#Japan #Osaka #Beauty Industry #ReView #Salon Trends

Understanding the Structural Changes in Japan's Beauty Industry

In a recent study conducted by Review, an Osaka-based data provider, it was revealed that the beauty industry in Japan is undergoing significant transformations amidst a notable reduction in new openings. The report, titled "National Beauty Business Opening Ranking Report ver5," analyzed data from 938 newly opened beauty salons between January and March 2025, uncovering vital trends impacting the current and future landscape of the beauty sector.

Key Findings from the Report

1. Shift Towards Beauty Salons: The number of beauty salons has surged to approximately 14 times that of barbershops, highlighting a growing preference for beauty services over traditional barbering.
2. Urbanization and Specialization: While urban areas continue to attract new business, rural regions are witnessing a rise in small-scale, specialized salons, catering to local needs.
3. Evolution of Business Models: A significant trend noted is the rise of share salons and freelancers, which reflects a diversification in business models. This is also coupled with a shift towards experience-driven services that prioritize customer satisfaction.
4. Social Media's Impact: Platforms such as Instagram and TikTok have become essential for attracting clients, reshaping how beauty businesses approach marketing.

The Current Landscape

The data illustrates a drastic decrease in new salon openings from previous years, with only 938 salons launched from January to March 2025, dramatically down from 2,097 in 2023 and 1,869 in 2024. Despite this reduction, the landscape is not merely retracting. Rather, it signifies a turning point in how beauty businesses operate and appeal to their customers.

Regions such as Tokyo, Osaka, Aichi, Kanagawa, and Saitama topped the ranking for new openings. These areas share characteristics such as high population density and a strong beauty consciousness, facilitating the establishment of trend-driven and high-sensitivity salons capable of thriving in competitive markets.

• - Tokyo embraced specialized salons, creating niches for services like Korean-style beauty and men’s grooming, primarily driven by digital marketing strategies.
• - Osaka showcased a balance in salon types, catering to both high-end trends in commercial areas and accessible options in residential locales.
• - Suburban areas like Aichi, Kanagawa, and Saitama focused on family-friendly salons, emphasizing comfort and trustworthiness—a trend that resonates well with local clients.

Navigating the Challenges Ahead

Amid these changes, Review identified three key factors crucial to the success of future beauty businesses:

• - Brand Strength and Digital Transformation (DX): Building a robust personal brand and optimizing customer relationships through data management is vital in the move away from traditional location-based competition.
• - Low-Risk Independence Models: Options like share salons and freelance engagements allow salon professionals to minimize initial investments while adapting to new operational frameworks.
• - Experience Value Design: Businesses need to focus on providing unique experiences that go beyond price competitiveness. Salons that can establish themselves as a 'third place' for community engagement are expected to thrive.

A New Era in Beauty Management

The beauty industry is no longer measured solely by the number of openings; instead, it’s transitioning to a model focused on how businesses operate and the unique value they offer to clients. After a sharp decline in new openings over the past years, this is not the end for the beauty sector; it represents a new beginning.

With rising costs and a severe labor shortage, the evolution toward a flexible workforce and various independent work models marks a profound change in the sector. In this context, the report points out that the competition's focus is shifting from quantity to quality, urging beauty professionals to leverage both digital tools and personal branding to adapt to the emerging landscape.

Conclusion

Review's insights aim to provide stakeholders in the beauty sector with valuable knowledge to recognize and seize new opportunities arising from these shifts. By remaining attuned to the evolving dynamics and leveraging data as both a mirror and compass for the industry, we can foster growth that is sustainable and inclusive for beauty professionals across Japan.

The full report can be accessed here.

About Review

Based in Osaka, Review is committed to providing actionable data and innovative solutions for businesses throughout Japan, ensuring that they can adapt to changing market conditions effectively.