TOKYO, Dec 18 (Reuters) - Japanese cosmetics maker Shiseido Co Ltd aims to double China sales as part of a new business plan, investing in operations and e-commerce in the world’s second-biggest economy as it seeks to make up ground lost to international rivals.
Shiseido has set itself a target of boosting overall sales by at least a third to 1 trillion yen ($8.4 billion) by 2020. Of that, Chief Executive Masahiko Uotani said, China sales are expected to climb to around 200 billion yen, roughly twice the last fiscal year’s amount.
“China store sales are expected to rise between 5-10 percent but it’s in e-commerce, that we see an extraordinary opportunity,” Masahiko Uotani, who has previously headed Coca Cola Co’s Japan operations, told Reuters in an interview. A marketing expert who took charge in April, Uotani is the first Shiseido president to come from outside the company’s ranks.
In its renewed focus on China, Shiseido is seeking to catch up with nimbler South Korean cosmetic rivals. Helped by keen pricing and the growing popularity of South Korean TV shows and pop music, firms like Amorepacific Corp have won over mainland Chinese consumers.
“Until March of this (fiscal) year, we’re undertaking our biggest survey of what best to do (in China) to date. Once that is done, we’ll be clear on what brands we’ll be selling to which customers and through which channels, and we’ll be able to move forward with developing products for 2016,” Uotani said.
Uotani said Shiseido plans to make its e-commerce business an independent operation, mindful that many Chinese consumers prefer the convenience, and often lower prices, offered by online shopping.
Key to success will be investing more in local personnel, according to Uotani. The company has hired 10 local executives since July, mostly with e-commerce or marketing expertise, and no longer requires that its Chinese executives have Japanese ability.
Shiseido also plans to develop more products inside China as it reduces old China inventory and builds up its ranks of beauty consultants in the country, he said.
Shiseido’s shares have lost 4 percent since it unveiled broad details of its new business plan on Wednesday. Its shares are largely flat for the year to date, giving up gains of as much as 14 percent earlier in the year that had been made on hopes for restructuring under Uotani.
$1 = 118.4700 yen Reporting by Ritsuko Shimizu; Writing by Edwina Gibbs; Editing by Kenneth Maxwell