Sales: $2.2 billion.
Key Personnel: Satoshi Suzuki, representative director and president; Naoki Kume, director and vice president; Akira Fujii, director; Yoshikazu Yokote, director; Hideki Komoto, corporate auditor; Kazuya Kugimaru, senior corporate officer; Takuma Kobayashi, senior corporate officer; Noriko Fukuyama, corporate officer; Ken Horikawa, corporate officer; Koji Ogawa, corporate officer.
Major Products: Skin care, cosmetics, personal care and fragrance. Brands include Pola, Orbis, Jurlique, H2O Plus, pdc, Future Labo, Decencia, Orlane and Three.
New Products: B.A. Eye Zone Cream, B.A. Lip Bar Serum, Orbis U anti-aging skin care series, Pola Wrinkle Shot Serum.
Comments: During 2018, the Japanese economy continued on a very gradual recovery track, but sales slowed in the domestic cosmetics market, according to Pola Orbis. In the overseas cosmetics market, modest expansion continued with steady growth in Asia, mainly in China. Consolidated net sales grew 1.7% year on year, reflecting the strong performance of the flagship brand Pola, in addition to the brands under development—Three and Decencia.
The beauty care segment, which consists of flagship brands Pola and Orbis, overseas brands Jurlique and H2O Plus, brands under development and new brands Amplitude, Interim, and Fiveism x Three, saw sales go up 1.8% year-on-year. This segment accounted for 93% of the company’s consolidated net sales. Pola, the company’s largest brand performed especially well, with recorded net sales and operating income exceeding those of the previous year.
Orbis, on the other hand, reported a decline in sales, despite efforts to enhance its presence through the creation of brand differentiation and consistent marketing communication in order to regrow the business. It seems a new brand image and revamped products were not enough to boost sales at Orbis. The overseas brands also experienced deteriorating net sales and operating losses due to sluggish sales in the Chinese and Australian markets.
Brands under development recorded higher net sales than those of the previous year due to the strong performance of Three and Decencia. However, operating income fell below that of the previous year due to further growth investments for the new brands that were added in 2018, namely Amplitude, Itrim, and Fiveism × Three.
In January, the company received approval for a new whitening active ingredient dubbed MKS-518, which prevents spots and freckles by inhibiting melanin accumulation. Pola Orbis is already planning to incorporate the new active ingredient in its products soon.
The company did not fare well in the first quarter of 2019. Compared to the year prior, net sales in the beauty care segment were down 8.3%. These declines partly reflect the impact of China’s E-commerce Law coming into effect and a slowdown in inbound demand in the domestic market.