Japan Consumer Products: Conference Call Takeaways: Watching for Impact of Fewer Chinese Inbound Tourists Amid Japan-China Tensions
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Goldman Sachs convened a conference call on April 2, 2026, featuring Tomonari Hamano, CEO of Novarca, a marketing consultancy specializing in the Chinese market. The discussion centered on e-commerce trends in China and the strategic positioning of Japanese cosmetic manufacturers. Hamano noted that while inbound consumption is impacted by a decline in visitor numbers from China due to rising tensions, no significant boycott activities have been observed within mainland China. In the short term, the critical focus is assessing whether tourists from other markets, such as South Korea and Taiwan, can offset the decline in sales driven by Chinese visitors.
The call also highlighted a cooling trend in social media buzz surrounding the 2026 International Women's Day (IWD) event on platforms like Xiaohongshu, with post volumes significantly lower than in 2024 and 2025. This signals a shift from pure sales-driven promotions to brand-building activities, as e-commerce platforms scale back aggressive discounting. Despite this, the broader Chinese cosmetics market is projected to grow at a stable CAGR of approximately 5% from 2023 to 2025. Channel dynamics are evolving rapidly; by 2025, Douyin (TikTok) is expected to surpass Tmall/Taobao and JD.com as the largest online channel by GMV.
Profitability on Douyin remains a key challenge due to its live-streaming-centric model. Margins depend heavily on whether brands utilize Key Opinion Leaders (KOLs) or deploy in-house staff for live streams, with higher in-house ratios improving profitability.