefing held on September 19th.
The hair care business as a whole is expected to grow by double digits every year.
Furthermore, we expect the hair color and premium products segment to grow at a higher rate than the overall market, at a compound annual growth rate (CAGR) of 7% and 13%, respectively.
“Kao is focused on accelerating our growth rate,” said Mayumi Moriya, President, Color & Styling, Hair Care Business, Kao Corporation.
“Kao is focused on the hair color and premium care markets, where consumers are seriously looking for high value-added products.”
Color: Low satisfaction category
Kao believes there is significant opportunity in the hair color category, where consumer satisfaction is generally low.
Mr. Moriya elaborated that hair coloring takes a lot of time and effort, which often causes stress for consumers.
Additionally, due to the advanced techniques and know-how required to get better results, the results may not match your expectations and the process may cause damage to your hair.
Furthermore, the barrier to entry into this category is high and the number of players is limited.
Goldwell and Riese are strategic brands important to Kao’s hair color ambitions. The former is a brand for professional salons, and the latter is a household brand.
“We would like to carry out organizational reforms in line with changes in the channel structure, effectively acquire the next generation of stylists, and continue to grow the hair salon brand “Goldwell.” Regarding Liese, an Asian home hair color brand, we would like to make the most of our technological capabilities and strengthen product development that meets the needs of Asian consumers,” Moriya said. .
In addition to two widely recognized brands, Kao is backed by hair coloring technology that has been cultivated over many years.
For example, the hair color foam found in Liese Creamy Bubble Color. It has been ranked No.1 in sales for 6 consecutive years from 2018 to 2023.
premium opportunity
In the premium segment, Kao will focus on three brands: Oribe, John Frieda, and Melt.
“Oribe is growing in Europe and in e-commerce, and we want to further accelerate that growth. In Japan, we will refine our sensory value and enter the premium market in Japan with the launch of a new brand. Finally, John Frieda is promoting further premiumization,” said Moriya.
The company’s strategy for growing these brands is to focus on products that meet the emotional needs of consumers.
“The common key to growth is to strengthen our brand philosophy and message to appeal to consumers’ emotions. Kao boasts top-class research and product capabilities. However, we are gaining market share in the premium market. “To do this, we need artistic elements that appeal to people’s emotions and capture their hearts,” Moriya says.
She elaborated that this approach was inspired by Oribe.
“OrderBay has achieved incredible results in the premium market. Fundamentally, our philosophy is to listen carefully to what our customers want and to meet those needs with attention to detail and without compromise. We have the same idea when it comes to product planning and development, and we call this the “Kao Way.” Oribe’s strength is that it incorporates the idea of art as part of its brand. Like Oribe, we started working in Japan to utilize this idea of art. ”
This year, the company launched a new premium hair care brand, Melt, for the Japanese market. We launched the brand with innovative products such as carbonated shampoo.
“Japan’s premium market is rapidly growing. However, until last year, there were almost no sales of premium priced products in Japan. However, after careful preparation, we will launch our new brand “Melt” in the spring of 2024. , we have made a full-scale entry into this market,” Moriya said.
The company considers Melt’s launch a success.
“It has been half a year since its release, and we have received very high praise from buyers, and above all, we have received many comments from customers who want to continue purchasing.Buyers have also said, “The Melt brand compares to new competing brands.” It was well received, with people saying, “It’s selling well,” says Moriya.
Kao plans to launch a new premium brand from this fall to next year.
Mr. Moriya said, “In addition to Melt, we would like to quickly launch second and third brands that are unique and attractive.”
