It has outlined plans to establish SEA “a new strategic region”, highlighting it as a “promising market”, especially with the luxury beauty segment poised for growth.
The company has a modest presence in SEA nations like Singapore, Malaysia, and Thailand with brands such as POLA, Orbis, and THREE.
Over the last few years, the company has expanded its sales channels in SEA, especially for is prestige flagship brand POLA, which has been positioned as the firm’s “most important brand during this three-year period”.
One of the priorities was to continue expanding POLA customer contact points to accelerate growth moving forward.
This would include offline touchpoints where consumers can experience the brand philosophy through beauty treatments.
Furthermore, the company said it could develop regional-exclusive products localised for the market.
With SEA in play, the company expects POLA’s overseas net sales to grow at a compound annual growth rate (CAGR) of 12% to 13%.
By 2026, the company hopes overseas sales will account for 20% of the business. At present, it accounts for 16.7%.
This was laid out as part of the firm’s 2024 to 2026 medium-term management plan during the firm’s 2023 full year earnings conference.
In addition, the company said it was eyeing an expansion into North America and will “swiftly formulate growth scenarios and implement trial rollouts” over the next few years.
China still ‘top priority’ market
This follows the weakened market environment in China for Japanese brands in the aftermath of Japan’s decision to release treated Fukushima water into the Pacific Ocean.
The company emphasised its commitment to China, highlighting its importance as a “main key market” for the growth potential of the high-end skin care market.
Moving forward, the firm said it would keep a close watch on China, particularly due to uncertainties surrounding economic conditions and consumption trends.
The company recently established its regional headquarters in Shanghai, China “to consolidate common operations at existing local subsidiaries with the aim of upgrading operations and improving efficiency.”
Against a challenging market, the group reported that net sales increased by 4.2% to JPY173.3bn (USD1.15bn) compared to JPY166.3bn (USD) the year before.
Operating income increased by 27.8% to 16.1bn (USD107.4m) compared to JPY12.6bn (USD84m) the year before.
