New Strategy of Shiseido in 150th Anniversary for Better Future in China

Today, Shiseido Group's 150th Anniversary China Reception was held simultaneously in Shanghai and online.

---

After 41 years in China, China has become the engine of growth for the Shiseido Group, but it is also facing a growth bottleneck. Standing at the 150th anniversary historical point, how will Shiseido invest in China and win itself? And what new trends in the industry will be revealed next year?

Shiseido to add oral beauty business segment in 2023

China's oral beauty market is experiencing a period of rapid growth. Tmall Global data shows that the turnover of oral beauty products increased 2,266% year-on-year during Chinese 618 Shopping Festival in 2022. Market data released by Straits Research shows that the global oral beauty market size will grow from $7.343 billion in 2021 to $15.816 billion in 2030, with a CAGR of 9%. Among them, Asia Pacific ranks first in the global market share of oral beauty products, with Japan forecast to hold 31% market share in 2022, while China's oral beauty market is expected to reach 28% of the global market by 2022 and is expected to become the second largest oral beauty market in Asia Pacific.

In line with this trend, Shiseido will also bet on the oral beauty market in the future. Lai Peiyun, Head of Oral Beauty Division, Shiseido China said that China's oral beauty market will enter a period of rapid development, and the market size can reach nearly 26 billion yuan in 2025. Sheseido will establish a global oral beauty business unit in 2023, oral beauty will become the Shiseido Group's third largest category expect its skincare and color cosmetics. In addition, Shiseido's INRYU was launched in China and Japan simultaneously. After the launch, it received a lot of positive reviews from anonymous consumers, saying that the good effect of skin elasticity firming and lightning of wrinkles fine lines. Lai Peiyun said “Shiseido currently has 10 oral beauty brands in Japan, and will focus on China in the future to expand its oral beauty business to the world.”

At the meeting, Shiseido also said that although it had not previously been very profoundly established in new areas, it is trying to develop the beauty solutions such as uh medical beauty or beauty device or inner beauty. It is worth noting that in August, Shiseido invested in Chinese company Trautec, which focuses on recombinant collagen biomaterials. At the reception, Shiseido and Trautec officially signed a strategic cooperation agreement on medical aesthetics. This move also reflects Shiseido's determination to explore the medical beauty series.

Strong development of green and sustainable roads

Moreover, in the context of the "double carbon" target, Shiseido will also inject green power into its development in China. Kentaro Fujiwara revealed that Shiseido China has decided to gradually increase the promotion of replacement packs, and it is expected that more than 150 individual products will be available for Chinese consumers in 2023. Many products that are loved by consumers will be launched with replacement pack options. Shiseido China also held a signing ceremony with Alibaba to promote the strategic cooperation of replacement packs.

Another beauty group, P&G, also adheres to a sustainable path. In the 2021 China International Import Expo, P&G has developed its own, innovative green e-commerce packaging, the "Air Capsule". It is made of 100% single recyclable material, using 0 cost 0 waste air as the core resource, replacing the combination of cardboard boxes plus filling protection. This year, P&G upgraded the "air capsule" in terms of material, structure and size, adding recycled plastic PCR to the materials used in production, which can be widely used in e-commerce packaging for toiletries, perfumes, cosmetics, razors, cell phones, electric toothbrushes, jewelry and accessories, health care products, pharmaceuticals, apparel, etc. It is more environmentally friendly and convenient.

Shiseido Sprint 1-trillion-yen target next year again

In addition to investing in the Trautec, Shiseido will also build the second largest R&D center in the world in China, with the aim of incubating local innovation and accelerating open source innovation.

In September 2022, L'Oréal China announced that its subsidiary Shanghai Meicifang Investment Co. In October 2022, the foundation of L'Oréal Suzhou Intelligent Operation Center was officially laid. Unilever's high-end beauty division also set up a joint venture, GoUni, with Hangzhou Golong Holdings Co. to jointly promote a team of local up-and-coming high-end beauty brands.

It can be seen that international beauty groups still believe that the Chinese beauty market has great potential. As L'Oréal North Asia President and CEO of China, Fabrice, has said, "Competition is driving higher quality product innovation, which is good for consumers and the market. In China, the beauty market still has a lot of potential, which means that we don't need to compete fiercely with our peers, but rather we all work together to provide better beauty products to consumers, thus contributing to the market's continued growth."

Looking back on its journey in China, Shiseido said, Shiseido in China has changed from coming to China to invest to today investing in China. Shiseido has gone from introducing other international products to China at the beginning and then localizing them, to exporting innovation, finall it participates in local innovation. Shiseido said that this series of actions reflect the importance of the Chinese market to Shiseido. The incoming new CEO of Shiseido China, Masahiko Uotani, said that he will continue to work hard to deepen the Chinese market and set new heights.