Shiseido Unveils New Three-Year Plan

JAPAN: Through a combination of investment, digitalization and innovation, Shiseido expects sales will grow at a CAGR of 8% through 2020, according to a new three-year plan. The program, dubbed New Strategy to Accelerate Growth, is designed to make Shiseido one of the top three players in the global prestige market by 2030.


Under the plan, the second phase of the medium-to-long term strategy Vision 2020, the the needs of every region’s local consumers will be targeted, active marketing investment will grow, and the company will move forward with digital acceleration, new business development, and new value creation through innovation.


“We will also prioritize and actively invest into our people’s development as we believe that they are the source of new value creation and our growth,” said Shiseido in a statement. “Furthermore, with our global management structure evolution and through a CAGR of more than 8% over 2018-2020, we aim to achieve sales exceeding ¥1.2 trillion ($11.4 billion at current exchange rates), operating income exceeding ¥120 billion, and ROE exceeding 14% by 2020.”


A key plan strategy is “Prestige First,” which aims to increase sales of makeup and fragrances in the global prestige market, while strengthening profit base by increasing sales of skin care products, which Shiseido calls its biggest strength. Through the introduction of innovative breakthrough products, product development in collaboration with retailers, upgrades in visual merchandizing, expansion of brand shops, and optimization of digital communication through social media, Shiseido will provide customers with more brand experience opportunities.


The company said it will develop further upon cross-border marketing, mainly focusing on the Chinese consumer, expanding to all of Asia and ultimately to the rest of the world. In Asia, Shiseido will expand four more brands currently marketed in Japan (Elixir, Anessa, Senka and Integrate) to China and other Asian markets. In order to capture the needs of consumers in each market, Shiseido will expand research and development, develop products that bring added value, and collaborate with retailers to further enhance its brand power.


To restructure its supply system, Shiseido will increase its capital expenditure by ¥130 billion within the next three years. Funds will be used to enhance the production system, build new factories, and strengthen cooperation with suppliers.


Additionally, the plan calls for Shiseido to make moves in areas such as R&D. For instance, the company said it will increase the number of R&D personnel to 1,500 and aim for R&D investment-to-sales ratio of 3% by 2020, and in order to maximize R&D capabilities on a global level. The Global Innovation Center in Yokohama will be dedicated in December. It will serve as a hub for all Shiseido innovation centers around the world. The company will also establish the technology innovation center in Boston.