MarketLine Case Study

P&G relaunches
laundry capsule in
Japan
New innovative 3D capsules prove
a success with consumers
Reference Code: ML00028-038

Publication Date:June 2018

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OVERVIEW
Catalyst
In September 2017, Proctor & Gamble (P&G) relaunched its laundry pod/capsule in Japan. The new capsule was 3D in
nature meaning that the ingredients of the product had been subdivided into three different compartments to ensure
higher performance levels. The product has proven to be a success with Japanese consumers.

Summary
P&G first launched its laundry pod/capsule in Japan in 2014. The product which had originally been developed for the
European and North American markets witnessed some success in the Japanese market. However the cold-water
washing culture of the Japanese market meant that the capsules were not always suited to the taste of local consumers.
This changed with the new 3D capsule which the company launched in 2017. Sales of the new capsule out-competed its
predecessors when the first week sales of both products are taken into account.

The new 3D capsule has proven to be a success for several reasons. The time efficient high performing level of the
product has resonated with Japanese consumers who increasingly are placing a higher value on what they do with their
free time. This is especially the case with younger adults in the country. Young females in the country further classify
tasks such as ironing as their most disliked household tasks. Again the new 3D capsule was adapted to their needs as a
wash using the capsule provides ironing benefits, including ingredients that reduce wrinkles on fabric.

The fact that P&G is focusing on improving the performance level of its current products ensures that it will continue to
grow its market share in the Japanese market in the coming years. Improved products will also boost P&G’s sales in the
wider region as well.

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TABLE OF CONTENTS
Overview ............................................................................................................................................................................. 2

Catalyst............................................................................................................................................................................ 2

Summary ......................................................................................................................................................................... 2

Innovative new laundry capsule proves to be a success in the Japanese market............................................................... 5

Ingredients of the new capsule have been divided into three separate compartments .................................................... 5

10 million boxes of new capsule sold by P&G in the first week of release in 2017 .......................................................... 5

Time saving high performance products prove very popular in Japan ................................................................................ 7

P&G advertisements emphasize the high performance level of new 3D capsule ............................................................ 7

High performance capsule ideal for time-scarce Japanese consumers ........................................................................... 8

P&G develops a product that is adapted to local needs .................................................................................................. 9

Conclusions....................................................................................................................................................................... 10

Innovation and adaptation are the reasons behind 3D capsule’s success..................................................................... 10

Appendix ........................................................................................................................................................................... 11

Sources ......................................................................................................................................................................... 11

Further Reading ............................................................................................................................................................. 11

Ask the analyst .............................................................................................................................................................. 12

About MarketLine .......................................................................................................................................................... 12

Disclaimer ...................................................................................................................................................................... 12

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LIST OF FIGURES
Figure 1: The previous Ariel gel ball capsule as compared to the new capsule .................................................................. 5

Figure 2: High tech advertisements played a role in making the new capsule attractive for Japanese consumers............. 7

Figure 3: Japanese consumers who rely heavily on time-saving products and services, by gender and age group, 2016 . 8

Figure 4: Consumers by region who somewhat or completely agree that they would pay more for laundry products that
are more time-efficient......................................................................................................................................................... 9

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INNOVATIVE NEW LAUNDRY CAPSULE PROVES TO
BE A SUCCESS IN THE JAPANESE MARKET
In September 2017, Proctor & Gamble (P&G) innovated and re-launched its laundry pods/capsules in Japan. The new
capsule is more advanced than its predecessor and instead of containing all of its ingredients in one section has been
subdivided into three different compartments. Each compartment serves a different purpose and is activated at the
required time. P&G claims this improves the capsule’s disinfectant power by 50 times. The product has proven to be a
success with sales of the new 3D capsules selling more in its first week than its predecessor did in its first week in 2014.

Ingredients of the new capsule have been divided into three

separate compartments
P&G in September 2017 decided to relaunch its gel ball laundry capsules as part of a drive to maintain the product’s
popular presence in the Japanese market. Originally launched in 2014 it was re-launched under the “Ariel” and “Bold”
brands and the new 2017 capsules have been divided into three parts which is why the company refers to them as “3D”
structured capsules. The three separate compartments within the capsule are packed with different ingredients and serve
different purposes. One compartment’s ingredients deal with the actual cleaning whereas the second compartment
brightens the clothes and the third provides benefits such as fabric softening. The company claims that if these
ingredients are added together and released at the same time, their effect is far less profound. In fact according to P&G
the disinfectant power of its Ariel products is 50 times higher by keeping its ingredients separate in three different
compartments, rather than them being combined in one as was the case before the 2017 capsules.

Figure 1: The previous Ariel gel ball capsule as compared to the new capsule

SOURCE: P&G Japan MARKETLINE

10 million boxes of new capsule sold by P&G in the first week

of release in 2017
Unlike many other parts of the world Japanese consumers are traditionally famous for being inquisitive and willing to
experiment and try new products. In a survey conducted by GlobalData in 2016, 60% of Japanese consumers stated
they “often” or “sometimes” try new laundry products. Only 4% stated that they never try new laundry products.
Introducing new products in such a market is therefore relatively easier for companies, given the product is actually
desirable in the eyes of Japanese consumers.

The initial capsule launched by P&G in Japan in 2014 therefore proved to be very successful as it was the first such
product launched in the country and was evidently desirable according to Japanese consumers.

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The product was especially successful because it was adapted so that it could be utilized in cold water as well. Since the
majority of Japanese wash their clothes in cold temperatures ranging from 5 to 20 degrees Celsius, this innovation
allowed the capsule to be adopted by the mass market in Japan. In total between 2014 and 2017 according to P&G it
sold over 100 million of its 1D capsule in Japan. Meanwhile the launch of the 3D capsule in 2017 proved even more
successful since in the first week alone P&G stated that it had sold more than 10 million of its Ariel and Bold branded 3D
capsules, which was more than the amount sold by the company in 2014 when it launched the 1D capsule.

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TIME SAVING HIGH PERFORMANCE PRODUCTS
PROVE VERY POPULAR IN JAPAN
Consumers in Japan and indeed across large parts of the globe today place greater importance on products that are time
efficient and have high-performance levels. With its new product P&G has therefore managed to innovate and create a
product that is suited to the local demand. Laundry pods/capsules have their origins in the Western markets of Europe
and North America. However P&G has managed to adapt these capsules to local demand including the ability to make
them work in washing machines that utilize cold temperature water. However even more importantly following the
product’s release, P&G ran a successful advertisement campaign that emphasized this innovation to Japanese
consumers. The advertisement focused on the high tech nature of this new product as well as its benefits. Ultimately
developing products suited to local demand will result in P&G witnessing growth in its market share in not only Japan but
also across the wider region.

P&G advertisements emphasize the high performance level of

new 3D capsule
The P&G 3D capsule has been a major success in Japan, with its sale levels out-competing its predecessors in the first
week after it came into the market. There are several reasons why the product has been so successful. It is important to
note that most Japanese consumers are not overly concerned with health and safety standards, instead placing higher
value on the performance levels of a product. In fact performance is so important for the average Japanese consumer
that 65% of them answered in another poll conducted by GlobalData that if they had the option they would choose “more
functionality” over “less chemicals” in their laundry products. The 3D nature of the new capsule means that it does have a
much higher performance level than its predecessor’s level ensuring that the average Japanese consumer would find this
product very attractive.

Figure 2: High tech advertisements played a role in making the new capsule attractive for Japanese consumers

SOURCE: P&G Japan MARKETLINE

However getting this point across to the Japanese consumer is another matter and again one of the major reasons why
P&G has been so successful in selling the new 3D laundry capsule is the fact that it ran an effective advertisement
campaign that caught the attention of Japanese consumers. Advertisements that ran on Japanese TV (see Figure 2)
showed high tech machinery involved in the process of producing the new 3D capsules.

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The advertisement further emphasized the fact that the capsule could clean 100 types of dirt such as sebum or grease, is
a deep disinfectant and removes stains and brightens clothes. The vibrant colors of the three parts of the capsule were
also emphasized, showing that each compartment would come into use only after it had made contact with water. In
essence the advertisement highlighted that the new 3D capsules were very effective and thereby held high performance
levels.

The advertisement campaign resonated with Japanese consumers who are generally speaking very conducive to
advertisements that emphasize high performance levels of products. In fact another poll conducted by GlobalData found
that 38% of Japanese consumers accept they are convinced to purchase products that claim to have good performance.
P&G therefore successfully understood its target market and was able to deliver a product which resonated with
Japanese consumers.

High performance capsule ideal for time-scarce Japanese

consumers
Major changes are currently taking place in the Japanese job market as rising labor shortages are pulling more and more
housewives into the job market. As such in 2010 for example, the percentage of women in Japan who were employed
was 48.2%. By 2015 this figure had however risen drastically to 67.3%. As more and more housewives enter the job
market the frequency with which Japanese households are now washing their clothes has witnessed a decline.
According to P&G in 2011 for example Japanese households were washing their clothes 8.6 times a week. By 2016
however this figure had declined to 6.4 times a week. There is as such a direct correlation between rising female
employment levels and reduced frequency in the amount of times Japanese households are now washing their clothes.

The drop in this frequency has resulted in Japanese households increasingly looking to wash their clothes in bulk, usually
over the weekend. In this context P&G’s 3D laundry capsule is very attractive for consumers since no measurement of
washing powder or pouring of softener liquid is required. Rather this one capsule alone serves all purposes. As more and
more females become employed in the country, the popularity of time-saving products and services has been on a strong
rise in the country and half of all 25-34 year olds in the country today utilize such products or services heavily (see Figure
3). In fact P&G’s 3D capsule is most effective on short laundry settings (for example a washing time of 40 minutes).
Again this saves time for Japanese consumers.

Figure 3: Japanese consumers who rely heavily on time-saving products and services, by gender and age group,
2016

SOURCE: P&G Japan MARKETLINE

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P&G develops a product that is adapted to local needs
The pod/capsule detergents originate in the Western world, becoming a standard product nowadays in stores and
supermarkets across Europe and North America. However the washing culture is quite different to Japan with
Westerners for example preferring hot temperatures. In this context P&G’s innovative warm weather 3D capsule launch
was groundbreaking in the industry and resulted in the Japanese market, which prefers washing in cool temperature
water, being able to utilize the pod/capsule laundry detergent technology as well. In August 2017 P&G’s market share in
laundry products in the Japanese market stood at 9% but is expecting this to rise to 30% in the coming years.

The 3D capsule is also adapted to younger generations of Japan who increasingly view many household duties like
washing or ironing to be unlikeable. In fact, a study conducted by Mynavi Women found that of the young female adults
in the country (22-34 year olds), the majority classified ironing as their most disliked household task. Again P&G has
been able to innovate and adapt its product to its market as the Bold Gel Ball 3D capsule provides ironing benefits
including ingredients that reduce wrinkles on fabric.

The fact that P&G is also focusing its activities on improving the performance level of its current products is encouraging
as this allows its products to remain attractive, especially in a country and in fact wider region where saving time is of
increasing importance. A GlobalData survey from 2015 found that the majority of consumers in Asia and South America
completely or somewhat agree that they would be willing to pay more money for laundry products that are more time-
efficient than the products they currently use.

Figure 4: Consumers by region who somewhat or completely agree that they would pay more for laundry products
that are more time-efficient

SOURCE: GlobalData MARKETLINE

If P&G continues to innovate and produce new products that are more time-efficient than the laundry products it currently
offers, then it is likely to see its market share increase in not only Japan but also across large parts of the world including
the fast developing nations in the Asia-Pacific region.

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CONCLUSIONS
Innovation and adaptation are the reasons behind 3D capsule’s
success
Although the 3D capsule has its origins in Western markets in Europe and North America, P&G has successfully been
able to adapt the product to the demands of the Japanese market, especially by making the capsule work in cold
temperate water. The fact that the capsule works is very efficient over faster 40 minute washes has also made it
attractive for Japanese consumers who are increasingly placing a higher value on their time. Similar innovation and
adaptation will allow the company to increase its market share in not only Japan but also countries across the wider
region.

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APPENDIX
Sources
Nikkei Trendy (2017) “Beat 30 for 2017,” page 116, December 2017

Ministry of Health, Labour and Welfare (2011) “Whitepaper - Women in Work,”

http://www.mhlw.go.jp/bunya/koyoukintou/joseijitsujo/dl/11b.pdf, 2011

Ministry of Health, Labour and Welfare (2016) “Whitepaper - Women in Work,” http://www.mhlw.go.jp/file/04-
Houdouhappyou-11902000-Koyoukintoujidoukateikyoku-Koyoukintouseisakuka/0000169523.pdf, 2016

Mynavi Women (2014) “Can you marry? Worst two housekeeping tasks that women dislike,”
https://woman.mynavi.jp/article/141215-83/, December 2014

Nikkei Style (2017) “The novel laundry detergent that was sold 100million boxes – ‘Psychologically time-saving’ is key for
success,”

https://style.nikkei.com/article/DGXMZO22783870X21C17A0000000, November 2017

SankeiBiz (2017) “P&G, Three Dimension Structure Gel Ball,”

https://www.sankeibiz.jp/business/news/170831/bsc1708310500001-n1.htm, August 2017

Further Reading
MarketLine Company Profile – The Procter & Gamble Co

MarketLine Industry Profile – Textile washing products in Japan

MarketLine Industry Profile – Feminine Hygiene in Japan

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