Beauty Sales:

$9 billion

Key Personnel:

• Masahiko Uotani, president and CEO
• Yukari Suzuki, CMO, chief D&I officer
• Norio Tadakawa, CEO, Japan region
• Takayuki Yokota, CFO
• Kentaro Fujiwara, CEO, China region
• Yoshiaki Okabe, chief brand officer, CTO
• Mizuki Hashimoto, chief brand officer, Clé de Peau Beauté
• Antonios Spiliotopoulos, chief supply network officer
• Ryota Yukisada, chief brand officer, Shiseido

Major Products/Brands:

Prestige cosmetics and fragrances—Baum, Benefique, Clé de Peau, Dolce&Gabbana, Drunk Elephant, Effectim, Ípsa, Issey Miyake, Nars, Narciso Rodriguez, Serge Lutens, Shiseido, The Ginza, Tory Burch

Mid-priced cosmetics—Anessa, Aqualabel, Aupres, D Program, Elixir, Gracy, Haku, Integrate, Majolica Majorca, Maquillage, Prior, Revital, Urara

Professional—Shiseido Professional

Health Care—The Collagen

Life Quality Beauty—Perfect Cover Shiseido

New Products:

Sidekick cosmetics, Ulé skin care, Inryu inner beauty; Shiseido—Essential Energy hydrating cream, Future Solutions LX Infinite Treatment Primer; Drunk Elephant—A-Gloei Maretinol Oil; Clé de Peau—Key Radiance Care limited 40th anniversary packaging, Sérum Éclat S; Elixir—Day Care Revolution; Nars—Light Reflecting foundation; Maquillage—Dramatic Essence Liquid; Sun Care—Anessa Day Serum; Shiseido Men

Comments:

In the fiscal year 2021, global economic conditions remained challenging as the Covid-19 pandemic continued to impact economic activity, and consumer sentiment was low due to worsening corporate earnings and employment. In Japan’s cosmetics market, consumer traffic was affected by shortened operating hours in the retail sector and consumers staying at home under the intermittent states of emergency. Other factors included a decline in visitors to Japan, which affected inbound demand.

Despite the impact of the pandemic overall, progress in vaccination rollout drove recovery, particularly in Europe and the United States. As a result, Shiseido managed to recover net sales in all regions except Japan. Based on reported figures, net sales increased 12.4% year on year to $9 billion.

Regionally, despite a sizable sales dip of 8.9% in Japan, Shiseido’s domestic market still accounted for 26.7% (¥276.1 billion) of sales, followed by China, Americas, Travel Retail, EMEA, Asia Pacific, Other and Professional.

In Japan, Shiseido strategically strengthened investment in the skin beauty category in line with new consumer needs prompted by the Covid-19 pandemic and achieved market share gains, mainly in base makeup and sun care. In addition, the company engaged with a large number of consumers through various omnichannel initiatives in collaboration with business partners, such as live commerce events and online video counseling. Consequently, e-commerce sales grew by double digits. Shiseido also continued activities started last year aimed at maximizing the value it provides to consumers, in particular, agile development and launch of products that address changes in consumer needs, such as BB cream that stays put even under a mask, and revolutionary products with the Second Skin technology.

Sales in China were affected by partial retail closures and a plunge in consumer traffic due to unprecedented torrential rains in the third quarter and new Covid-19 variant outbreaks in key metropolitan areas. However, e-commerce remained strong thanks to strategic investment and accounted for high 40% of total sales, mainly due to sales growth well above the market for the Singles’ Day, China’s largest e-commerce event. Overall, continued strategic investment in prestige brands drove market share gains in the high-end category, specifically for Clé de Peau Beauté and NARS. Net sales in China grew 16.6% year-on-year to $2,386.5 million.

Net sales in Shiseido’s Asia Pacific business increased 9.9% year-on-year to $564.7 million thanks to further expansion into key e-commerce platforms in various regions and robust growth of prestige brands, including Shiseido and NARS.

In the Americas, vaccination rollout drove the recovery of the cosmetics market, including makeup, which had struggled. U.S.-based skincare brand Drunk Elephant opened new doors, while NARS grew its share due to virtual store openings and other digital marketing initiatives. In addition, SHISEIDO, Clé de Peau Beauté, and fragrance brands also performed well on the back of strengthened promotions. As a result, net sales rose 32.8% year-on-year to $1,054.3 million.

In the EMEA region, vaccination rollout aided market recovery in skincare and fragrances. Shiseido succeeded in capturing this turnaround to increase share in all categories through further rollout of its Clé de Peau Beauté and Drunk Elephant brands and e-commerce sales expansion thanks to online video counseling and digital promotions.

Shiseido’s travel retail business, which consists of cosmetics and fragrances mainly through airport and downtown duty-free stores, was affected by considerable reductions in international flights and the resulting decline in travelers worldwide, but sales still accelerated significantly, mainly for e-commerce. Net sales grew 22.3% year-on-year to $1,046.4 million.

2021/2022 Highlights:

In August 2021, Shiseido Americas, a subsidiary of Shiseido Company, sold three of its iconic brands—BareMinerals. Buxom Cosmetics, and Laura Mercier—to private equity firm Advent International. Shiseido said it would reinvest the funds from the sale into areas crucial for long-term growth, such as development of key brands and acquisitions, mainly in the skin beauty category, digital transformation, and enhancement of production capabilities and innovations.

In November, Shiseido unveiled Inryu, a new ingestible beauty brand which aims to improve the overall health of skin from the inside. When taken consistently, Inryu reportedly spreads beauty ingredients throughout the body. According to the brand, IN stands for inner beauty, and RYU means to flow.

Shiseido kicked off 2022 with a new advertising campaign celebrating the company’s 150th anniversary. The new campaign communicates the company’s goals for making a sustainable world where people can experience happiness through the power of beauty under its mission “Beauty Innovations for a Better World.”

In January, Shiseido entered a three-year global strategic partnership with internet and technology company Tencent through its China subsidiary, Shiseido China Co., Ltd. Through this partnership, Shiseido will work with Tencent to build a D2C model and strengthen its social commerce business to provide new services to Chinese consumers globally. Applying the know-how learned from this partnership to the entire Shiseido group, the company will strengthen its global growth by accelerating its group-wide digital transformation and enhancing the capability development in terms of digitalization.

In April, Revieve, a personalized digital brand experience company, launched an AI Makeup Advisor experience in collaboration with Shiseido. Consumers can access the Makeup Advisor via Shiseido’s website, where they will be prompted to upload a selfie and answer questions based on desired beauty goals. Based on Revieve’s AI selfie analysis, and user input, customers will receive a comprehensive list of recommended products based on full makeup application including eyes, lips and face. They can then try a product before purchase using true-to-life virtual try-on technology and add products to the virtual shopping cart.

Shiseido also unveiled a new prestige skincare brand “Ulé,” which has a mission to promote botanical, conscious beauty—and is the first skincare brand to grow its ingredients in its own indoor high-tech vertical farm. Ulé’s formulas and packaging are made in France, and the brand minimizes its packaging’s environmental impact. All eight of Ule’s products, consisting of serums, mists and creams, have lids made with Sulapac materials. The launch of Ulé marks the largest product range to date using Sulapac’s solutions.

In June, Shiseido launched Sidekick, a premium skincare brand for Gen-Z men based on the brand’s core value of “hybrid” that combines two different elements to create new value. The Sidekick hybrid skincare products are formulated by combining naturally derived ingredients with advanced technologies, and not only address the specific skin problems of Gen-Z men, such as oily skin and dry skin, but also support the skin’s moisture barrier function with each use, creating a skin environment that is more resilient.

Looking Ahead:

In the first three months of the fiscal year 2022, the global economy showed signs of overall recovery as the impacts of the Covid-19 pandemic eased worldwide. However, the spread of Covid-19 variants and the degree of their impact on the economy varied by country and region resulting in differences in economic climate. In addition, such factors as increasing tension in Ukraine, soaring commodity prices, and lockdowns, specifically in China’s Shanghai region, added to economic uncertainties. As a result, Shiseido’s Q1 net sales decreased 1.3% year-on-year to $1.9 billion.

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