Chinese boycott beauty products after Fukushima water discharge

Online sales of Japanese-made cosmetics in China have taken a hit after shoppers started boycotting beauty brands following Japan’s decision to release radioactive water from its stricken Fukushima nuclear plant into the Pacific Ocean.

Shoppers on social media platforms including Weibo and Red started compiling lists of products they believed could be contaminated with radioactive materials in June this year, despite a safety review by the International Atomic Energy Agency concluding the release would have a “negligible radiological risk”. 

The release of the water has turned into a serious diplomatic row between Tokyo and Beijing, sparking one of the biggest consumer backlashes since the boycott of Japanese products that followed a territorial dispute in 2012. 

Among the worst hit by the beauty boycott has been Japanese giant Shiseido, which counts Drunk Elephant skincare and Nars make-up in its stable of brands. Shiseido saw online sales in China fall 32 per cent in September month-on-month, compared with a 7 per cent decline over the past six months, according to Chinese data groups Feigua and Moojing.

China is the biggest market for Shiseido, accounting for 26 per cent of its revenue for the first six months of the year. Concerns about the boycott have caused its share price to fall 20 per cent since early June.

Shiseido said it had not confirmed a boycott, but added that it would continue to monitor the situation and take “appropriate actions”. The company does not disclose online sales figures in China on a monthly basis.

Shiseido may have permanently lost consumers who believed the products had been contaminated, said Melinda Hu, analyst at Bernstein. But as none of the production sites are located near Fukushima, and cosmetics are not manufactured using seawater, the negative impact of the boycott was likely to blow over she added. 

“Eventually consumers will realise there is limited exposure and move on,” she said.  

At a briefing in late August, Kentaro Fujiwara, the president and chief operating officer of Shiseido, told analysts that the company had postponed some online promotions in China but indicated that the impact on its bricks and mortar shops was limited for now, according to Mizuho Securities.

Kosé meanwhile saw online sales in China fall 59 per cent in September, according to Feigua and Moojing. The company declined to comment.

Western companies that manufacture certain products in Japan have also been affected. Procter & Gamble’s Japanese prestige beauty brand SK-II is among the labels most heavily targeted by the boycott. P&G were contacted for comment.

China has suspended all imports of seafood products from Japan since Tokyo began releasing the water in late August, 12 years after a devastating earthquake and tsunami triggered a meltdown of nuclear reactors at the Fukushima Daiichi plant on Japan’s eastern coast. 

The water has been treated with an elaborate filtration system to remove most radioactive material except tritium. Radiation can be dangerous to health, but Japan maintains that the dose from the treated water would be less than one-seventh of the World Health Organization’s drinking water standards.