TOKYO — Despite sales of about 2 billion yen, or $25.7 million, in Japan alone in 2010, Koh Gen Do’s senior managing director, Megumi Setoguchi, has no ambitions of making the company founded by her sister and brother-in-law into the next Shiseido.
“Rather than [marketing toward] a large number of people, [we see ourselves] in a somewhat niche market zone for people who are looking for great products,” Setoguchi said. “We want to continue making extremely good products, and we don’t have a huge lineup of products like Shiseido, so for now we want to continue [growing] carefully.”
This year marks 26 years since the company’s humble beginnings in a small shop in Tokyo’s Azabu Juban neighborhood, and the line of skin care and cosmetics products is now available at all Barneys New York locations in the U.S., as well as select Sephora stores and on Sephora’s shopping site. There is also an online business in South Korea, and in late October, Koh Gen Do launched a wholesale business with six Beauty Bar locations in the Philippines. When two new Beauty Bar stores open in Guam in January, Koh Gen Do will be one of the headline brands.
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But the Japanese company’s founding and subsequent entry into the U.S. market didn’t follow any of the traditional routes.
“In 1986 the company was started…by my older sister and her husband. My sister was an actress, and at that time actresses all used very heavy theatrical makeup [which they wore] for many hours, so they couldn’t avoid having skin trouble,” Setoguchi explained. Her brother-in-law had studied Eastern medicine and realized that his wife’s skin care and makeup products were causing her unnecessary skin woes.
This realization prompted the couple to launch Koh Gen Do. The company started with a water-based skin care line consisting of just a few products, which were developed with, and tested by, makeup artists and fellow actresses working with Setoguchi’s sister.
“From the very beginning, the products were made using mainly mineral ingredients — absolutely no fragrances — oriental plant extracts, those kinds of things,” Setoguchi said. “The start [of the brand] was in makeup rooms, and it spread by word of mouth from professional makeup artists, and then actresses started liking it and mentioning it in magazines and such, so I think the start was very different from that of other cosmetics makers.”
After the skin care products began to take off, Koh Gen Do released its first makeup items in 1989. One of these products, the Maifanshi Moisture Foundation ($62 for a 0.71-ounce tube), remains one of the company’s bestsellers today, having been reformulated in 2009. Setoguchi claims the foundation was the industry’s first to be designed specifically to correspond with high-vision filming.
“At that time, NHK [Japan Broadcasting Corporation] was testing high-definition cameras, so hair and makeup artists we were working with at the time said that as the picture became more real, people would realize the heaviness of the actresses’ makeup,” she said. “They couldn’t hide it anymore, so they needed a foundation that was light but still provided coverage.”
The Moisture Foundation that followed doesn’t use colorants containing coal tar derivatives but is instead made with mineral pigments. Its texture is something between a cream and a liquid, and Setoguchi says it also has a unique ability to “fit” to the skin.
“No matter how much you move, cry or laugh, it won’t clump up or get out of place,” she said. “That was something my sister and the makeup artists were very particular about.”
For over 15 years, Koh Gen Do carried on operations by selling only 10 items: six skin care products, including cleansers, a serum, lotions and a mask; two medicated whitening products, and its Moisture Foundation and Face Powder. All of these products are still sold today, and prices range from $42 for the Face Powder to $123 for the Oriental Plants Emollient Cream.
In 2005, an investor bought the company from its original founders, and the following year international expansion was kicked off, along with a newly expanded product offering. After setting up an online business in Korea using the new parent company’s office there, Setoguchi and her team set their sights on the U.S.
“In 2007 we exhibited in a makeup trade show in North Hollywood in Los Angeles. It was a professional trade show, and it was the first time high-definition foundation was exhibited. It was a real challenge at first, but I had a dream of someday introducing this makeup that is so good for the skin to the Hollywood film industry,” she said. “In the end, over 300 people left their business cards over the two days, saying they wanted to get in contact with us. There was such a huge reaction, and the products were flying off the shelves. It was the first time people had encountered cosmetics like that.”
Soon after, the brand was picked up by a wholesale makeup store that sells to studios and professional makeup artists. These makeup artists introduced the line to actors, and after that the brand’s growth took off much in the same way it had in Japan 20 years earlier.
Last year, Barneys New York opened Koh Gen Do counters in its Madison Avenue and Beverly Hills stores, and followed with its other stores this year. Sakurako Shigemitsu, executive manager of the company’s marketing department, said that the response has been much better than anyone expected.
“We had a one-year exclusive agreement with Barneys New York, and the buyer said that it would have been better to do a two-year contract. At Barneys New York stores alone, the sales have been more than twice the forecasts,” she said. Shigemitsu declined to give an exact sales figure for the company’s operations outside Japan, but it is believed to be a small percentage of total business.
While Setoguchi hopes the future will see Koh Gen Do being sold in even more countries — particularly in Europe — for now she’s content to let the company grow organically, rather than to push expansion at any cost.
“My hope is that we can [greatly] affect a relatively small group of people,” she said. “I want to be able to [continue] doing things with passion. When [a company] gets bigger, you have to keep adding products and you have to pay less and less attention to detail, but we can adapt to the needs of the time. We can quit, and when we decide to increase [the products], we can do that. I want to give importance to that feeling.
“We take three or four years to make a really good product, so we’re not really thinking of increasing our product lineup,” Setoguchi continued. “We have an aesthetic salon [in Tokyo], so I have a dream to at some point open a salon and introduce our skin care method to the U.S., but it’s still baby steps. At first we just want people to get to know Koh Gen Do for a few years.”