The Japanese beauty leader said that although a strong sales recovery in the domestic market was not enough to offset the decline in travel retail, other international markets also reported sales declines. Nars, Drunk Elephant and fragrances were the main areas of growth this year.
In the first year of its Shift 2025 and Beyond growth plan, Shiseido focused on transforming its business model to increase profits, reduce costs, and improve productivity. Key initiatives include launching innovative products aimed at addressing market challenges, particularly in China, and strengthening brand equity.
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Domestically, sales were boosted by consumers resuming activities outside the home and steady economic growth due to the return of foreign tourists. Shiseido attributed the growth to strategic new product launches and enhanced promotions, and said its domestic business was back in the black. Clé de Peau Beauté, Shiseido brand, and Elixir performed well. Shiseido said that although consumers were wary of price increases and its market share expanded each quarter, annual sales were still down 25% compared to 2019 numbers.
In China, although we achieved solid growth in the first half of the year due in part to a weak base in the previous year, deterioration in consumer sentiment affected the market in the second half. Shiseido also underperformed the overall market, which was similarly sluggish during the Double 11 shopping festival in November, affected by consumer boycotts of Japanese products following the release of treated water from Fukushima into the ocean. The company aims to move away from large-scale promotional events to generate more sustainable growth, and cited Shiseido and Clé de Peau Beauté as sales drivers. Our China business also returned to core operating profit as a result of our focus on cost control.
In the rest of Asia-Pacific, Taiwan returned to growth, while South Korea and Southeast Asia performed well. The Nars and Shiseido brands were the driving force behind the region's growth.
In the Americas, Drunk Elephant, Shiseido, Nars, and others performed well, and like-for-like sales increased significantly. Anne Hathaway has signed on as a spokesperson for the Shiseido brand.
In EMEA, sales were driven by Narciso Rodriguez's new fragrance All of Me, as well as Nars and Drunk Elephant, which benefited from increased retail distribution.
Although domestic duty-free sales were strong, duty-free sales in South Korea and Hainan Island remained weak due to inventory adjustments by retailers.
Shiseido revived the Inoui brand, which had been discontinued in 2002, and introduced Nars to India and South Africa.
Shiseido is striving to place more emphasis on skin health and wellness, and in September announced plans to launch an inner beauty brand, Shiseido Beauty Wellness (SBW), starting in February this year.
In July, it invested in biotechnology company Chitose Group and entered into a strategic partnership to produce microalgae-based ingredients for cosmetics and containers.
In December, the company announced it would acquire DDG Skin Care Holdings, the owner of Dr. Dennis Gross Skin Care. The brand is said to be on track to reach his $300 million in retail sales last year.
We have also established an investment fund called Long Term Investments for the Future Ventures (LIFT) to acquire innovative early-stage companies in the beauty and wellness space. At the same time as the announcement, the company announced that it is investing in two small, fast-growing brands: Phi Therapeutics and Patrick Kidd Holdings.
In August, Yoshiharu Fukuhara, grandson of Shiseido's founder and former CEO of Shiseido, passed away at the age of 92. Mr. Fukuhara worked at Shiseido throughout his life and is credited with building the company from a domestic manufacturer into a major corporation. Global player.
Following the management change in January 2023 (former president and CEO Masahiko Uotani became chairman and CEO, and Kentaro Fujiwara became president and COO), Toshinobu Umezu became Shiseido China CEO, formerly Mr. Fujiwara. took over the position of
In February 2024, Shiseido announced that it would invite 1,500 employees in Japan (approximately 3.7% of its global workforce) to take early retirement in order to strengthen growth and profitability.
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