Business Development of FANCL Corporation – As a Pioneer of additive-free cosmetics and health food business

Thursday, May 03, 2018

On the afternoon of April 13, 2018, at VNU Vietnam Japan University, a special lecture entitled “Business philosophy of FANCL Group - The pioneer in additive-free cosmetics and health food business” was delivered by the Vice Chairman of the Board of Directors cum Chief Executive Officer of FANCL Corporation, Mr. Kazuyoshi Miyajima.

This is part of a series of special lectures organized by VJU. Speakers of these lectures are scholars, politicians and executives of leading Japanese corporations. In this lecture, Mr. Kazuyoshi Miyajima brought to VJU students an exemplary business story of FANCL Corporation: Starting out of a mission to protect public health, FANCL has weathered seemingly insurmountable difficulties over the course of formation and development to rise as the leading business in Japan with unique business philosophy and strategy. 

Mr. Kazuyoshi Miyajima, Board Vice Chairman and CEO of FANCL Corporation

Product quality as the determinant in winning customers’ trust

FANCL’s entrepreneurship idea is driven by negative effects of cosmetics. In the 1970s, cosmetic damages to the skin became a critical problem in Japan. With components such as parabens and additives, instead of enhancing the users’ natural beauty, the products caused skin irritation, cell damage, and accelerated skin’s aging. From his own wife’s skin problems, Ikemori Kenji, the founder of the company, was determined to build FANCL with the desire to bring safe products to its users.

The biggest highlight of FANCL is providing a full range of activities covering all stages from research, production, release of goods and last mile distribution to the stores. This helps the company strictly control the quality of its products.

As a testament to FANCL’s stringent quality assurance is that in early days, most of the company's products were in the form of small-sized 10-milliliter vials. The purpose of this is to ensure that customers are able to use them up prior to deterioration, normally within a week, although this increases the cost of production. In order to increase the volume from 10ml to 30ml as it is today while maintaining the quality of products, FANCL has had a track record of R&D excellence for over 30 years. According to Kazuyoshi Miyajima, “This is the key to helping us build our customers’ trust.”

Customer-centric - The tactic to overcome all difficulties

In its business history, FANCL has experienced numerous difficulties. When it started developing food supplements extracted from honey at affordable prices, the Company has encountered a wave of protest, accusing them of dumping because this product line is normally sold at a high price in Japan. However, Ikemori knew that in the United States and other countries, these food supplements were available at a reasonable price, and so FANCL persisted in maintaining the price which best reflects production costs. Besides, FANCL also changed the name of the product to Supplement, which precisely captureits meaning as a nutritious supplement product. This has helped FANCL’s products establish their strong position in the market and become a popular brand name among Japanese consumers.

When first making its debut, given differences with the products then available on the market, FANCL’s additive-free and preservative-free cosmetic line raised some suspicion: Whether they were really free from any preservatives with only the date of manufacture being stated, not the expiry date (although FANCL recommended that users only use the product within 1 week after opening the lid). While similar products are packed in 50ml to 125ml packs, FANCL’s product was only about 10ml, was it standard or not? Beyond all of these doubts, FANCL managed to reinforce the user experience. The users’ reviews confirmed the quality and value of products manufactured and distributed by FANCL, helping FANCL continue thriving in the market.

Unique business philosophy - the path to success

In his lecture, Vice Chairman Kazuyoshi Miyajima shared two special business philosophies of FANCL corporation: “Business means innovation,” and “Standalone business line cannot sustain.” These are all philosophies and messages of founder Ikemori Kenji, which are inherited and developed by the company up to today.

With innovation, no copycat mindset, FANCL has pioneered the development of additive-free and preservative-free cosmetics and food supplements. Cosmetics are packed in Ample vials, with no expiry date, and made available to the customers via postal delivery or lastmile delivery... All are the first in a line made possible by FANCL in the cosmetics industry.

“We hope that once you are in the business, everyone shall pursue independence, innovation, self-identity, and always lead the way,” said Kazuyoshi Miyajima.

He also added: “In an ever-changing society, business cannot stay the same. If you focus only on one product line and a rigid business philosophy, your business will become obsolete sooner or later. So, do not be satisfied with present, always aim to seize new opportunities and come up with new business ideas.” This belief also drove the company’s decision to expand beyond conventional boundaries to food supplements business and made a success, despite many difficulties in early days.

Opportunities for young people in Vietnam in general and VJU students in particular

FANCL’s success is not restricted to Japanese market, it also built franchises in Korea, Hong Kong, Thailand, China and Taiwan. At the same time, through Sephora cosmetic distribution system, FANCL's Boscia brand products have grown in North America and Asia and the Middle East.

With the aim of developing in the international market, Kazuyoshi Miyajima said that FANCL always open the door for human resources from other countries, especially Vietnam. Vietnamese staff working and researching at FANCL are highly regarded and the Group looks forward to recruiting more high qualityhuman resources from Vietnam.

At the end of the lecture, Kazuyoshi Miyajima said: “It is delightful to see many students in Vietnam Japan University love Japan and look forward to working in Japan. You are always welcome at FANCL. People grow through their jobs. With work comes good things and bitterness and challenges, but hardship will more or less help us grow. I hope you can do whatever you find interesting.”

In appreciating the lecture by Vice Chairman, VJU Rector, Prof. Furuta Motoo shared his thoughts: “Vietnam Japan University attaches great importance to the effective and practical training quality. Therefore, the companionship of such industry leaders in high tech applications as FANCL is extremely essential for the students and brings them with new opportunities.”

This special lecture will not only help VJU’s students in particular and interested participants in general to update and accumulate practical knowledge about one of Japanese leading businesses, thereby also creating motivation for learning as well as contributing to shaping personal development in the future.

FANCL is a Japanese company specialized in the research, production and sales of cosmetics and functional foods. The company was established in 1980 with the main products being cosmetics. However, their products are not merely normal cosmetic products, but natural cosmetic ones with no added ingredients and chemical additives, preservatives. The business philosophy of FANCL is to apply advanced technology towards the sustainable development of enterprises as well as the society.

Currently, FANCL is headquartered in Yokohama, Japan, with more than 430 local and international brand stores, with annual sales of up to 1,000 billion yen. In Vietnam, FANCL is present in over 160 Family Mart stores as well as Aeon Mall.



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