"China is one of the most important countries for our overseas business operations, it is a huge market, backed by a population of about 1.2 billion, about 10 times Japan's population," said Tadakatsu Saito, director of Shiseido.
In late September, Shiseido launched cosmetics specialty store Huan Cai Kong Jian in Shanghai. Achieving short-term targets to boost overseas sales, the company now plans to open a further four outlets in China.
The Tokyo-based cosmetics company, reported that its net profit in the first half of the current fiscal year fell by more than one-third from a year earlier to 6.56 billion yen, mainly due to weak domestic consumption, however Shiseido declined to reveal the profits of its China-based operations during the same period.
Until the launch of Huan Cai Kong Jian, Shiseido had only been retailing cosmetics in China through department stores. However the business environment in China has been improving, especially since 2001, when the country joined the World Trade Organization.
With the exception of the period during the recent SARS outbreak, the company's sales in China are reported to have been growing at an annual rate of more than 120 percent.
With the Chinese cosmetic market expected to be worth 1.2 trillion yen by 2010, it seems that European markets already targeted at Korea and Japan will also consider expanding further across the continent.
Shiseido's outlets in China are to offer 223 cosmetics items targeting middle-class consumers in major cities. The items will be different to those available from department stores, where Shiseido's expensive Aupres brand is sold.
Shiseido began selling cosmetics at department stores and hotels in Beijing in 1981. Since then, it has been expanding in China by establishing joint ventures and a research facility.
Shiseido has been building up its Aupres brand of cosmetics products since 1994. The Aupres range is sold only in China and also offers men's cosmetics and toiletry products.