Made in Japan

Despite a history of producing goods solely for Japanese customers, some Japanese companies are making large investments into domestic production in an attempt to capture more of the global market. There has been a global trend, where “Made in Japan” products are seen as superior goods.

To illustrate with an example, the cosmetic company “Shiseido” expanded its domestic infrastructure by 45 billion yen from 2020 to 2022. It also plans on building another plant in Kakegawa and cancelling the closure of an Osaka factory. Shiseido has global appeal - my mom requested that I buy makeup for her and bring it back. However, the increased production abilities will still fall short of demand and will require additional investments. Another cosmetic company, Kose, is popular with Chinese tourists and is also expanding its domestic production. Cosmetics is expected to become the new multinational face of high quality Japanese products.

Other reasons for this shift to global markets include the rise of e-commerce business through Alibaba. Japanese companies are able to sell to foreign customers without having to invest into foreign infrastructure or sales.

How could this trend impact Japan’s economy? Currently Japan has a reputation for high quality exports like machinery and automobiles. So, this “Made in Japan” trend could be the start of Japanese companies capturing other foreign markets like cosmetics. Moreover, China recently surpasses the US as Japan’s number 1 export, so the rise of the Chinese economy could help kickstart the Japanese economy out of stagnation.