Shiseido's new look embraces ethnic diversity

Japanese cosmetics company Shiseido's new direction aims to keep up with the diverse tastes of women in their 30s

When Mr Masahiko Uotani first announced his appointment as chief executive officer of Japanese cosmetics company Shiseido to his two daughters, they had some advice for him.

"They told me, 'Great company, but the younger generation of women is not necessarily familiar with the Shiseido brand.'

"My elder daughter ordered me to work hard to make the brand relevant to the young," says the 62-year-old Japanese in fluent American-accented English during a telephone interview with The Straits Times.

Mr Uotani's daughters - aged 30 and 27 - were definitely onto something.

Although obviously the business of beverages and cosmetics is different, the process of creating brand value and the logic behind it are the same.

MR MASAHIKO UOTANI, chief executive officer of Shiseido, on his position.
The former Coca-Cola Japan chairman is the cosmetics company's first chief executive who was not promoted from within

Available in 88 markets through 16,000 counters, the 144-year-old company is one of the oldest and most established brands in the beauty industry.

It is known for pioneering skin- softening products (its best-selling Eudermine lotion was launched in 1897) and skin-brightening formulas (Japan's first whitening product Peroxide Cucumber was bottled in 1917).

Because of its rich history, the brand has a loyal following among mature women who have grown up with it. But that is not enough, says Mr Uotani, who took over the reins of the company almost two years ago.

The former chairman of Coca- Cola Japan says: "The brand has been successful and a leader in the market. But to get to the next stage, we want to reach the younger consumers, in particular."

That next stage would be reclaiming market share in the beauty industry.

As a whole, the Shiseido group took in 777.7 billion yen (S$9.5 billion) of sales in 2014 - globally, up 2.1 per cent from 2013.

The beauty conglomerate is made up of more than 40 brands, including the premium Cle de Peau Beaute, hip make-up label Nars as well as drugstore brand ZA. Shiseido, the flagship, brings in around a third of the group's business.

However, according to a Financial Times article last year, the Shiseido group had fallen behind its competitors, including its closest domestic rival Kao Corporation, which owns Kanebo Cosmetics and household goods.

The article said "Shiseido sales grew by an average of just 0.2 per cent annually in the eight years to 2013, compared with more than 4 per cent for the sector globally".

To boost sales, the company is repositioning Shiseido.

Specifically, it will focus on women in their 30s. According to a Shiseido spokesman, the brand found that this group, which has a relatively high disposable income, is also the most open to new products and trends.

While Shiseido has always targeted this age group, the spokesman says the brand is beefing up its communications to women in this category with new products and brand visuals created for them.

Shiseido also has products for other age groups, such as its Pureness range for teens and Benefiance range for those in their 50s and older.

From this month, a new series of global advertising campaigns will be launched.

While previous advertising campaigns featured a single, fair Asian face, the latest ones highlight diversity and feature three women of different nationalities posing together: blonde Hungarian model Eniko Mihalik, Dutch model of Egyptian-Moroccan descent Imaan Hammam and Asian-American socialite and model Asia Chow.

Mr Uotani says: "Consumers have evolved. The younger consumers, especially, are knowledgeable and they have plenty of choices. Their needs, purchasing behaviour, lifestyles and definitions of beauty have become very diverse.

"Pop star Lady Gaga has been influencing her fans on how one should have her own kind of beauty - there is no need to look like other people. And we embrace that.

"We want consumers to feel that Shiseido understands them and is relevant to how they want to look."

Store counters will be revamped to enhance communication with customers. New features include modular "social tables" and chairs that can be converted into a cosy space for free, impromptu beauty tutorials.

"We don't want to just have a seller-buyer relationship with our consumers. We want a more open structure," he adds.

For its latest range of products, Shiseido is taking its cue from the popularity of non-invasive aesthetic treatments.

At a press conference in Shanghai last November, the brand's product development executive of the skincare group, Mr Satoshi Yamazaki, shared that more women in their 30s, especially those in China, Japan and Thailand, are turning to aesthetic treatments to brighten their skin.

Because of this, Shiseido's updated four-piece White Lucent range is inspired by procedures such as laser and intense pulsed- light sessions, as well as skin- whitening intravenous drips that are popular among Asian women.

The products claim to penetrate deeper into the skin to lighten recurring dark spots and add radiance with results that are comparable with non-invasive aesthetic treatments.

The latest White Lucent range is positioned as an alternative for those who are less willing to go for invasive procedures but want fairer skin.

Mr Yamazaki added that those who go for frequent non-invasive procedures are also particular about using suitable whitening skincare products afterwards.

So the products are designed to boost the effects of the procedures and are gentle on sensitive post-treatment skin. Available at Shiseido counters from this month, prices start from $90 for a bottle of White Lucent Luminizing Infuser lotion.

Much is resting on Mr Uotani's shoulders to make Shiseido's revamp a success, but he seems to be the right man for the job.

He got off to an unusual start - he is the company's first chief executive who was not promoted from within. According to the Financial Times, since Shiseido's inception as a Western-style pharmacy in 1872, it has been helmed by insiders groomed for the role.

He retired from Coca-Cola Japan in 2011.

Upon his retirement, Mr Uotani, who has a master's degree in business administration from Columbia University, said in an interview that he wanted to help Japanese companies grow globally and "create energy for the younger generation". He set up a marketing consultancy called BrandVision to do that.

Shiseido was one of his clients at BrandVision, which is how he ended up in his current position.

He says: "Because of its sense of urgency to make Shiseido a true global company, it decided to get a chief executive from outside the company. Although obviously the business of beverages and cosmetics is different, the process of creating brand value and the logic behind it are the same."

To better reach out to women in the brand's target group, he jests that he has been relying on his daughters to spread the word about Shiseido.

"They have become the brand's evangelists, so I think its market share among my daughters' friends is going up quickly and that is helpful for me."

A version of this article appeared in the print edition of The Straits Times on January 14, 2016, with the headline 'Beauty in diversity'. Print Edition | Subscribe