Shiseido targets Middle East with joint venture

By Andrew MCDOUGALL contact

- Last updated on GMT

Shiseido targets Middle East with joint venture

Related tags: Middle east

Japanese cosmo-giant Shiseido is planning to expand its coverage in Middle East countries by forming a joint venture by the end of the year that will be based in Dubai.

Shiseido Middle East FZCO will be set up in partnership with local company Creation Alexandre Miya Paris Limited and will import and market products under the global brand SHISEIDO in seven Middle East countries—Bahrain, Jordan, Kuwait, Oman, Saudi Arabia, Qatar, and UAE.

The joint venture will commence business operations in January 2014.

Target

Creation has been marketing products under the SHISEIDO global brand as a local distributor in the Middle East for 16 years, promoting marketing of prestige products as they have in Europe and the United States.

While fragrances account for a major portion of the high-end cosmetics market in the Middle East region, Shiseido managed to establish a presence with its signature skin care products, which are now marketed at 140 stores in the region.

In light of the region’s high market potential underpinned by its large population that includes many affluent consumers, Shiseido has been examining the possibility of direct investment with the aim of further enhancing its market presence.

This has resulted in the establishment of the joint venture with Creation, which is not only equipped with the expertise for selling skin care-centered high-end cosmetics products and a good relationship with the retail sector, but is also well versed in Arab business practices, which the Tokyo-based firm sees as important.

Economy

Although the Middle East’s economy slowed immediately following the Lehman Brothers’ collapse in September 2008, an almost complete recovery was achieved by 2010, underpinned by rising oil prices. The region’s growth trend recovered in 2011 and stable growth is projected to continue.

The high-end cosmetics market in the seven countries combined boasts a market size of 150 billion yen (2012) on a retail value basis, thus exceeding the market in Russia.

Shiseido says that double-digit growth rates are expected to continue, backed by the existing affluent population as well as by expatriates working for foreign businesses, which are also projected to continue to increase.

In the early stages, Shiseido Middle East will focus on disseminating the global brand across the region to reinforce the business base; and in the future, the company will examine the feasibility of handling brands or lines that Shiseido currently carries.

Related topics: Business & Financial

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