Japanese beauty group Shiseido is taking steps to enhance its prestige/premium brand portfolio – which has been key to the house’s strong growth in the travel retail channel. In the nine months to September, travel retail overtook EMEA to become the company’s fourth biggest segment (see chart below).
Shiseido is dissolving its Global Prestige Brands Division due to the restructuring of its brand holding organisations. The Clé de Peau Beauté and Shiseido units within the division are to be made independent while both the Elixir and Anessa brands – currently part of Shiseido Japan – will be established as new global brand units.
The purpose says Shiseido is “to further drive the growth of our business and enhance the presence of our brands not only in Japan but also in Asian, European, and North American markets, and to increase our presence in the global market”.
Meanwhile the newly-established The Ginza global brand unit will accelerate its growth in Asia.
The plans – effective from 1 January 2020 – are part of a wider reorganisation that establishes a Corporate Transformation Acceleration Division. It will supervise three departments: Corporate Strategy; Consumer & Market Intelligence (yet to be established); and Business Development as part of the group’s implementation of CEO Masahiko Uotani’s Vision 2020.
Relevance to travel retail
The Elixir and Anessa brands are both part of the ‘Made in Japan’ proposition that is popular with travelling consumers, particularly in Asia.
In the nine months to September 2019, Shiseido’s prestige brands drove total company growth (see revenue bridge below) with sales from Elixir and Anessa increasing by +19% and +9% respectively.
Total sales for Shiseido in the period grew like-for-like by +7.7% to reach ¥846.6 billion (US$7.75 billion) of which travel retail contributed ¥78.0 billion (US$71.4 million), growing by a stellar +25%.
Shiseido Chief Financial Officer Michael Coombs commented: “Prestige and skincare is steadily paying off and fuelling rapid growth in our core brands, propelled by focused marketing investment. In cosmetics, made-in-Japan brands, Anessa and Elixir have shown solid performance.”
In the third quarter, sell-out at Shiseido’s travel retail division of more than +20% (+30% in Asia) was boosted by prestige cosmetics. The key brand drivers were Shiseido and Clé de Peau Beauté (both aided by successful launches), plus Anessa and Nars.
The opening of the first Clé de Peau Beauté counters in Dubai and Istanbul airports both helped the growth. The company added: “We strategically reinforced our presence in South Korea and China where we enjoyed our highest growth of over +40%.”
In addition, the new Beijing Daxing International Airport, opened in September, is a door that could see focus on both Anessa and Elixir. Shiseido said: “This new mega airport hub is a key strategic location for our travel retail business. We have already opened ten counters for our prestige and cosmetics core brands and are aiming for further sales expansion.”
