Femtech, D2C and overseas market exploration focal points at FaB Tokyo’s 3rd meetup

BeautyTech.jp
Jan 23 · 10 min read

On December 13, 2019, FaB Tokyo’s third meetup event was held at the “piece of cake” event space in Aoyama, Tokyo. Representatives from seven startups based in Tokyo took part in a three-part panel discussion with investors taking on the moderator roles. One of the sessions was carried out in English and was attended by a diverse group of close to 80 participants.

The meetup was done in partnership with Japan Cosmetic Center (JCC), an association based in Saga Prefecture that works with overseas industry clusters, such as France’s Cosmetic Valley, to assist Japanese companies with their global business activities. For the meetup, JCC also set up a booth and held a presentation that outlined their mission and their current projects.

Besides, piece of cake, which offered the event space, had a session to introduce their company-targeted service “note”, a platform for creators to post content, and a special plan for startups. Within the community as a whole, piece of cake is supporting entrepreneurs from a variety of different angles, and at the meetup they made clear their intention to actively participate to grow together with startups.

At the beginning of the meetup, head of the FaB (Fashion and BeautyTech) Tokyo chapter Chloe Takahashi — who runs the online store Cosme Hunt, a San Francisco-based seller of Japanese cosmetics, -, talked about the FaB community of investors and startups who are working towards creating new value in the beauty and fashion industries.

Chloe Takahashi

Takahashi also gave an introduction to FaB, the community ex-Lancôme CEO Odile Roujol established and initiated, and explained how within just short of two years it had grown to encompass chapters in 15 cities around the globe — including, along with several cities in the US, Paris, London, Shanghai, and Seoul — and how membership had surpassed 3,000 participants.

Each meetup held in each of the chapters always deeply reflects the character and nature of the local city, and this was no different for the Tokyo meetup this time. The panelists aired their frank views on such topics as the difficulty of broadening services in a society such as Japan’s that, unlike in the West, still has strong conservative perspectives in regards to gender, plus ways of making products, relations with investors, and overseas strategies. The discussions reflected the high ambitions of Japan’s startups and their awareness of the problems they face.

Femtech in Japan is just getting started

The first panel discussion took on the topic of “The Femtech Trend in Japan”. Moderator Tomoko Minagawa, Principal at Global Brain Corporation, talked as a venture capitalist about the global femtech trend and in particular touched on the diversity of services in the US.

Also on the panel was Misa Nishimoto, CEO of Laundry Box Inc., a media commerce platform that sells women’s sanitary goods while also posting information and articles on women’s lifestyles centering around the theme of menstruation. In contrast to moderator Minagawa’s talk of the US, Nishimoto explained that “in Japan, when it comes to talking about menstruation or your own body, there’s a lot of hesitation and resistance to talking openly about it, even if it’s just between women. Also, the social climate doesn’t make it easy to just casually visit a gynecologist.”

All women have their ideas about female bodily issues, pregnancy, and childbirth, but not being able to speak up and share those ideas with others in many cases leads to women having to deal with them on their own. This is the reason Nishimoto says she launched Laundry Box; as a platform to “visualize this information and share it”.

Shiori Nishi (left) and Misa Nishimoto

Shiori Nishi, CEO of Sutelura which connects client companies and medical institutions and runs the oocyte cryopreservation service Stokk, similarly mentioned that despite how important it is for women to know their own bodies, there’s a severe lack of information. Nishi explained how in the US there’s currently an increase in companies — that include Facebook and Apple — which provide substantial support for egg freezing as part of employee’s welfare, and this has become a way for companies to retain staff as it leads to higher employee satisfaction and a lower turnover rate.

In Japan too, the freezing of eggs can allow more flexible life planning — including career planning — for those people who currently want to concentrate on their career and have children some time in the future instead, and it essentially allows them to plan following their own choices. It can also assist greatly in cases where treatment for infertility is required. Currently, the laws in Japan still need to catch up, but Stokk is aiming for the day when egg freezing is included in the employee welfare packages of Japanese companies as a matter of course.

Also on the panel was a representative from Dricos Inc., a company which is developing and selling the world’s first IoT custom supplement dispenser. Titled “fem server”, this service that they’ve started providing for women involves a custom device that prepares supplements mixed and extracted in accordance with the user’s hormone balance of their menstrual cycle, their lifestyle habits, and any physical issues they might have.

Tomoko Minagawa (left) and Yasuhiro Take

Dricos CEO Yasuhiro Take revealed that his business was born from the voices of users. “Many of our supplement dispenser’s customers are women, and the product has been developed in response to requests for supplements that ease problems involved with menstruation.”

Take went on to explain that “there are many devices for tracking biological data in people’s everyday lives, such as the Apple Watch, but the methods these devices recommend for improving a person’s physical condition are mostly associated with self-management, and so they don’t amount to sufficient solutions, with users feeling that these methods are no different than something they could have done all along. Looking at it this way, there aren’t many services giving you proper ways to resolve your issues.” He emphasized that Dricos uniquely excels at giving customers tangible supplement treatments each day for solving the different problems they individually have.

D2C as the counterculture of existing businesses

The second panel discussion covered the topic of “How D2C Startups in the Fashion and Beauty Industries Can Scale Up”, and featured in this discussion were Takuya Noguchi, CEO of Bulk Homme which runs the men’s skincare brand of the same name, and Tadayasu Kiyokawa, CEO of Oh My Glasses Inc., a company that handles Japan’s largest glasses and sunglasses online store and also manufactures and sells their original made-in-Japan brand. Both companies can be considered the current “backbone” of Japan’s D2C industry, having already been in operation for 7 and 9 years respectively. The CEOs talked frankly about their business management experience, including fund procurement and staff recruiting that they’ve so far worked hard behind the scenes while their companies have been expanding.

Takuya Noguchi (left) and Tadayasu Kiyokawa

Bulk Homme’s Noguchi asked moderator Akihiro Higashi, of venture capital firm W ventures, how big, from the perspective of investors, should startups aim to grow to in terms of “D2C scaling up”. Higashi answered by saying that generally in Japan “for an investor, the size for aiming to list on the stock exchange is around several hundred-million-yen profits through sales of several billion,” but he also added that, of course, there’s also the exit plan of being bought up by a large corporation for a handsome amount.

As the conversation moved to fund procurement, Noguchi advised that equity is not the only financial road and that one ought to also consider the option of debt (including loans from banks). Kiyokawa said that, based on his personal experience, entrepreneurs ought to meet with at least 50 people and explain their business to them, and Noguchi agreed, adding that “you can’t just give up after 10 or 20 people”. Both suggested that if you have the enthusiasm and do the footwork, you will eventually meet investors or financial institution employees that will consider your business’s potential.

In relation to staff recruiting, Kiyokawa revealed that for Oh My Glasses’s management team, the company promotes and appoints from in-house. They previously invited industry professionals from outside, however one reason they stopped doing so was because it was proving hard to permeate their company philosophy of “establishing a new common sense to change the glasses industry”.

Noguchi also asserted that “D2C is the counterculture to existing business ideas — it allows you to realize what you want to do. We can always train (new hires) in the skills they need, so what comes first is the company culture”. With this thinking, his company gathers staff who share the company’s ideology and cultivates them. Noguchi also expressed his pride in being a D2C: “From the beginning, we’ve been aiming to be the best men’s cosmetics brand in the world. We’re trying to become bigger by taking a route that nobody else has taken so far, so the opinions of industry veterans don’t really apply.”

Akihiro Higashi (left)

It’s predicted that D2C brands by major companies will increase from here on, causing the competition to heat up. So how do they plan to deal with this? Kiyokawa said that “we need to play a different game where we aren’t going head-to-head with these brands that have a lot of assets”. An example raised was, instead of relying on a so-called “prime location” with exorbitant rent, they could stay in a more modest, even hide out kind of setting but emphasize their individuality by using an original communication style.

Noguchi, who says that “other companies don’t have as sophisticated a marketing strategy as we do” stated his view that by continuing well-thought-out digital marketing thoroughly and carefully — as Bulk Homme has been doing so far — they have a sufficient chance of winning the game.

Ideas with originality are welcomed by the rest of the world too

For the first time FaB Tokyo tried out a panel discussion in English, and the topic for this session was “Japanese Startups Active Around the Globe”. Namiko Kajiwara, a partner with WiL, acted as a moderator.

From left, Namiko Kajiwara, Lina Sakai, and Shun Hashimoto

One of the panelists was Lina Sakai, President of Fermenstation Co., Ltd., a company that produces and sells premium ethanol sourced from organic rice that has been grown in idle paddy fields. Sakai said that a big difference between Japan and the rest of the world is the level of awareness towards sustainability and ethical practices.

Particularly in the West, where environmental movements concerned with climate change and marine pollution are seeing action at the citizen level, there is a lot of attention being given to clean beauty. Fermenstation’s work in offering ethanol, a common raw ingredient of cosmetics, as an organic material has been highly praised, and having been approached by a number of major global cosmetics brands, they are currently undergoing business talks.

Fermenstation is also using Japanese fermentation techniques to extract ethanol from the dregs of apples used in apple cider and using this in products such as room fragrances and sprays. Along with the established image overseas of Japanese products being healthy and high quality, their sustainable and waste-reusing production system has been supporting their advance into the global market.

Currently, the supply capacity of their manufacturing facility has reached its limits, and so they’re considering bringing their development techniques to production outside Japan. However, an entrepreneur from Europe who is currently running and investing in a beauty business based in Japan offered the opinion that in overseas countries there is a lot of value seen in the workmanship and unwillingness to compromise that is the bedrock of Japanese production, and so it’s best not to remove themselves from the “Made in Japan” label.

Also represented on the panel was Base Food that has brought conceptual foods over to the US, where such things haven’t been seen before, and have started selling them online. These foods are bread and noodles that contain a good balance of essential nutrients in one serving — including 26 vitamins and minerals, protein and dietary fiber — and are coined “Nutritionally-balanced Staple Foods”. Shun Hashimoto, Base Food’s CEO, said that he sees Americans’ current heightened awareness towards health and the ramen boom that has taken place in major US cities as helping to be an entry point to the first product they’ve brought out Base Noodles.

With their entry into the US, Base Food has set up an office in San Francisco with a team of three local employees. Hashimoto said that each of these employees, in resonating with Base Food’s concept, have chosen to participate as members of their own accord, and that the network these individuals possess in the US is playing an important role for the company. With complex regulations that differ per state, doing business in the US can be a headache, but their US office is helping them tackle these challenges.

At the end of the meetup, moderator Kajiwara invited two panelists to give a message to any Japanese startups that have their sights set on overseas expansion. Base Food’s Hashimoto, who had always planned from the beginning for his company to expand overseas, exhorted for them to “go abroad and meet people — their feedback is very precious”.

Fermenstation’s Sakai similarly called on startups to start moving and challenge themselves: “In the world, a huge market is there. Some will say to wait until you are really ready, but it may be too late.”

Text: Ching Li Tor
Original text (Japanese): Ayako Sogo
Top image and photography: © MIKA NAKAYAMA

BeautyTech.jp

BeautyTech.jp is a digital magazine in Japan that overviews and analyzes current movements of beauty industry focusing on technology and digital marketing.

BeautyTech.jp

Written by

BeautyTech.jp is a digital magazine in Japan that overviews and analyzes current movements of beauty industry focusing on technology and digital marketing.

BeautyTech.jp

BeautyTech.jp is a digital magazine in Japan that overviews and analyzes current movements of beauty industry focusing on technology and digital marketing.

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