Sales: $6.4 billion
Key Personnel: Masahiko Uotani, president and chief executive officer; Norio Tadakawa, chief financial officer; Ralph Ahrbeck, chief strategy officer and president, China region; Chikako Sekine, chief beauty officer; Yoichi Shimatani, chief research and development officer; Jun Aoki, chief people officer; Jean-Philippe Charrier, president, Asia Pacific; Takahiro Hayashi, chief creative officer; Masaya Hosaka, chief technical strategy officer and chief quality officer; Kiyoshi Ishimoto, chief supply chain officer; Norio Iwasaki, senior vice president, personal care brands, Japan; Naoki Murakami, senior vice president, prestige brands, Japan; Yoshiaki Okabe, Shiseido brand director; Kazuhisa Shibata, chief administration officer; Mikiko Soejima, senior vice president, beauty, Japan; Shigekazu Sugiyama, senior vice president, cosmetics, Japan; Norio Tadakawa, chief financial officer; Shigeru Takano, chairman and president, Shiseido China; Mari Tamura, senior vice president, global prestige brands.
Major Products: Skin care, color cosmetics, sun care, fragrances and toiletries. Brand names include Shiseido, Clé de Peau Beauté, Za, Tsubaki, Senka, Jean Paul Gaultier, Elixir Superieur, Maquillage, Nars, Bare Escentuals.
New Products: Power Infusing Eye Concentrate, Full Lash Serum and Full Lash Volume Mascara, Benefiance WrinkleResist 24 Energizing Essence, White Lucent All Day Brightener, White Lucent Power Brightening Set, Perfecting Stick Concealer, Veiled Rouge lipstick, Glow Enhancing Primer.
Comments: Is Shiseido’s house finally in order? The company’s been long known for effective products in beautiful packaging, but for the last several years, that kind of quality didn’t translate into higher sales. But a turnaround may be underway. Sales rose 2% for the year ended March 31, 2015. Japan accounted for 47% of sales, followed by Asia/Oceania (21.9%), Americas (17.1%) and Europe (14%).
After years of getting hammered by poor conditions in its home market of Japan and being a late entry into emerging markets like China, CEO Masahiko Uotani told investors that Shiseido is changing. First, company executives now know the front lines of the business and understand essential management issues. An important part of that program is the ICHIGAN Project, which involves all employees and includes events in an effort to creating attractive selling spaces across Japan. Outside its home market, Shiseido is in the process of reengineering its China business, and is determined to empower a diverse range of employees throughout the organization. The plan seems to be working, as Shiseido is expanding market share and adding new customers in Japan. Internally, company executives say they are focused on capital cost conscious management and are making structural reforms to address core issues.
These moves are expected to lift sales over ¥900 billion by 2017 and over ¥1 trillion by 2020—all part of its Vision 2020 plan and, not so ironically, the same year that Japan with host the Olympic Games.
To reach the 2017 sales goal, Shiseido is clearly focused on China, where sales actually fell 2% during the previous three years. But by 2017, the company expects sales to grow 9%. In fact, Shiseido executives expect sales growth to improve throughout the world during the next three years. Europe’s CAGR will rise from 1 to 2%, Asia (excluding China) will rise from 3 to 7%, Japan will grow from 1% to 3%, and the Americas will grow from 4% to 6% by 2017.
To help expand its professional business in Asia, last month Shiseido formed a joint venture with the Aura Beaute Group, its current distributor for the Shiseido Professional brand in Indonesia. Shiseido now owns 65% of the JV.
From 2017 to 2020, Shiseido is aiming for a CAGR of 5-7%, driven by new brands, M&A activity and penetration into emerging countries and “unexplored areas.” At the same time, the company will boost R&D spending from 1.8% to 2.5% of sales and increase R&D personnel from 1,000 to 1,500. As part of its “Think Global. Act Local” strategy, Shiseido will set up a global innovation center in Japan and expand its research centers in the US, Europe, Southeast Asia and China.