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By Meg Flippin, Benzinga
The Japanese beauty market is growing as consumers from the U.S. to England seek to get their hands on a class of products with a reputation in the marketplace for being high-quality, effective and long-lasting. These beauty products also offer consumers a minimalist approach to skincare instead of a multi-step, complicated morning and bedtime routine. It is something consumers are increasingly embracing.
Endorsements from social media influencers and celebrities are also helping drive demand for Japanese-based beauty products in the U.S. and beyond. As of 2022, the global J-beauty products market size was valued at $33.11 billion and is projected to grow at a CAGR of 3.9% from 2023 through 2030.
That strong demand for J-beauty products is an opportunity for Japanese health and beauty companies including Yoshitsu Co., Ltd. (NASDAQ: TKLF). The company makes and sells beauty, health and household products to consumers and businesses, operating physical and online stores in Japan, Hong Kong, China and Korea. Yoshitsu also operates franchise stores in the U.S., Canada and the U.K. and is focused on expanding more in the U.S., building on the momentum it had in 2023.
USA In Its Sights
Our primary focus in 2024 will be on brand expansion, particularly in the United States. We plan to open more flagship stores, offering an unparalleled shopping experience that showcases the essence of our brand, Mei Kanayama, the principal executive officer of Yoshitsu, said in a recent letter to shareholders. Building on our successful launches in 2023, we plan to inaugurate more direct-sale stores in key cities including New York, Boston, Las Vegas and Los Angeles. The move is a critical step in our global expansion strategy. We expect these stores to not only serve as retail outlets but also as cultural ambassadors of the unique value and exceptional quality that Yoshitsu represents. We hope the flourishing of our direct-sale model will develop deeper customer connections and enhance our brand awareness in the local market.
Yoshitsu is taking a multi-prong approach to build its brand awareness in the U.S. and drive sales. For starters, it is inking alliances with established retailers in the U.S. to get the word out about its products. Among these alliances is Yoshitsus deal with CROSSING Inc., the Los Angeles-based collectible card retailer and live-streaming distributor.
As part of the deal reached last fall, CROSSING has the exclusive rights to procure and distribute Yoshitsus products through its sales channels including live-streaming e-commerce channels and online shops. Seen as a springboard for future similar alliances, Yoshitsu said at the time that the alliance is a mechanism to amplify the companys visibility in the U.S. market, elevate its brand and drive customer demand.
Reaching US Consumers Directly
In addition to selling its products through partners' sales channels, Yoshitsu is also reaching consumers directly in the U.S. by opening up retail locations in big cities around the country. The goal is to launch stores in New York, Boston, Seattle, Las Vegas and Los Angeles. In December it opened its first U.S. store in Seattle near the University of Washington. The U.S. flagship store is 6,000 square feet, featuring a range of more than 8,000 in-stock items, and is located near the expressway and the light rail station, which enhances accessibility, the company said.
To cater to local customers, Yoshitsu said the store sells a lot of tech-related products. In New York, Yoshitsu plans to focus on introducing a variety of cosmetics that cater to international tastes, and in Las Vegas, the store displays and counters will be full of products for customers traveling to Sin City.
The goal with its U.S. stores is to stock them with a diverse portfolio of products including cosmetics, skincare, over-the-counter drugs, nutritional supplements, home goods, food and alcoholic beverages. The stores will also have a local warehouse to support operations. Yoshitsu also created two new subsidiaries in the U.S.: Tokyo Lifestyle Holding Inc. and REIWATAKIYA BOS LLC. The company said it will use the two units to grow in the U.S., streamline international logistics and improve cross-border communications. With a local U.S. presence, the company has established a broad U.S. presence to better meet domestic U.S. market demands.
Launching our direct-sale Stores in the U.S. is a transformative step for Yoshitsu. By streamlining operations in-house in the U.S., were not just aiming to build closer ties with the U.S. market, but we are also seeking to enhance operational control to improve our service standards, said Kanayama. We believe that the opening of the Stores will be instrumental in elevating our customers shopping experience, from their initial interaction to post-purchase support.
Featured photo courtesy of Yoshitsu.
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