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SHISEIDO: Cosmetics

Outline

Japan is one of the world’s top consumers of cosmetic products. There are more than 4,000 domestic cosmetic companies and firms in Japan, and on top of that, Japan is one of the largest importers of cosmetics in terms of value. Shiseido is a Japanese cosmetic company that has continued to maintain the largest share in such a competitive Japanese domestic market, as wells as the fifth largest in the world market.

Japanese skincare products are characterized by their heavy focus on enhancing and retaining skin moisture. Common features include prevention of water evaporation from the skin, penetration of moisture deep into the skin, and moisture retention within the inner layers of the skin. Moreover, they are typically designed to feel refreshing and help prevent makeup from smearing, even in wet weather or the humid summers of Japan. Needless to say, they also address various skin concerns common to women everywhere, such as acne, sunburn, discoloration, freckles, and skin aging. In addition to the functionality of the product, Japanese consumers are also keen on how the product feels and applies onto the skin, its ease of use, package design, and safety. Therefore, Japanese cosmetic products that have gained the approval of domestic consumers are also highly sought after in the world market; travelers to Japan often come with a shopping list of Japanese cosmetic products to bring back to their friends and family.

Shiseido has dominated the extremely competitive Japanese cosmetics market for more than 140 years—a testament to the company’s excellence.


Shiseido’s commitment to quality and functionality

Shiseido was founded in 1872 as a dispensing pharmacy in Ginza, Tokyo by the pharmacist Arinobu Fukuhara. In 1897, Shiseido debuted its first cosmetic product – a skin toner named Eaudermin. Its formula was based on the research of Nagayoshi Nagai, a professor of pharmaceutical sciences who studied chemistry and pharmaceutical sciences at the Free University of Berlin. For over a century since then, Shiseido has continued to develop and produce high-quality and functional cosmetics based on the latest advancements in dermatology and chemical manufacturing technology.

In 1916, Shiseido made an unprecedented move to establish its own research facility, and began performing scientific research, research administration, and quality control. This research facility was expanded to form the Shiseido Research & Development Lab in 1939 and later the Shiseido Research Center in 2000, which is still operational today.  The research conducted at this facility has broadened the company’s approach in product manufacturing and marketing, including analysis of product safety and effectiveness, technology for compound analysis, quality of packaging materials, physical chemistry pertaining to cosmetic formulae, as well as psychological issues of skin care and makeup use. Currently, the center is responsible for all phases of research including fundamental studies, applied sciences, and the industrialization and commercialization of Shiseido’s products.

It is also noteworthy that in 1989, Shiseido established the Cutaneous Biology Research Center (CBRC) with Massachusetts General Hospital, a teaching hospital of Harvard Medical School. To date, the hair and skin biology research at CBRC has yielded significant results, many of which have been applied to Shiseido’s product development.

Shiseido’s strength in research has garnered international recognition, as evidenced by the awards the company has won during the International Federation of Societies of Cosmetic Chemists (IFSCC) Congress on several occasions. The IFSCC Congress is an annual conference that gathers researchers in the field of cosmetic sciences from around the world. After the 28th IFSCC Congress in 2015, Shiseido has won as many as 15 Congress awards, the highest number ever won by any cosmetic company or research facility. 


Shiseido spreads the modern culture of makeup

Shiseido recognizes not only the importance of establishing its brand, but also the need to secure an effective distribution channel. Between the 1910’s and 1920’s, cosmetic products were largely sold at retail outlets through wholesale stores. This distribution system led to fierce price competition, which made sales and product distribution difficult and less profitable.

To overcome this challenge, Shiseido launched the unique Cosmetic Chain Store system in 1923. Under this system, only the contracted retail stores were allowed to sell Shiseido’s products at set prices. Shiseido also set up affiliated marketing and sales companies to prevent unnecessary competition among various retailers and agencies that were authorized to distribute its products.
      
In 1934, Shiseido debuted its first promotional campaign team. Named Miss Shiseido, the team consisted of women who underwent extensive training in the theories and techniques of skin care and makeup, as well as the essentials of class and style such as the knowledge of social etiquette and fine arts. They then toured the country to introduce the latest cosmetic techniques and to provide beauty counseling to their customers. The aim of the Miss Shiseido team was to expand Shiseido’s customer base by introducing Japanese women to the latest trends in the culture of makeup. In addition to the Miss Shiseido team, Shiseido also created the sales girl position in 1938. The sales girls were specially trained to promote Shiseido’s products at the retail stores.
 
The nationwide, joint effort of the Miss Shiseido team and the sales girls successfully promoted the modern makeup culture, which consisted of novel, Western-scented cosmetic products that were designed based on scientific research. The success of these women remains one of the most important milestones in the history of Japanese cosmetics.       

In essence, during its infancy and its growth phase, Shiseido employed advanced and innovative strategies that were ahead of its time, which included the in-house development of high-quality products, market creation and expansion, and steps to secure a unique distribution channel for its products. Shiseido’s success in these strategies has made it the largest leading cosmetics company in Japan. These strategies were also employed when Shiseido entered the global market. In addition to the high product quality, the highly attentive customer service and consultation even at retail outlets overseas have led to the increase in international sales.


Shiseido as an international brand

In modern times where products from well-known cosmetic brands are available around the world, cosmetic manufacturers must compete in the global market to maintain steady growth, if only to survive in the domestic market.

Shiseido’s entry into the international market began earnestly in 1957 with the manufacture and sales of its products in Taiwan. Since then, Shiseido has continued to establish retail outlets, local subsidiaries, research facilities, and manufacturing hubs outside Japan. In 2014, Shiseido’s sales overseas increased to 53% of its total sales. As of April 2016, Shiseido’s products are sold in around 120 countries.
The international growth of Shiseido shows that its strengths in research and development, product quality, and customer service, which have been nurtured in Japan for over 140 years, are highly valued around the world. Shiseido’s sales are growing especially among women in the humid regions of Asia, whose skin is similar to that of Japanese women, and whose purchasing power has increased due to the regions’ recent rapid economic growth.
 
As Shiseido continues to play to its strengths, it is sure to become a beacon in the world market of cosmetics, setting the course of evolution of the culture of beauty around the world.


28 November, 2016

About the author
Hiromi Jitsukata is a reporter for Japanest NIPPON
http://www.shiseido.com/Site-Selector/site-selector,default,pg.html?reset=true
(SHISEIDO world wide)
Major Brands
SHISEIDO
Global brand consisting of several product lines, including skin care, makeup, and hair care. It is deployed in approximately 80 countries and regions including Japan.
clé de peau BEAUTÉ
Highest-end mainstay brand
ELIXIR
Mainstay brand (mid-priced anti-aging line)
BENEFIQUE
Mainstay brand
MAQUILLAGE
Mainstay brand (make-up line)
TSUBAKI
Mainstay brand (hair care line)
AQUA LABEL
Mainstay brand (low-priced line)
SENKA
Low-priced line
SHISEIDO MEN
Male-oriented cosmetics
UNO
Male-oriented cosmetics and hair care line
ANESSA
Sunscreen brand
Deployed region: China
SHISEIDO
clé de peau BEAUTÉ
AUPRES
urara
Za
PURE&MILD
SENKA
TSUBAKI
ANESSA
Deployed region: Other Asian regions (Taiwan, Thailand, Vietnam and others)
SHISEIDO
clé de peau BEAUTÉ
BENEFIQUE
ELIXIR
Za
SENKA
TSUBAKI
ANESSA
Deployed region: United States
SHISEIDO
clé de peau BEAUTÉ
BENEFIQUE
Europe

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