The Japanese beauty and personal care major held a conference on November 29 to outline its strategies for 2025 and 2026.
Kentaro Fujiwara, president and chief operating officer said the firm was in a ‘critical situation’ and needed to reinforce its foundations to ensure sustainable growth.
“Since the COVID crisis, we have been affected by many changes in the external environment and we have responded quickly each time. But as a result, we have not achieved our initial plans. In response to this, the management team feels a strong sense of crisis and has reviewed all aspects of our future planning,” said Fujiwara.
Previously, the company announced that Fujiwara would take over the role of chief executive from Masahiko Uotani with effect from January 1, 2025.
Fujiwara highlighted the importance of “refining the brand assets” that Shiseido has accumulated to reinforce its foundation over the next two years.
All-star line-up
The company has prioritised eight brands, including three core brands: SHISEIDO, Clé de Peau Beauté, and NARS.
These are the brands that have already exceeded half a billion in sales globally.
“We will sharpen brand values, strengthen marketing, focus on the hero products, accelerate growth in the Americas, EMEA and Asia Pacific, and maintain gross momentum in Japan. For China and travel retail, we will not set overly ambitious growth targets but aim for sales growth and profit expansion that is rooted in brand value,” said Fujiwara.
Shiseido also identified five brand, which it has dubbed ‘the next five’ as its next major growth drivers.
This includes Anessa, Elixir, Drunk Elephant, Narciso Rodriguez, and Issey Miyake.
“In the next few years, the priority for the next five brands will be to achieve growth by capturing local needs in their current core markets and to establish a revenue base. The idea is that by improving profitability in their main markets and becoming strong brands that can self-fund, they will be able to actively expand into other regions,” said Fujiwara.
He added that the company believes these five brands have the potential to become as big as its three core brands.
The company will focus its investments on these eight brands for the next two years.
“As part of our strategy to strengthen our brand power, we will be making an additional 30 billion yen marketing investment over a two-year period from the base year of 2024. In particular, we will be focusing our investment on the core three and next five,” said Fujiwara.
“The core three and next five brands already have higher brand margins than the average, so concentrating investment to accelerate growth will also lead to improvements in the company-wide brand mix and profitability”
He added that the company would also consider “strategic brand withdrawals and reductions” moving forward.
3 Key brand strategies
During the presentation, Fujiwara also highlighted the some of its growth strategies for the brands.
He emphasised the importance of positioning SHISEIDO, its flagship brand, as “the global core of the company”.
He noted that this was of utmost importance as the brand has suffered in China since its dispute with Japan over the treated wastewater release.
“Moving forward, we will aim to strengthen the prestige image through consistent branding spanning from products to consumer experiences, while enhancing value delivery to meet the increasingly diverse needs. This will include further value development of each of the product lines, such as Ultimune, Vital Perfection and Future Solution,” said Fujiwara.
For Clé de Peau Beauté, the company’s focus was to enhance its profitability.
“Going forward, we aim to capture the growth momentum of the luxury market, which is expected to remain strong and establish a solid position as a high-end skin care brand. We will leverage the luxurious brand image, skin science, and strengthen the base makeup category not only in our core market of Asia, but also nurturing the brand in EMEA and the Americas,” said Fujiwara.
For colour cosmetics brand NARS, the company will focus on “skin beauty innovations”, such as its hit product Light Reflecting Foundation.
Furthermore, the company aims to strengthen its global expansion with markets such as India and the Middle East.
Anessa, Elixir, and Drunk Elephant
Anessa, as well as SHISEIDO, are set to be extremely important for the company in the sun care category, Fujiwara added.
“The sun care category is expected to experience high growth globally, driven by factors such as daily use and enhanced product functionality,” he said.
“Our company, based on the philosophy of environmental coexistence, possesses numerous unique and innovative technologies that deliver high effectiveness. We see this as key area where we should aim to expand market share through technological advancement.
“We will not only aim for high growth in suncare with Anessa, the number one suncare brand in Asia, and SHISEIDO sun care products, which have built strong brand value in EMEA in Americas, but also strengthen hybrid products such as skin care UV with SPF and primers, this will help expand our market share in the sun care category.”
Shiseido is aiming to accelerate its growth in Japan while focusing on recovery in the Chinese market.
The brand will leverage its expertise in collagen science and anit-ageing, said Fujiwara.
“Moving forward, we will continue to focus on hero products as part of our strategy of accelerating growth in Japan and Asia Pacific at the same time. We will enhance our focus on profitability in the overseas market and aim for recovery in China as Japan’s number one ageing care brand and an expert in collagen science.”
Lastly, for Drunk Elephant, Fujiwara outlined plans to address its current challenges and regain consumer trust, drive sales, and strengthen its brand presence.
“Drunk Elephant, which is facing challenges this year, urgently needs to focus on recovery in the Americas and EMEA, as well as expanding its loyal user base. We will strengthen investments in hero products, both in-store and through media, while developing tailored communication strategies for each target demographic. This will help us re-engage with consumers and expand our loyal user community.”
