Some in China are boycotting Japanese cosmetics over Fukushima water release
A Shiseido booth at a products expo in Haikou, China, in April. | REUTERSBLOOMBERG
Jun 24, 2023
A consumer boycott in China over a planned release of water from the Fukushima No. 1 nuclear plant is threatening to hurt Japanese cosmetics makers.
The viral campaign began earlier this month when largely unproven allegations that water discharges from the plant are hazardous to health began trending on Chinese social media platforms.
Since then, Chinese internet users have began compiling lists of Japanese brands, questioning their safety, with a hashtag on the issue attracting about 300 million views on China’s equivalent of Twitter, Weibo.
Major cosmetics firm Shiseido saw its largest weekly stock plunge the most in nearly 10 months, with its shares down 6.8%. Shares of other cosmetics makers including Pola Orbis Holdings and Kose also fell over 3%.
The boycott could be a “trigger for Chinese consumers to switch away from Japanese premium cosmetics brands,” said Wakako Sato, an analyst for Mitsubishi UFJ Morgan Stanley Securities. Weaker local consumption is a more fundamental reason for Japanese brands’ underperformance, she added.
Discharges from the Fukushima plant, which suffered a meltdown after a major earthquake in 2011, have often attracted the ire of Japan’s neighbors. China in particular has repeatedly condemned the planned release of treated water into the ocean.
Japan has maintained that the water, used to keep the fuel and debris at the disaster site cool, is safe considering it undergoes a treatment process to remove most radioactive elements before being diluted and released into the sea.
Still, international brands have learned not to underestimate social media campaigns in the world’s second-largest economy. Shiseido and Procter & Gamble, which owns the popular Japanese beauty brand SK-II, quickly issued statements in China assuring the safety of their products.
A spokesperson for P&G said in response to queries that no radiation risks have been identified in the manufacturing site for SK-II and attributed online concerns to “misinformation.”
SK-II recently lost its spot in the top five ranking to a local brand during a major online sales event in China held annually. Some internet users are also pushing for more firms to be boycotted, with recent lists adding baby products and food brands, and even Chinese brands using Japanese raw materials.
Still, some are confident it’s a passing fad.
There’s likely to be a minor impact on Japanese cosmetics firms with a government ban unlikely, Jefferies analyst Mitsuko Miyasako wrote in a note Friday. “We do not anticipate the boycott movement becoming a major force, and we do not think it will have a negative impact on the performance of cosmetics companies.”
Jeanie Chen, a senior equity analyst at Morningstar Research, said she didn’t think the impact on the Japanese brands will be substantial.
“Probably some people who are against Japan just try to take this opportunity to influence the other people to boycott the Japanese brands,” Chen said. “But I think Chinese consumers are much more sophisticated these days.”
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