Retail in Asia


Despite sales growth, Shiseido continues to face challenges in China

Even as net sales increase, Japanese beauty group Shiseido faces continued challenges in China. In its first quarter, Shiseido reported a 4 percent increase in net sales, reaching USD1.6 billion.

But the company experienced sluggish growth due to ongoing concerns surrounding its brand in the Chinese market, resulting in a decline in sales elsewhere.

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While many high-end beauty companies struggle in China due to a decrease in travel retail and reduced discretionary spending, Shiseido, which owns brands like Nars, Drunk Elephant, and Clé de Peau, faces a distinct challenge, following a Chinese boycott of Japanese-owned brands in 2024.

Real-term sales grew by 3.2 percent year-on-year, with the negative growth in China and travel retail gradually narrowing, and steady growth observed in Europe, the United States, and the Asia Pacific region, particularly in Japan.

The impact of lower sales in travel retail was offset by increased income in Japan and other regions. Operating income suffered a loss of JPY8.7 billion, a decrease of JPY19.3 billion compared to the previous year.

Despite these challenges, its high-prestige brand Clé de Peau Beauté achieved success with a 7 percent growth. Drunk Elephant also continued to perform well, growing by 30 percent, more than double the growth in the first quarter of the previous year. The fragrance brand experienced strong growth, primarily driven by Narciso Rodriguez. Elixir also achieved positive growth, with double-digit growth in Japan counterbalancing the negative growth in China.

Anessa also saw growth in Japan and China but was impacted by inventory adjustments in travel retail, resulting in flat year-on-year sales.

Overall, Shiseido observed a return to positive growth in the first quarter. Although sales in China and travel retail fell below the previous year’s levels, this was compensated by growth primarily in Japan, the Americas, and Europe.

By region, a significant highlight was the impressive 20 percent growth in Japan, alongside EMEA (+17 percent), Americas (+9 percent), and Asia-Pacific (+5 percent).

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The company’s business transformation initiatives, including brand selection and focus, strategic investment allocation, have yielded positive results, with strong growth centred around its core brands.

The group has announced price increases in Japan this year, which are expected to take effect from the second quarter onward.