50 Years of Nivea-Kao: A German-Japanese Success Story

Beiersdorf and the Kao Corporation, a leading manufacturer among other things of hygiene and beauty products as well as detergents and household cleaners, have shared a successful and special business relationship for 50 years. Founded on October 1, 1971, the joint venture Nivea-Kao Co., Ltd. has a leading position in many of the key skincare categories in Japan such as body care, all-purpose creams, and hand creams. Its ongoing business success has been further consolidated by strong business with NIVEA Men and 8X4 deodorant. The success of Nivea-Kao and its continued positive development are down to the good collaboration and partnership of the two parent companies.

Back in 1968, Beiersdorf concluded an agreement under the leadership of Dr. Hellmut Kruse, who later became CEO, with the company Kao Soap Co., Ltd. managed by Dr. Yoshio Maruta to market NIVEA Creme and NIVEA milk in Japan. Founded just five years after Beiersdorf in 1887, Kao was of a similar size.

In the late 1960s, the Japanese company was very keen to introduce NIVEA Creme, which was already highly successful in Europe, to Japan. Market research in this area had already been conducted. The initial sales cooperation between Beiersdorf and Kao was turned into a joint venture in 1971, with both companies having an equal stake in Nivea-Kao Co., Ltd., which marketed atrix and 8X4 products in addition to NIVEA Creme and NIVEA milk. Within the joint venture, Kao took on the production side of things. With fully automated bottling systems in the late 1970s, Nivea-Kao was even the most efficient plant in the Beiersdorf family.

The collaboration proved to be a win-win situation – consumer business developed superbly in Japan and Japan became Beiersdorf’s primary sales market in the 1980s. The Hamburg concern recognized this in 1986 by setting up its own development lab at Nivea-Kao in Tokyo in order to be better able to tailor the products to the specific needs of Japanese consumers. By the end of the 1980s, Beiersdorf Japan was generating higher revenues with deodorants and skincare products than the subsidiaries in the two key European markets, France and Spain, together. At over 240 million German marks, revenue in Japan was close to half of the revenue generated in Germany.

In 1990, Beiersdorf initiated a redefining of the cooperation with its Japanese partner Kao. Both companies wanted to be in a better position to pursue their own goals – Beiersdorf wanted to run the joint venture Nivea-Kao independently, while Kao wanted to operate the hair care company Guhl, which the two companies had jointly bought toward the end of the 1970s. As part of an exchange deal, Kao acquired 60 percent of the shares in Guhl, while Beiersdorf took control of 60 percent of Nivea-Kao. Beiersdorf still holds this share of the joint venture to this day.

In addition to shared success, over the past 50 years the collaboration between Beiersdorf and Kao has always revolved around respectful treatment and mutual learning. By sharing their expertise and experience, the two companies made the partnership a win-win situation for both sides.