In 2020, global economic conditions remained challenging, as economic activity stagnated due to the COVID-19 outbreak.
Despite this, president and CEO of Shiseido APAC Nicole Tan, believes that the APAC market has been resilient in the face of the pandemic’s uncertainty.
“This has been a challenging year all round. However, APAC as a region has weathered the storm better than our counterparts in Europe and the Americas and this is in line with overall recovery situation on the pandemic.”
The company has started to see recovery from the third quarter of 2020 as many markets began to ease out of lockdown.
The recovery was also driven by the firm’s strong portfolio of complexion products from brands like NARS and Laura Mercier, as well as sensitive skin products such as its d program range.
Additionally, the acceleration of its online business helped to improve the accessibility of its products.
Tan, who was appointed to the role in September 2020, expects this momentum to continue into 2021 and told CosmeticsDesign-Asia that she was optimistic about the general outlook for Shiseido’s brands in 2021.
In APAC, the firm has identified SEA as a region with high potential that offers an attractive, sizeable pie presented by the general demographics of the population.
“Markets such as Indonesia, the Philippines and Vietnam for instance are characterised by a relatively young population and an emerging middle class. This resonates closely with our target consumer profile,” said Tan.
This sizable population is increasingly picking up digital habits, presenting huge opportunities for companies like Shiseido to gain exposure with consumers in the region.
Based on a recent e-Conomy SEA 2020 report by Google, Temasek and Bain, 70% of the region’s population are now online.
“Brand accessibility through e-commerce platforms also provide unprecedented reach and availability of our products,” said Tan
Among the SEA countries, the Vietnam market, in particular, performed remarkably well and managed to outperform year-on-year.
Tan said the firm was one of the very few companies in the market which did not embark on any redundancies, even for frontline beauty consultants, during the period of store closures.
The group has operated a full affiliate in Vietnam since 2010 and has been growing strongly ever since.
“Our performance in Vietnam has been strong even before the onset of COVID-19. This is attributed to the strong performance of our cosmetics and personal care business alongside growth in the prestige segment.”
Tan added that Vietnam presented opportunities with the government’s investment in expanding the digital economy.
“We hear that it is to reach USD52bn by 2025 based on a recent market briefing report. Given Shiseido’s strong positioning in Vietnam and leveraging on the government support on digital, there is a huge opportunity for us to grow further as well.”
Shiseido is also eyeing great opportunities in the India market.
“India is also a very interesting opportunity for us. Our presence is very limited today as we currently work with a distributor for our fragrance brands as well as brand Shiseido,” said Tan.
She elaborated that the firm saw huge opportunities for its skin care and make-up portfolio among the younger demographic and the market’s ‘traditional affinity for beauty’, she said.
Diversity presents opportunities
Tan highlighted that the diversity of the APAC markets presents opportunities for growth for the firm.
“In terms of needs, APAC markets have specific needs particularly in skincare and makeup arising from climatic and racial diversity. For example, consumers in SEA show a greater need for skin care products which address acne. Also, there is a preference for lighter product textures and skin care products which do not leave a ‘sticky feel’ on the skin due to the general humidity in this region.”
She elaborated that such specific needs would give rise to product segment opportunities that firms can tap into through innovation and product development.
“With the racial diversity from SEA through Oceania, we also see a need to offer a more extensive shade palette in foundations and complexion products to cater to a wider spectrum of skin tones.”
Furthermore, there are different preferences arising from beliefs, religion, cultural norms – such as halal compliance.
“We have to be highly cognizant of such preferences in decision making associated with product assortment and appropriate marketing strategies. Managing the non-homogeneity is quite complex,” said Tan.
Coupled with the COVID-19 pandemic, the firm is up against challenges in the coming year, said Tan.
“Having said that, I do see this period as a good opportunity. After all, when there is a down, there will always be an up.”
For instance, she elaborated, this period has pushed the company to pivot towards e-commerce and strengthen its digital arm.
“I see this as a huge enabler in helping me to leapfrog internal conversations so that we can further accelerate our businesses online. I like to challenge the team to look at things through a different lens from what has always been done and we have done just that in the past few months.”
She concluded: “As long as we talk with relevance to the consumers and as long as we continue to provide that connection, I am cautiously optimistic about the outlook.”