TOKYO - Kao, a leading Japanese manufacturer of daily necessities such as detergents and shampoos, had been struggling with declining earnings for four consecutive years. However, for the fiscal year ending December 2024, the company has seen a turnaround. What triggered this recovery? The answer lies in Kao’s focus on the high-end segment of the hair care market, where its share had been a mere 1%. The key to Kao's comeback was found in the strategies of a rising startup brand.
That brand is I-ne, established in 2007, which has launched a series of hit hair care brands such as Botanist and Yoru, generating annual sales of around 10 billion yen. I-ne’s strength lies in its effective use of social media marketing, including visually appealing graphics that stimulate consumers’ sense of smell and desire to share online.
I-ne’s success is driven by a marketing philosophy that blends art, craft, and science. The "art" element emphasizes originality that appeals to intuition and aesthetics. "Craft" represents high-quality product development, while "science" involves data-driven analysis and improvement. Among these, I-ne places particular emphasis on art. With an in-house creative team of about 80 members, it designs packaging and advertisements that consumers want to share on social media. One example is Yoru’s “nighttime beauty” concept, which resonated with busy Japanese women and generated significant online buzz.
In terms of craft, the company conducts sensory evaluations using panels to refine memorable fragrances that are likely to go viral on social platforms. Finally, the science element ties all these efforts to actual sales by analyzing how social media engagement translates into revenue.
Inspired by I-ne's approach, Kao launched a sweeping reform of its hair care business. As part of this strategy, the company introduced high-premium products. Since the spring 2024 launch of its new brand Melt, cumulative shipments have reached 2.5 million units. The subsequent release of The Answer in autumn 2024 also became a hit, surpassing one million units in shipments within seven months of its launch.
The influence of I-ne is particularly evident in Kao’s use of social media. When devising its marketing plans, Kao closely studied how influencers post, the volume and balance of advertising, and other tactics. In addition to leveraging its long-standing research capabilities, Kao adopted I-ne’s social media-driven methods to revamp its marketing approach.
Rather than focusing solely on product functionality, Kao shifted to a strategy that appeals to consumers’ emotions — how they want to feel after making their hair beautiful. This emotional marketing approach has contributed significantly to the recent success of its new products.
Kao acknowledges the importance of learning from emerging companies employing novel marketing techniques. Going forward, Kao plans to further strengthen its high-premium lineup, aiming to expand the share of high-end products in its portfolio from 1% in 2023 to about 45% by 2027.
Source: テレ東BIZ
