TOKYO: Shiseido, the Japanese beauty products firm, is responding to younger consumers’ preference to shop online and to try out new technologies by acquiring a number of US-based tech firms that specialise in the personal care industry.

Speaking to Bloomberg, Shiseido CEO Masahiko Uotani explained that an increasing number of its customers, especially those in their teens and twenties, now shop online, so bypassing the advice offered by physical store sales assistants.

China alone accounts for a quarter of the company’s business – and this is expected to increase to almost 40% by 2021 – and young consumers in China, perhaps more than any other market, are driving change in shopping habits.

“Particularly with the younger generation, often they don’t go into the stores. The way they buy, the way they share their excitement with their friends, is completely different from older generations,” Uotani said.

With this in mind, Shiseido has been busy acquiring a number of start-ups in Silicon Valley and other tech hubs to be in a position to offer customers the benefits of artificial intelligence and other emerging technologies.

High on the list of priorities for the company is the ability to help customers find the right product online and to gather data to create personalised makeup capabilities.

For example, Shiseido acquired Giaran last November, a Boston-based firm that now works with California-based MatchCo – another Shiseido acquisition – to develop simulation AI technology.

That enables Shiseido customers to use their mobile devices or desktops to apply and remove makeup in a virtual environment so they can see how they appear before making a purchase.

L'Oréal, its French rival, is also rapidly moving into advanced technology and last month announced that it had acquired ModiFace, a Canadian start-up that is another leader in the development of augmented reality and artificial intelligence for beauty products.

Industry observers expect the trend to continue, with Deborah Aitken, an analyst with Bloomberg Intelligence, commenting: “We will definitely see more.”

She said beauty companies have to respond to the shift by customers, especially in Asia, of going online for their requirements.

Sourced from Bloomberg, Shiseido, L'Oréal; additional content by WARC staff