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Despite Slumping Japanese Economy, Expensive Cosmetics Fly Off Shelves - 2003-05-19

Japan's economy may be in a slump, but it does not show at the cosmetics counter. Japanese women are happily paying hundreds of dollars for tiny jars of luxury face creams. Cosmetics makers are rushing to put out new products with eye-popping prices.

Shigemi Konaka, a 43-year-old office worker in Tokyo, spent last year's bonus on a beauty item she has long coveted.

She bought Cle de Peau la Crčme, a face cream made by Shiseido, Japan's largest cosmetics maker. Ms. Konaka says she never hesitated over the price: $450 for 25 grams, more than the price of gold. "I thought it would be good to invest for myself. I can no longer be lazy keeping my skin condition because of my age. The cream is light and has a smooth texture. It works really well and I am very satisfied with it," she says. "It is worth spending that much considering the big difference I can see on my face in one night."

After six months, she finds she cannot do without the cream.

While supermarket sales, a key gauge of Japanese consumer spending, fell 4.2 percent in December from the previous year, sales of beauty products are climbing. Shiseido reported sales for it pricey cream rose 20 percent last year from the year before. The company expects brisk sales to continue this year.

Ryuko Shioya, Shiseido's spokeswoman, says "the cream is popular among women in their late 20s to 40s. They buy it because they can easily recognize that their skin is being revitalized in short period of time."

She says the cream is expensive because of its image and development cost. The cream is made up of nine types of enzymes, which Shiseido says help get rid of wrinkles and maintain good skin condition.

Japanese women increasingly hold jobs outside the home, and most young women stay single well into their late 20s and 30s. That means they have disposable income and they use it to buy expensive products as a reward for working hard.

Shiseido released its line of posh face creams about two years ago. Since then, rival companies have followed suit.

Kose, another cosmetics company, sells its top face cream for $750 for 45 grams. The company says it is enjoying unexpected sales growth.

According to data from cosmetics maker Kao, Japan's cosmetics market was worth nearly $10 billion in 2001. Skin care products are the biggest sellers, unlike in Western countries, where fragrances dominate sales. Marketing strategists say in Japan, a perfect complexion is a symbol of beauty.

Japan's demand for high-end products is luring foreign companies, such as the L'Oreal Group of France and Procter and Gamble from the United States.

L'Oreal introduced a series of expensive creams last year. The company is surprised that its most pricey cream, Prodigy, has been a success, even though it sells for $150 a jar.

Yumiko Kikuchi, a spokeswoman for Helena Rubinstein, one of L'Oreal's most expensive brands, says "Japan is the top market, making 20 percent of the Helena Rubenstein's profit. That is because Japanese women have high passion for using cosmetics to polish themselves. In other countries, older women spend more money for themselves. But Japanese young women are fashion conscious so they show strong interest in luxury items."

A recent on-line survey in Japan showed that most Japanese women can pay up to $160 for face cream. About 10 percent say they can spend $450 or more.

Well-known Japanese beauty expert Kaori Yakou says the fancy creams are worth the price. But she adds that they do not always match every woman's skin type. Some women are allergic to the chemicals in the creams.