Shiseido Outlines Growth Plan for China

Focusing on becoming a “global mega brand” with a focus on Asia and other emerging markets, Shiseido recently laid out plans for further expansion in the Chinese marketplace. According to the company, China is a standing example of how the group can proactively capitalize on its resources with the entry of Bare Escentuals into Asia and launch of e-commerce business in September.

Shiseido is developing new businesses in China, which is positioned to serve as a main growth engine under its current three-year plan, which encompasses April 2011–March 2014 and began this fiscal year. In line with four growth strategies announced—Global Mega-Brand, Asian Breakthrough, New Frontier and Customer-First —Shiseido is working to facilitate new growth and achieve sustained double-digit growth in sales, exceeding the rate at which the Chinese cosmetics market is growing by strengthening the foundations of its businesses through such means as launching a new e-commerce service.

Introduction of E-Commerce Initiatives

As the number of Internet users continues to grow worldwide, Shiseido will commence full-fledged efforts to introduce e-commerce initiatives for the Chinese market to realize its New Frontier Strategy. The aim is to expand points of contact with new customers in addition to existing sales channels in China, which surpassed the United States as the country with the most Internet users in 2010. On September 15, Shiseido will launch a website for Pure&Mild Soi, a new series of products developed specifically for the Chinese mail-order market under its Pure&Mild brand, which is currently offered primarily at supermarkets, hypermarkets and cosmetics specialty stores. The new line of products, with environment-friendly features that include packaging made from bagasse paper, targets young, post-80s consumers who prefer natural products and lead consumption in China.

The mail-order business goes beyond a shopping website, incorporating a new call center that will field customer inquiries, and an online counseling service that will allow professionally trained call center staff to propose products and beauty techniques that are optimized for the skin types and needs of individual customers. By accumulating information in a customer database for later analysis, Shiseido seeks to boost customer satisfaction.

Developing the Bare Escentuals Brand in Hong Kong

The Global Mega-Brand Strategy focuses, amongst other things, on developing three brands in the prestige category: global brand Shiseido, Clé de Peau Beauté and bareMinerals from Bare Escentuals, Inc.

In the initiative for China, bareMinerals products will be sold through a Shiseido sales company (Shiseido Hong Kong Ltd.) for the first time as a synergy effect resulting from Shiseido’s acquisition of the company in March 2010. Shiseido will hold an event to announce the products in Hong Kong on September 28 prior to launch at two department stores in the territory in October.

Introducing the Tsubaki Global Mega-brand in China

In the masstige category of its Global Mega-Brand Strategy, Shiseido is currently offering two brands: Za, a skin care and makeup brand, and Senka, a skin care brand. Shiseido also will introduce the Tsubaki hair care brand in December 2011 in an effort to expand a new product category in the masstige domain. Products currently being sold in Japan under the brand will be locally adapted to better meet the needs of Chinese women and made available at about 10,000 hypermarkets and drugstores. Shiseido will build a fourth production facility at Shanghai Zotos Citic Cosmetics Co., Ltd. to boost production of these TSUBAKI products.

Trialing a Collagen Drink

With the Chinese health food market experiencing dramatic growth, Shiseido is working toward the release of a collagen drink in the health care business as a new business domain. Recognizing that there is also high demand for such products in Japan, Shiseido is planning to conduct a trial with a beauty beverage formulated with collagen under its Pure&Mild brand for individuals seeking beautiful and resilient skin. The move is part of Shiseido’s Asian Breakthrough Strategy, which seeks to enhance its presence and achieve future growth. Of the 8,000 stores that carry Pure&Mild brand products, the initiative will be implemented at 1,600 high-end shops able to offer customers counseling.

Shiseido will boost the presence of new and existing brands in China by prioritizing investment in these new initiatives. In the department store channel, Shiseido will increase the competitive edge and prestige of global brand Shiseido, Clé de Peau Beauté and Aupres. In the cosmetics specialty store channel, which includes more than 5,000 retailers, Shiseido will seek to increase same-store sales by promoting the Urara brand and introducing d’icilà, a prestige brand designed for cosmetics specialty stores in Japan, at stores with leading sales figures.

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