07.30.10
Japan
www.shiseido.co.jp
Sales: $6.8 billion
Key Personnel:
Shinzo Maeda, president and chief executive officer; Yasuhiko Harada, chief financial officer, senior managing executive officer; Kimie Iwata, executive vice president; Carsten Fischer, senior managing executive officer, director of international business; Tatsuomi Takamori, managing executive officer, director of domestic cosmetics business; Hisayuki Suekawa, managing executive officer, director of business planning; Yu Okazawa, executive officer, director of international sales; Mitsuo Takashige, executive officer, director of human resources; Hiromi Hanada, executive officer, director of professional business
Major Products:
Skin care, color cosmetics, sun care, fragrances and toiletries. Brand names include Future Solution LX, Bio-Performance, Benefiance, White Lucent, The Skincare, Eudermine, Pureness
New Products:
Shiseido Sheer Matifying Compact, Tsubaki Gold Series, In and On, Urara, DQ, Future Solution LX, Bare Escentuals (acquisition)
Comments:
Corporate sales fell 6.7% last year. Domestic cosmetic sales represented 61.7% of group sales, while international sales accounted for 36.7% of sales. More specifically, the Americas represented 7.5% of sales; Europe, 11.5% and Asia/Oceania, 17.9%.
In an effort to contain costs, Shiseido combined lines and channels, focusing on specific targets in Japan. In some ways, the rationalization paid off, as sales at “priority voluntary” chain stores and department stores remained strong. However, results at drugstores and general merchandise stores slipped.
Outside Japan, sales rose 3% as sales in Europe and North America began to rebound in the fourth quarter. In Asia, sales were up on continuing strength in China.
Tough Times Ahead?
Things may get worse before they get better. In a presentation to analysts in April, chief executive officer Shinzo Maeda noted that domestic over-the-counter cosmetic sales fell 3-4% in 2009 and warned that there was no sign of an upturn.
“We expect that the market will continue to experience negative growth in the first half of fiscal 2010, but will bottom out in the second half,” he told the audience. “For the full year, we expect sales to be down around 1%.”
The prediction follows three difficult years in the Japanese cosmetics market. In addition to the aforementioned decline in 2009, sales were flat to down 1% in 2007 and off 2-3% in 2008, according to Shiseido.
Outside Japan, Maeda noted that Europe and the U.S. remained weak after the Lehman crisis, but appeared to be recovering slowly, at different speeds in different regions, from the fourth quarter of fiscal 2009.
“Although the outlook for fiscal 2010 remains uncertain, we expect that the recovery will continue,” explained Maeda.
Meanwhile, in Asia, including China, although the markets were affected by the global economic downturn in the first half of fiscal 2009, the impact was less significant than in Europe and Americas. Maeda noted that the markets have gradually been recovering previous growth since the second half, and he expects this trend to continue in fiscal 2010.
Taking a long-term, global look at the cosmetics market, Shiseido predicts that the Western European cosmetics market will grow just 0.1% a year from 2008 to 2013 to reach $72.5 billion. North America will increase 1.7% to $45.5 billion. Eastern Europe will grow 2.9% to reach $23.0 billion. The Middle East-Africa region will grow 4.7% to $12.4 billion and Central and Latin America will grow 2.9% to $5.8 billion. To boost results outside Japan, in March, Shiseido completed its $1.7 billion acquisition of Bare Escentuals. The brand is attracting new department store customers in Japan and Shiseido hopes to recreate the brand’s successful home shopping model outside the U.S.
With an eye toward maintaining double-digit gains in China, Shiseido is entering new categories to target new customers and channels with the introduction of such hair care brands as Joico and Shiseido Professional. The company expects the two brands to reach 700 salons in Shanghai and Beijing by the end of 2010, and 2,500 hair salons by 2014.
Last year, Shiseido entered Egypt, Morocco, Laos and Azerbaijan. This year, the company will enter Mongolia and plans to develop “new markets in a few more countries” by next year, according to Maeda. Right now, Shiseido has operations in 74 countries.
The overall goal, as it has been for years, is to turn Shiseido into a global brand that represents Asia with its origin in Japan, according to company executives.
www.shiseido.co.jp
Sales: $6.8 billion
Key Personnel:
Shinzo Maeda, president and chief executive officer; Yasuhiko Harada, chief financial officer, senior managing executive officer; Kimie Iwata, executive vice president; Carsten Fischer, senior managing executive officer, director of international business; Tatsuomi Takamori, managing executive officer, director of domestic cosmetics business; Hisayuki Suekawa, managing executive officer, director of business planning; Yu Okazawa, executive officer, director of international sales; Mitsuo Takashige, executive officer, director of human resources; Hiromi Hanada, executive officer, director of professional business
Major Products:
Skin care, color cosmetics, sun care, fragrances and toiletries. Brand names include Future Solution LX, Bio-Performance, Benefiance, White Lucent, The Skincare, Eudermine, Pureness
New Products:
Shiseido Sheer Matifying Compact, Tsubaki Gold Series, In and On, Urara, DQ, Future Solution LX, Bare Escentuals (acquisition)
Comments:
Corporate sales fell 6.7% last year. Domestic cosmetic sales represented 61.7% of group sales, while international sales accounted for 36.7% of sales. More specifically, the Americas represented 7.5% of sales; Europe, 11.5% and Asia/Oceania, 17.9%.
In an effort to contain costs, Shiseido combined lines and channels, focusing on specific targets in Japan. In some ways, the rationalization paid off, as sales at “priority voluntary” chain stores and department stores remained strong. However, results at drugstores and general merchandise stores slipped.
Outside Japan, sales rose 3% as sales in Europe and North America began to rebound in the fourth quarter. In Asia, sales were up on continuing strength in China.
Tough Times Ahead?
Things may get worse before they get better. In a presentation to analysts in April, chief executive officer Shinzo Maeda noted that domestic over-the-counter cosmetic sales fell 3-4% in 2009 and warned that there was no sign of an upturn.
“We expect that the market will continue to experience negative growth in the first half of fiscal 2010, but will bottom out in the second half,” he told the audience. “For the full year, we expect sales to be down around 1%.”
Shiseido’s limited edition eyeshadow is new for Fall 2010. |
Outside Japan, Maeda noted that Europe and the U.S. remained weak after the Lehman crisis, but appeared to be recovering slowly, at different speeds in different regions, from the fourth quarter of fiscal 2009.
“Although the outlook for fiscal 2010 remains uncertain, we expect that the recovery will continue,” explained Maeda.
Meanwhile, in Asia, including China, although the markets were affected by the global economic downturn in the first half of fiscal 2009, the impact was less significant than in Europe and Americas. Maeda noted that the markets have gradually been recovering previous growth since the second half, and he expects this trend to continue in fiscal 2010.
Taking a long-term, global look at the cosmetics market, Shiseido predicts that the Western European cosmetics market will grow just 0.1% a year from 2008 to 2013 to reach $72.5 billion. North America will increase 1.7% to $45.5 billion. Eastern Europe will grow 2.9% to reach $23.0 billion. The Middle East-Africa region will grow 4.7% to $12.4 billion and Central and Latin America will grow 2.9% to $5.8 billion. To boost results outside Japan, in March, Shiseido completed its $1.7 billion acquisition of Bare Escentuals. The brand is attracting new department store customers in Japan and Shiseido hopes to recreate the brand’s successful home shopping model outside the U.S.
With an eye toward maintaining double-digit gains in China, Shiseido is entering new categories to target new customers and channels with the introduction of such hair care brands as Joico and Shiseido Professional. The company expects the two brands to reach 700 salons in Shanghai and Beijing by the end of 2010, and 2,500 hair salons by 2014.
Last year, Shiseido entered Egypt, Morocco, Laos and Azerbaijan. This year, the company will enter Mongolia and plans to develop “new markets in a few more countries” by next year, according to Maeda. Right now, Shiseido has operations in 74 countries.
The overall goal, as it has been for years, is to turn Shiseido into a global brand that represents Asia with its origin in Japan, according to company executives.