11.06.12
6. Shiseido
Tokyo, Japan
Beauty Sales: $8.3 billion
Key Personnel: Shinzo Maeda, representative director, chairman of the board; Hisayuki Suekawa, representative director, president & CEO; Tatsuomi Takamori, corporate executive officer, domestic cosmetics business; Carsten Fischer, representative director, corporate senior executive officer, Shiseido Americas; Heidi Manheimer, chief executive officer of Shiseido Cosmetics America.
Major Products: Prestige, mass and masstige skincare, hair care, color cosmetics, sun care, fragrances and toiletries. Brand names include Shiseido, Clé de Peau Beauté, Nars, Za, Tsubaki, Senka, Sea Breeze, Elie Saab, Anessa, Benefique, Jean Paul Gaultier, Elixir Superieur, Maquillage, Bare Escentuals.
New Products: Nars Andy Warhol Color Collection, Clé de Peau Beauté Palette Voyage, Shiseido Benefiance Anti-Aging Line, Shiseido Future Solution LX Premium Skincare Line, Bare Escentuals bareMinerals Ready SPF 20 Foundation, BareEscentuals bareMinerals Ready Eyeshadows 4.0-Supernatural Trend Collection, Maquillage True Rouge, Sea Breeze Deep-Clean Astringent Actives.
Comments: Shiseido, which describes itself as “a global player representing Asia, with its origins in Japan,” celebrated its 140th year in business in 2012, and welcomed Hisayuki Suekawa as president and CEO. For the year ended March 31, 2012, net sales rose 1.7% to $8.3 billion. Domestic sales, which account for more than 50% of Shiseido’s total sales, remained pretty much flat at $4.3 billion, due in part, according to Shiseido, to the lingering results of the Great East Japan Earthquake. The company held a celebration to mark its 30th anniversary of doing business in China. It also announced a new tagline for its 2010 acquisition, Bare Escentuals—“Be a Force of Beauty”—to celebrate the brand’s 35th anniversary amidst a major campaign.
Overseas sales continued to grow strongly, increasing by double digits (11%) on a local currency basis in all regions, from the Americas and Europe to Asia and Oceania. The overseas sales ratio increased 1.4 percentage points to 44.3 percent. Shiseido credited the increase to strong growth in Europe and North America, sustained high growth rates in Asia and a healthy performance by the professional business. Also adding to global success was the addition of the Nars makeup brand and a good start to online sales in the U.S.
In the year ended March 2012, the first year of the company’s Three-Year Plan, investment was heavy in marketing for its top priorities: future growth in Japan and overseas (where it is aiming for increasing its ratio to 50%). This foundation is intended to set the stage for solid growth in the year ending March 2013.
To boost sales and perceived value, Shiseido cut the number of new product launches in half and focused on existing lines. This freed up manpower and reallocated funds for R&D, sales activities, and assistance at sales counters. Shiseido says that changes such as these led to multiple hit products including Essence Glamorous Rouge in the Maquillage line, which it describes as “an overwhelming success” that has sold more than one million units.
In department stores, Shiseido implemented activities programs that made direct contact with customers’ skin, and used beauty equipment at sales counters, with great results. In addition, Shiseido focused on season-specific promotions at counters. At the same time, the company worked to increase sales at drugstores and general merchandise stores, increasing the use of in-store promotions and providing samples via its website.
Shiseido was selected as one of the 2012 World’s Most Ethical Companies by the Ethisphere Institute, a U.S.-based international think tank dedicated to advocating best practices in business in such areas as corporate ethics and CSR.
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Jennifer Connelly serves as global spokesperson for the Shiseido Future Solution LX Line. |
In April 2012, in efforts to improve sales in Japan, a new business model using the Internet became a core domestic initiative. It is described as an entirely new initiative designed to expand the number of regular Shiseido customers by combining the strengths of the Internet and brick-and-mortar stores.
In addition to intense online sales efforts in the U.S., in June, the company announced three key changes to its organizational structure in the U.S. Specifically, the company will align the U.S. finance, legal and human resources functions of its premier consumer brands, including Bare Escentuals, Beauté Prestige International USA, Nars and Shiseido, into a unified, shared services platform. The company will consolidate its U.S. distribution operations for most of its brands at its distribution center in Columbus, OH, which will become the Shiseido Americas Distribution Center. Finally, Shiseido will merge its U.S. manufacturing business, Shiseido America Inc. into its Americas umbrella organization, Shiseido Americas Corporation.
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Shiseido’s Radiant Lifting Foundation and Lacquer Rouge feature advanced concepts. |
In order to move ahead in the global beauty marketplace, Shiseido is focusing on a number of key mega brands, such as skin care and makeup brand Za. In September, the company launched Za in the Japanese market.
Also in September, Chinese model Sui He was introduced as the newest face of the Shiseido Makeup line globally, and for Shiseido skin care and sun care in Asia.
In fiscal 2013, Shiseido said it will continue its efforts to enhance its presence in the prestige cosmetics market centering on the European market; strengthen and support its family of brands in the U.S. market; ensure sustainable growth in Asian markets, including China; and expand points of contact with customers in the masstige market in Asia.
