As Shiseido celebrates its 140th anniversary, chairman Mr. Shinzo Maeda speaks to beautydirectory about a brand that is steeped in history, yet looking to a strong future of innovation, development and growth.
What celebrations are planned for the 140th anniversary?
It’s the 140th anniversary, which as you know is a very long time, but in terms of anniversaries it’s not a big 50, 100 or 150 so it’s not a major celebration. Where we are coming from is wanting to show our appreciation and our thanks to all our customers who have been using our products for a long period of time and we wanted to give something back to the local communities a well.
That’s where we came up with the Mirai Tsubaki Project. This is about all of the employees of the , and there are over 45,000 employees globally, showing appreciation to customers by being involved in community-service type activities. There’s a number of different activities being carried out on a regional and community basis and it’s all about creating beauty and the focus is looking at women, cosmetics, culture and the environment.
In its 140-year history, which product or technology made the most impact on the brand’s success?
There are lots of examples I could give. One of those examples where Shiseido’s cosmetic technology has been very favourably evaluated is by the IFSCC [International Federation of Societies of Cosmetic Chemists]. Once every two years they have a major get together where there’s a presentation of new technologies and awards. It has all of the major players from Europe and the United States joining in, so it’s very much about the cosmetic industry recognising who is leading in various areas of technology.
There are a number of areas where Shiseido has been awarded in scientific areas. If we look at the technological successes and impact on a product-by-product basis, we could look back to Eudermine, which was released by Shiseido in 1897.
What was the degree of impact Eudermine had on the brand?
Eudermine was very much released on the founder of Shiseido’s philosophy, which was to have a fusion of the east and west. And I think you can see that in the product. It is very much a hybrid of the oriental and the occidental. The other key areas of the Shiseido philosophy that this product encapsulates are continuing innovation and a focus on quality. That philosophy is very much carried on today in Shiseido and is something we still value.
This product very much incorporated the Shiseido innovativeness in terms of being a Japanese brand that used western pharmaceutical research in skincare science. What was key was that is was a very safe product of very high quality. Then in 1997 we did a total renewal of Eudermine to the form that it takes today and it became global.
Shiseido began as a Western-style pharmacy in Tokyo's Ginza district. Does the brand still have a presence there?
Shiseido was born in the Ginza in 1872 and today there are three buildings in the Ginza. There’s the head office building, which has been rebuilt from the original one, and there’s also the Shiseido The Ginza building and that’s where people from around the world can experience cosmetics and there’s a lot of information and look at the history of the products. The third building we have in the Ginza is called Tokyo Ginza Shiseido and that building combines culture and cuisine, it has an art gallery and Shiseido parlour and that’s also disseminating information as well. So those three buildings are fulfilling different functions but still have a presence.
The Ginza values and respects tradition, but at the same time it’s able to take on board and run with new things as well ... [it has] the flexibility to innovate and evolve. I think that uniqueness of the Ginza has very much inspired the Shiseido Group’s own journey.
How has Shisedo’s performance in AU and NZ compared to other regions in recent years?
The way I see the Australian market is that it’s in comparatively a better position than other markets. If we look around the world we see that a lot of the European countries are suffering with sovereign debt crises, in the US they’re finding it difficult to resolve their unemployment problem, in Japan we have a declining birth rate and ageing population. Australia, however, is one of the few developed nations that has an increasing population and is looking to increase in the future and it’s economically stable so we really would like to have Australia become a symbol of growth among those developed nations.
New Zealand was one of the early countries that Shiseido entered into in terms of overseas markets, in 1971. Today Shiseido enjoys the rank of third in prestige brands in New Zealand. Of course we would like as quickly as possible to increase that ranking, but we’re still aware and appreciative of the many customers that, thanks to them, we have achieved [this] ranking.
Where does Shiseido perform best for its skincare, hair care and cosmetic lines? In what area of the industry is Shiseido looking to have the most growth?
To break it down broadly on regional lines, for skincare it’s Japan and Asia where Shiseido is very strong. In the US it’s make-up and in the European region it’s fragrances [BPI].
In the future skincare will be an increasingly important category for us. The categories I’ve just mentioned are when you do a geographical breakdown on the map, but then if you look in terms of categories like in the IFSCC, Shiseido’s strength has been all those research and science awards and they very much recognise the internationally sophisticated levels of Shiseido skincare technology so we want to continue with that.
What type of woman personifies the Shisedo brand today?
Aesthetics change from era to era, and what women want is also continually changing. So I think what you could say is, superficially all sorts of things change and we adapt to that, but inherently what Shiseido hasn’t changed is our corporate philosophy. And that it is a universal thing that all women want to be beautiful, and we should be as best we can and as sincerely as possible try and help with that and respond in answering that universal timeless need.
Moving forward, how does Shiseido plan to expand?
The major goals we’re working towards are part of a 10-year plan and were put in place in 2007 – so the aims have been decided and they’re now being implemented. They were, by 2017 to have sales of 1 trillion Yen, to have an operating margin in excess of 12 per cent and to have Japan account for 50 per cent of that turnover and overseas sales account for the other 50 per cent. If we look at the 2011 fiscal year results, overseas sales accounted for 44.3 per cent so there has been a rapid growth and the goal of 50 per cent is looking realistically achievable.
We see that the engine for that growth will be the Asia Pacific region, which incorporates Australia. In particular we see growth will probably be centered on China, but we are also looking at the newly emerging countries and are focusing on putting effort into those. For example, we see cosmetics will be growing in Russia, we’re also interested in focusing on Brazil as it’s the third largest market in the world in terms of size.
When we developed this plan for the 10 years, our aim was to be a global player representing Asia with its origins in Japan so I think that’s key. What I’m saying is it’s very important that Shiseido doesn’t lose its originality or its uniqueness in pursuing that aim.
With the Shiseido as the nucleus we’re looking to expand particularly in the masstige field, where we have brands such as Moisture Mist and Za. We see that as helping have points of reference and points of contact with a diverse group of customers that will then grow the overall Shiseido group. We also have a focus on BPI [Beauté Prestige International] designer fragrances as well.
How has Shiseido adapted its retailing strategy to include e-commerce?
We started e-commerce in 2011 in the US and in China. On the US website the ability to buy online has been added, however in terms of dollar amount it’s not a huge turnover because in the States about 50 per cent of the turnover comes from department stores, perfumeries and so on.
In China we have a brand called Pure Mild and we’ve further developed specialised products in that range and created Pure Mild Sowa. That now has a dedicated site and it’s been very successful with attracting new customers and has a repeat rate of about 30 per cent so that has been growing in terms of sales.
The e-commerce business model in Japan is a new model and is a three-layer approach. On the third floor we have Beauty & Co, on the second floor we have Watashi + [pronounced Watashi Plus”] which were both started in April this year, and on the first floor we have our stores.
The way that business model works is through Beauty & Co, which targets women who are seeking to be more beautiful and is a collaboration between related health and beauty companies. And then Watashi + is another e-commerce side of things that’s linked in with the bricks and mortar, our real stores.
With our new system Watashi +, an example of the way we link virtual to the real stores is that customers can upload their images and then get instructions or guidance from a beauty consultant about how to apply particular types of make-up and those types of tips. It’s a one-to-one thing so it’s not just about numbers or the specifications of the product. Where we look at adding value is having the customers link in to what they’ve experienced online in the virtual world, then adding to that experience by actually trying out the products in the real stores which leads to purchase.
Both Beauty & Co and Watashi + have developed well from the initial start and have had a good kick-off. As a company we’re looking to put a lot of effort into further developing those sites so they’ll become among the top rank site for women and will have large numbers of members.
From a marketing perspective, is online media and social media activity a priority for the brand?
Yes, social media services and online media are a growing presence – I think there have been reports Facebook has over 900 million users – and are very accessible and great communication tools and information dissemination sources. So yes, in that sense they are important in terms of marketing, sales and promotion.
In particular we have seen [social media] develop early on in America, so the subsidiaries that we have acquired – Bare Escentuals and NARS - have very developed know-how in that space and we want to learn from them best practice and incorporate that into the Shiseido Group.
Shisedo Australia launched its Facebook page in February this year and with 13,000 fans in three months has already exceeded its goal of 7,500 for the year. The brand is carrying out Facebook promotions to tie-in with the 140-year anniversary and sees Facebook as a way of keeping regular contact with its customers and to direct new customer in store.