The Foreigness of the Japanese

Recently my family and I were travelling in Europe. While there, it was difficult to ignore the prevalence of natural body odors. Getting back home to reseach, I focused on the geographic differences in the personal care area. But despite the notable difference in smells, the financial differences between the U.S. and Europe personal care segments were only slightly different. The real difference is between Japan and everyone else.

Estee Lauder presented a study comparing the sales of prestige cosmetics to females 15 and older in various markets. It was no surprise that the low end of the scale was held by India with $0.43 per female, next by China at $1.19 per female and up to Russia with $9.03 per female in the developing world. In the developed world, the U.S. and the U.K. were close with $113.22 and $116.96, respectively. The shock was Japan at a whopping $236.82 per female.

Sensing an investable idea, I invested more time in the Japanese cosmetic area and found other facts about the Japanese. 85% of Japanese women between 18 and 65 dye their hair. Only 2.3% of Japanese women between 16 and 64 feel good about their skin. And Japanese women use 50-100% more cosmetic products than other women in the world.

Interestingly, the high expenditures per female seems to have not increased their sense of self worth. Nor have these expenses increased the birth rate or the rate of sexual activity. In a recent survey, the Japanese had, by a huge margin, the lowest rate of sexual activity in the world at 45 times per year against a world average of 103 and a U.S. average of 113.

After this research, I began to sympathize with the management of Colgate-Palmolive (CL). CL views Japan's markets as so foreign that this personal care powerhouse sells only one product in Japan: Hill's pet food.