Hair Today, Gone Tomorrow: Taisho's Baldness Remedy Takes Off

TOKYO -- With one hand stroking his thinning mane, a middle-aged man stares at pharmacist Kanako Yoshida in disbelief. Like his scalp, the shelves of her drug store are barren of RiUp, a Japanese hair-growth tonic that has topped the charts since Taisho Pharmaceutical began peddling it in June.

"I can get it to you in about two months if you get lucky and there's a cancellation," Yoshida explains patiently. "But you should sign up now or you'll be waiting until New Year's."

Yoshida, who says she turns away three or four customers a day, isn't alone in disappointing the follicularly challenged. Apothecaries nationwide have been overwhelmed by a crush of desperate men hoping they have found a miracle elixir for their alopecia.

The concoction, the name of which is a clunky contraction of the Japanese for "re-up hair," plays to the growing obsession among the Japanese for youthfulness, even in a society where age is still revered. Prime-time television overflows with celebrities pushing hair-growth balms, gels and ointments, as well as the more conventional weaves, transplants and wigs. Over 11 million Japanese men have sought some form of remedy for baldness, according to a survey by Aderans, one of the country's leading wigmakers. Almost half are under the age of 30.

The tonic's popularity has forced Taisho to scrap its initial conservative production schedule of 1.6 million bottles between the June debut and March 2000. Now the Tokyo-based company has plants and workers running overtime to churn out 1.2 million bottles of RiUp a month.

Thanks to mirror-fixated Japanese men, as well as a deluge of free publicity that has minimized the need for advertising, the company is expected to reap windfall profits. Rather than the earlier estimates of 6 billion yen ($56.34 million), earnings are now seen reaching 30 billion to 35 billion yen ($283 million to $330 million).

The market, of course, has noticed the stock behind the fluffier hairstyles. Since June, Taisho's stock has risen by more than 20% to 4,850 yen. Aderans, the wigmaker, has also benefited, jumping 12% to 5,820 yen.

"I think the [other pharmaceutical companies] underestimated the vanity of Japanese men," says Stephen Barker, analyst at Warburg Dillon Read. WDR has a strong buy recommendation on Taisho.

While few Japanese men may care, RiUp, selling for 5,500 yen for a 60-milliliter bottle, is for all intents and purposes Pharmacia & Upjohn's (PNU Quote) Rogain. Taisho licensed Rogain's famous main ingredient, minoxidil, from the New Jersey-based pharmaceuticals giant. Rogain isn't approved by Japanese authorities, although individuals can order it through trading companies.

RiUp's success has crushed the competition faster than a cloudburst will wilt a bouffant. Prior to RiUp's debut, the leading hair tonic was Dai-ichi Pharmaceutical's Karoyan. But without the minoxidil cache, it has seen sales slump. Dai-Ichi's shares have drooped 12%.

For the time being, Taisho is seeding its balance sheet with RiUp proceeds. In short order, the company has captured 11 billion yen of the total 45 billion yen hair-tonic market, double the market share of its top three competitors.

Taisho hasn't pinned its success solely on RiUp. Like the U.S., Japan is witnessing a boom in fin de siecle mysticism that has created a market for herbal and holistic remedies. Taisho commands 70% share of the 100 billion yen a year health-drink market and sells a herbal pick-me-up similar to ginko bilabo.

The company is also benefiting from regulatory revisions that allow its products to be sold in convenience stores and groceries. Convenience stores see 10 times as much traffic as pharmacies.

If pharmacist Yoshida's experience is anything to go by, however, the company will be able to play the RiUp card for some time to come.

"Unlike the U.S. and Europe, it's not sexy to be bald in Japan," Yoshida says. "If a guy looked like Sean Connery, maybe I would think otherwise, but there aren't a lot of Sean Connerys in Japan. At least from what I've seen."