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Shiseido Targets Indonesia for Growth with New Joint Venture

Posted: April 10, 2014

Shiseido announced it has concluded a joint venture agreement with PT Sinar Mas Tunggal, a group company of the Indonesian conglomerate Sinar Mas Group. Shiseido Co., Ltd. and the Sinar Mas Group will hold equity shares of 65% and 35%, respectively, of the newly established PT Shiseido Cosmetics Indonesia.

Business operations are scheduled to commence in July 2014. In the Indonesian market, which offers high growth potential, Shiseido will strive to boost sales not only by continuing to foster its Shiseido global brand promoted around the world, but also by stepping up focus on the masstige market. This sector is anticipated to maintain strong growth.

Indonesia has the world’s fourth largest population of 244 million (2012), about 60% of which are under the age of 35. Notably, the younger population in urban areas is growing at a remarkable pace, generating anticipation for further growth in income and consumption. The Indonesian market as a whole has achieved rapid recovery from historic economic downturns and the cosmetic market specifically has been growing at a robust annual rate of over 10%, which is projected to be sustained according to Shiseido’s estimates.

Shiseido initially launched sales activities in Indonesia in 1958. Since 1994, it has been steadily increasing sales by marketing its products through its distributor, PT Dian Tarunaguna, a Sinar Mas Group company. Exploring the possibility of direct investment in the high-potential Indonesian market, Shiseido decided to establish the joint venture by taking the existing collaborative relationship with the Sinar Mas Group to new heights.

In Indonesia, in addition to its Shiseido global brand, Shiseido launched its highest-end Clé de Peau Beauté brand in 2010, available in prestige department store channels. Going forward, the company will not only reinforce its prestige product category, but also strengthen marketing efforts for the masstige segment with Za, a skin care and makeup masstige brand that targets Asian women in their 20s.

Shiseido’s president and CEO Masahiko Uotani said of the , “We are truly grateful for the contributions Sinar Mas, the most powerful business partner in Indonesia, has made in developing the Shiseido group brands. With these new joint efforts, we will start a new era of the Shiseido group brands to bring an even stronger value to customers in Indonesia.”

Upon establishment of the joint venture, Franky Widjaja, vice chairman of Sinar Mas, stated, “We are delighted to have been able to establish PT Shiseido Cosmetics Indonesia jointly with Shiseido. We will further strengthen our marketing efforts, and develop the Shiseido group brands into top brands in Indonesia, brands loved by many customers.”