Released in March 2018, the new three-year strategy starts from 2018 and plans to support attaining the company’s six-year medium-to-long term 'Vision 2020' plan.
Shiseido’s 'Vision 2020 was first developed in 2014, with the first three years (2015 to 2017) dedicated to rebuilding the business foundation. This revolved around resolving structural issues of both the Japanese and overseas side of the business, along with strengthening investment in marketing.
In 2017, Shiseido went beyond its 2020 target of 1 trillion JPY (€7.6 bn) in sales, three years early. As its attention turns to the next three years, it plans to modify its global management structure to hit a compound annual growth rate (CAGR) of more than 8% between 2018-2020. This rate will be achieved through hitting sales exceeding 1.2 trillion JPY (€9.1 bn), an operating income of over 120 billion JPY (€907 bn), and return on equity (ROE) of more than 14% by 2020.
Its new three-year plan will move onto a new strategy to accelerate growth to help Shiseido become a top three company in the global prestige cosmetics market. This long-term achievement, which it hopes to reach by 2030, places significant emphasis on maintaining its presence in Japan and Asia.
Shiseido will maintain and develop its growth potential and enhance its cosmetics and personal care business. It will plough a combined sum of 120 billion JPY (€907 mn) in annual increments between 2018-2020 as an additional investment in marketing.
It will input its energy into creating breakthrough products, retail collaboration, upgrades in visual merchandising, brand shop expansion, and the optimisation of digital communication through social media to maximise brand experience opportunities.
Cross-border marketing will be a key focus area, specifically Chinese consumers, along with the Asian markets and global beauty buyers.
Prestige will remain top of the agenda as the Japanese multinational personal care company aims to boost its make up and fragrance sales in the global prestige market, along with concentrating on its biggest beauty sphere, skin care.
In Asia, four brands that are currently marketed mainly in Japan — Elixir, Anessa, Senka and Integrate — will be introduced to Chinese demographics as well as wider Asian markets. Research and development efforts will strive to understand shoppers, and Shiseido will also team up with retailers to produce products with high-added value that create strong brand power.
Digitalisation and new business development is also a strong priority as Shiseido plans to increase its alliance with big e-commerce names, integrate its in-store customer data as customers enter stores and encourage best customer relationship management practices.
Over the next three years, Shiseido will explore new segments within cosmetics including such as artificial skin, hair and skin regeneration, and advanced beauty care. To help make this happen, the company will up its R&D initiatives by bringing its number of personnel to 1,500 and reach an R＆D investment-to-sales ratio of 3% by 2020.
- Hubs, innovation and business knowledge
Shiseido's 'Global Innovation Centre' will act as a global innovations hub. It will start its operations in Yokohama Minato Mirai 21, from December 2018. The company will also open training facilities and launch its MBA programme for employees.
In line with its global management model, the personal care name will pursue the success of its four 'Centers of Excellence' (COE), first established in 2016, by levering knowledge and expertise through new facilities such as the poised 'Technology Innovation Centre' in Boston, US.
In terms of Shiseido’s regional headquarters, Japan, China, Asia Pacific and Travel Retail will strive to accelerate its growth, with individual pockets of focus taking shape in each of these regions.
Japan will concentrate on the skin care, base make up and sun care sectors. The company will also focus on appealing to the younger generations and children of baby boomers, along with increasing the contact point opportunities for consumers.
In China, Shiseido main areas of interest will be the acceleration of prestige brands growth and digital opportunities. Asia Pacific as a whole will position itself as a solid base for cosmetics and personal care, along with growing its prestige brand sector.