In the Consumer Products Business, sales declined because of the reactionary drop in spending that followed the surge in demand prior to Japan’s consumption tax hike in 2014. However, in the oral care and pharmaceutical fields, due to the shift toward value-added products, Lion’s component ratio of high-margin products has improved. As a result, profitability rose, and major gains were reported in operating income.
Lion’s major product fields and 2015 market positions in Japan
Note: Figures for market size presented above are based on retail sales data, and do not include sales of gift packages.
Source: INTAGE Inc., SRI survey, each category. Data from January through December 2015, on the basis of sales amount.
In the markets where Lion has a presence, in 2015, there was some impact from the reaction to the surge in demand prior to the consumption tax increase, and sales in unit volume terms were at approximately the same level as in the previous year. As a result of the continuing shift to value-added products, the rise in unit prices continued, and sales in monetary terms were up 3% above the previous year. Inbound market demand (generated by tourists visiting Japan) helped to stimulate overall demand and revitalize this market.
Under Lion’s V-2 Plan, the theme with highest priority is increasing profitability. Accordingly, Lion launched high-valued-added products in growing markets as well as products aimed at creating new markets with the goal of raising profitability.
In the oral care products field, sales of value-added and new products, including SYSTEMA Haguki (the Gums) Plus Toothpaste, Between Zeitaku Care Toothbrush, SYSTEMA Arch Fit Toothbrush, and other products were favorable. Lion’s growth rate in sales was greater than that of the market as a whole and contributed to market expansion. In the pharmaceutical products business, as a result of continued activities to nurture high-value-added items, sales of such products, including antipyretic analgesic BUFFERIN PREMIUM, Smile40 Premium eyedrops, and other items reported double-digit growth, and Lion was able to realize increases in unit prices. In addition, inbound market demand resulted in major growth in external medications for treating acne, elastic pads for cooling the legs, and other items. In the direct-to-consumer business, Lion strengthened its position by making an accurate response to the new Foods with Function Claims system in the marketing of Nice rim essence Lactoferrin and through launching of new products.
During 2016, Lion is continuing to work to increase its profitability and is aiming to raise its position in major markets, including oral care and fabric care. In the oral care field, Lion is the No. 1* manufacturer in Japan and is working to further strengthen the position of its CLINICA brand lineup. In addition, in the laundry detergents field, Lion newly launched TOP SUPER NANOX and will step up its marketing initiatives in the super-concentrated liquid detergents business. Activities to increase Lion’s market share and raise profitability will include strengthening Lion’s in-store promotion programs and securing additional consumers to try Lion products, while also working to encourage the shift to super-concentrated liquid detergents.
* INTAGE Inc., SRI survey of the oral care market (covering toothpastes, toothbrushes, dental rinses, and other dental products). Accumulated sales from January to December 2015.