The Japanese beauty behemoth has shown, throughout its history, a knack for securing its relevance in shifting markets – once again, it’s fighting to reclaim the youth.
Shiseido, the world’s ninth-ranked beauty company, has always performed extremely well in its native Asia, with as much as 44% of its sales coming from Japan. It is now ratcheting up efforts in China’s increasingly huge market, as well as continuing to expand in the United States.
The importance of being digital: According to Vogue Business, which profiled Shiseido’s now three-year-old centre of digital excellence, the re-platforming of its brand websites and functions has been core to its recent strategy. Effectively, it is seeking a flexible way to open up the availability of its products to new audiences.
E-commerce in beauty: The transition to a global platform has been essential to the company, which claims that the new stack has led to five times growth over the last half-decade. In China, meanwhile, it claims 30% year-over-year growth for the last three years.
History: Founded in 1872, in what is now Tokyo’s Ginza shopping district, Shiseido was set up by Arinobu Fukuhara a former naval pharmacist who had trained in Western as well as traditional techniques.
His insight was to create an American-style drug store, where the clinic, for medical assessments, was completely detached from the pharmacy that would provide remedies. It was an early importer of novelty items, according to a new piece in the South China Morning Post, and in 1916 made those novelty cosmetics its core business, when it opened up a dedicated cosmetics store.
Even in hard times, its potency remained undimmed, with the company listing on the Tokyo Stock Exchange just five years following surrender.
A lesson in failure: At the beginning of the 1970s, Shiseido attempted a launch across the mainland United States, having seen some success in Hawaii during the previous decade.
The strategy proved to be weak in a market as big as the US, where nobody knew about it. The brand elected instead to supply a select few fashion retailers in major cities like New York, where it launched in Bloomingdales with an exclusive product line. It worked: by the middle of the 1980s, that market began to post close to 40% year-over-year growth.
Diversification: By the 1990s, ultra-premium was beginning to lose its lustre, following the arrival of steep discounters, more affordable to younger consumers. At a similar time, imports to Japan became less onerous to foreign firms, leaving Shiseido exposed. In the face of such an assault, Shiseido began to diversify its ranges to cover less expensive parts of the market.
Sourced from Vogue Business, SCMP.com