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Shiseido to Expand Bare Escentuals Into Brazil

Starting in May 2012, Shiseido will commence sales of the bareMinerals brand of its North American subsidiary Bare Escentuals, Inc. into Brazil via Shiseido’s wholly owned subsidiary, Shiseido do Brasil Ltda. In addition to the Shiseido brand targeting the prestige segment, bareMinerals has a strategic role to tackle the country’s rapidly growing entry-prestige segment with its unique value of natural and mineral origin. Product sales will be carried out through e-commerce and retail sales, including standalone bareMinerals boutiques, with the aim of achieving 100+ stores handling brand products over the next five years.

This will be the first time for bareMinerals to be marketed in South America and is a direct result of the Shiseido Group’s strategy to realize synergy between its global portfolio management and Bare Escentuals.

Following the commencement of sales via a distributor in 1996 and establishing the wholly owned subsidiary Shiseido do Brasil Ltda. in 2000, Shiseido is currently selling its global brand Shiseido prestige cosmetics at approximately 140 cosmetics specialty stores in Brazil.

On the back of overall stable economic growth, Brazil has seen a steady rise in the middle-income group, which has stimulated consumption and contributed to double-digit growth in the beauty market in the past few years. Market scale has expanded to ¥2.4 trillion yen, achieving third place in the global beauty market, ranking after the United States and Japan. Also, supported by such active domestic demand along with dramatic social changes, Brazil became top in the world in terms of social networking services (SNS), with approximately 90% of Brazilians active on at least one social network.

Since acquiring Bare Escentuals, the Shiseido Group has actively embraced a growth strategy to further develop the international business of bareMinerals by leveraging its expansive global network. Regarding Brazil, however, not only can bareMinerals be marketed through the existing Shiseido sales network, but it matches current market needs in that consumers are actively upgrading from the mass to entry-prestige segment. Brazil is also a prime market in which to leverage its SNS marketing expertise, which is recognized as a leading force in the United States.

The bareMinerals brand has captured substantial support in the North American market as a pioneer of mineral foundation. Following the recent consumer trend in Brazil toward natural and organic products, Shiseido expects brand awareness to increase rapidly and to gain the top mineral brand position.

Seeking to make inroads from the standpoint of leveraging the know-how accumulated by bareMinerals in the North American market to date, Shiseido will promote a hybrid marketing strategy combining SNS and retail business. bareMinerals already enjoys its position as the highly successful community-driven brand in the United States and is a leading click-to-brick innovator with advanced expertise on how to drive its online audience to the counter. Experience in managing standalone bareMinerals boutiques will also prove to be an asset for this venture.

Additionally, the price range of bareMinerals is designated as an entry-prestige brand that is within the moderate price range to target the middle-income group, which is considered the growth engine of consumption in Brazil. For this reason, Shiseido do Brasil Ltda. will be working to expand customer points of contact with bareMinerals while distinguishing Shiseido brand products, which are in the highest price range.

In this way, the Shiseido Group will work to strengthen development in the fast-growing and dramatically changing Brazilian market through various initiatives while also sharing and utilizing assets such as brands and know-how. The sales plan for bareMinerals products in the Brazilian market calls for double-digit growth or higher over the next five years. Brazil is currently the 32nd entry market and will be developed for the first time in South America.

This move is part of Shiseido’s current three-year plan, being staged from April 2011 to March 2014, comprised of four strategies: the Global Mega-Brand Strategy, the Asian Breakthrough Strategy, the New Frontier Strategy and the Customer-First Strategy. Entry into the Brazil market for bareMinerals is one step in a line of achievements toward advancing the Shiseido Group further into emerging markets. Strengthening development in Brazil at this time will extend beyond these areas, and various measures will be taken to deploy the synergies of Shiseido and Bare Escentuals in terms of sales and marketing by combining the Global Mega-Brand Strategy, which is being promoted in pursuit of development by making investments through concentrating management resources, and the New Frontier Strategy.

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