Japanese health and beauty products, once seen as the gold standard for safety and quality in China, are starting to lose their luster in the world’s largest consumer market. Online sales of products from Kobayashi Pharmaceutical Co. dropped 54% in the first half from a year earlier on Alibaba Group Holding Ltd.
’s dominant e-commerce platforms Taobao and Tmall, according to tracking platform Liandanlu Data, after its supplements made from red yeast were suspected of causing dozens of deaths. Shiseido Co. and other cosmetics makers have seen similar declines following the discharge of treated wastewater from a nuclear plant that has fueled consumer boycotts.
Japanese companies were once seen as the pinnacle of quality after years of scandals in China involving locally-produced food and medical products, such as baby formula and cooking oil. That spurred the country’s growing middle class to seek out alternatives offered by foreign brands. Now, with the Chinese economy decelerating and setbacks for the Japanese companies, a reversal of sorts appears to be underway, and consumers are turning to cheaper mainland rivals.
“There is no question that Japanese brands have to work harder against domestic brands in China that are delivering well-designed, quality products that adapt to market changes faster, are more targeted and are often better value,” said Mark Tanner, managing director of consultancy China Skinny in Shanghai. Sales for products from cosmetics giants Shisei.