Amazon is expanding its presence in Japan's cosmetics market by investing in Istyle, the owner and operator of the beauty retailer @Cosme.

WHO: Istyle was founded in 1999, launching @Cosme as a site dedicated to reviews of cosmetic products. Over the last 21 years, the business has developed a database to analyze consumer behavior. This data has enabled @cosme to evolve into a universal marketing platform for the cosmetics industry, fusing media, online retail, and brick-and-mortar shops into one unified ecosystem. The business has 26 directly managed beauty stores throughout Japan and Hong Kong under the brand @Cosme Tokyo and @Cosme Store.

WHY: Under the agreement, Istyle will open a dedicated @Cosme shopping on Amazon's e-commerce site in Japan expanding Amazon's presence in the cosmetic category. In the future, Amazon and Istyle may collaborate to create stores using digital technologies.

IN THEIR OWN WORDS: Trading house Mitsui plans to position the cosmetics business as one of its key growth fields and wants "to broaden access to Istyle's customers and manufacturers," according to a spokesperson. It intends to leverage its sales network to offer Japanese-made cosmetics in overseas markets.

DETAILS:

• Istyle will issue $18.7 million worth of convertible bonds and $86.3 million in warrants to Amazon, as reported by Nikkei Asia. If the bonds were to be converted to shares, it would give Amazon a stake of about 36% in the business.
• Istyle will also issue convertible bonds to investors including leading trading house Mitsui & Co.
• The Japanese retailer also plans to acquire Miz Corp-owned cosmetics specialty store chain Tokyo Komachi in a deal set to close next month.