Japan's Big 3 Toiletry Makers FY2025 Full Year: Kao and Lion Rise as Unicharm Falters
Companies compared · 3
Kao
4452
Unicharm
8113
Lion
4912
Takeaway
Domestic recovery and overseas headwinds split fortunes for toiletry makers.
Japan's Big 3 Toiletry Makers saw diverging fortunes in FY2025. Kao and Lion rebounded on restructuring and solid domestic demand, while Unicharm struggled under headwinds in China and India.
Overall Industry Trends
Three common themes drove the daily goods industry during this period.
First is premiumization and the acceptance of price hikes. Companies successfully overcame rising raw material costs by delivering high-value products.
Second is the recovery of domestic demand, supported by wage hikes across Japan.
Third is the cooling of overseas markets, particularly due to reputational damage in China.
Revenue Ranking
Kao stands far ahead of the competition at 1,688.6 billion yen. Meanwhile, the struggling Unicharm recorded 945.3 billion yen, falling further behind the industry leader.
Winners and Losers
The winner this term is Lion, which recorded a net profit jump of 30.1% year on year. Through restructuring and business selection, its operating profit margin improved to 8.6%.
In contrast, Unicharm struggled, facing unexpected headwinds in its key markets of China and India. Its operating profit sank 21.4% year on year to 108.9 billion yen. The gap between the two companies highlights their level of dependence on overseas markets.
Winner
Lion
Laggard
Unicharm
Operating Profit Ranking
Kao maintained its top position at 164.1 billion yen. Unicharm secured second place at 108.9 billion yen despite its profit decline, while Lion chased them with substantial profit growth on a smaller scale.
Operating Profit Margin Ranking
Unicharm kept the lead at 11.5%, demonstrating that its highly profitable structure remains intact despite lower earnings. Kao recovered to 9.7% through its structural reforms.
Key Developments and Strategy Comparison
Each player is accelerating the "selection and concentration" of its business portfolio.
Kao streamlined its brands and revived its cosmetics business. Its operating profit rose 11.9% year on year, showing concrete results from its structural reforms.
Lion is selling off unprofitable businesses to sharpen its focus on areas of strength.
Despite its current struggles, Unicharm announced its 24th consecutive year of dividend increases. The company is maintaining an aggressive stance, targeting 1 trillion yen in sales for the next period while prioritizing shareholder returns.
Shared Industry Risks
Four shared risks threaten the industry going forward:
- A resurgence in raw material prices and energy costs
- Global geopolitical risks and regulatory changes, including tariffs
- Long-term market contraction due to Japan's declining population
- Intensifying price competition in both domestic and international markets
Outlook for Job Seekers and Career Changers
When evaluating potential employers, applicants should pay attention to each company's speed of transformation.
For those who want to compete globally, Unicharm remains highly suitable due to its high overseas sales ratio. If you want to gain experience on the front lines of structural reform, Kao or Lion would be ideal. While the industry is stable, the internal environment is changing rapidly.
Revenue Growth (YoY)
Kao led with a 3.7% increase, supported by a resilient domestic market. In contrast, Unicharm fell 4.4% as headwinds in China and India took a direct toll.
Net Income Growth (YoY)
Lion recorded spectacular growth of 30.1% by shedding unprofitable businesses. Kao also saw the direct impact of its structural reforms with an 11.4% increase.