Chinese buyers buoy Shiseido sales

One of Japan's leading personal care companies has reported strong demand for its products from Chinese visitors to the country, despite weaker growth in the Chinese market itself.


The latest figures from Shiseido Co Ltd revealed its 2015 annual sales rose 12.6 percent to 763.1 billion yen ($6.7 billion). Analysts said that the increase was helped significantly by Chinese tourist sales.


The group's operating income rose 77.4 percent to 37.7 billion yen, but its China business grew by just 2 percent.


"We have seen a substantial increase, both in sales and income, mainly due to our major brands in the domestic market," said Norio Tadakawa, its corporate officer and CFO, who added both its operations in Beijing and Shanghai struggled last year.


Sales at its Shanghai outlet have been flat for several years, he said, adding the firm is now planning to reverse that with a targeted 10 percent growth this year in China.


In the medium to longer term, he said, "we are seeing more of the middle-class market, so we will keep on expanding consumption and diversification" of products, adding its e-commerce business is expected to grow 20 percent in China.


Tadakawa said Shiseido is also planning a new innovation center in China, which will help the firm grow market share.


He admitted, however, that competition from South Korean brands is intensifying, making its job in China harder.


According to Kantar Worldpanel China, sales of South Korean cosmetic brands are now growing faster than Japanese brands, at 33 percent compared with 11.6 percent, focused mainly on high-end products.


Shiseido's results followed closely on the heels of those from Japanese beauty care rival Kao Corp, which announced net sales increased 5 percent compared with the previous year to 1.47 trillion yen for the year ended Dec 31.


Its profits increased, said officials, due to the effect of increased sales of healthcare products in markets across Asia.


The article transsshipment from China Daily