Beauty Industry

Shiseido Sets Sights on Chinese Market

The Japanese cosmetics maker plans to introduce lower-priced items as market grows.

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By: Jamie Matusow

Editor-in-Chief

The Wall Street Journal reports that Hisayuki Suekawa, Shiseido’s incoming chief executive, said the company plans to ramp up distribution in China of masstige products, a cross between mass market and prestige items, which typically sell for about $10. “We would start with skin care products, which is the field in which we excel,” says Suekawa, who, at 51 years old will be the company’s youngest CEO ever.

According to WSJ, The appetite for quality makeup and skin care products among China’s increasingly affluent female shoppers has been ratcheting up steadily over the past decade, leading Shiseido and rivals Estée Lauder and Procter & Gamble to increase their marketing and sales outlets in their fastest-growing market. Shiseido values China’s cosmetics market at 1.4 trillion yen ($17 billion) and puts the country’s number of cosmetics users at about 60 million, outstripping Japan. Shiseido, Japan’s biggest cosmetics maker by revenue, expects domestic sales to decline by 2% in the fiscal year that ends March 31 but that sales in China will grow more than 10%.

Shiseido’s recently introduced Senka skin care products, which sell for around 1,000 yen in Japan, are expected to hit the Chinese market this year, having been introduced in Taiwan late last year.

The no-frills packaging and plastic refill pouches have appealed to Japanese women, who were once among the world’s highest spenders on makeup but lately have cut back on spending .

Japan’s market for low-end skin care products—priced at 1,000 yen or less—increased 3.3% in fiscal 2009 from fiscal 2006, while the market scale of mid- to high-end products slumped 2.2%, according to Intage SRI, a Japanese marketing and research group.

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