Sources of Value CreationMessages from Brand Heads

Growing into a ¥200 Billion Brand

Since its founding in Ginza, Tokyo, in 1872, Shiseido has created beauty standards for each generation through the fusion of art and science. SHISEIDO, a brand crowned with the Company name, is now offered in 85 countries and regions around the world.

From 2015, we rebranded and rejuvenated the brand, achieving an average yearly growth rate of 19%*¹ in sales that reached ¥200 billion in 2019.

Ultimune, a symbolic product of brand SHISEIDO that offers the unique value of “boosting your underlying beauty,” is supported by consumers across age, skin type, race, and gender; has received 179*² beauty awards worldwide; and is a key driver in the sustainable growth of brand SHISEIDO.

In 2020, we unveiled the campaign #ALIVEwithBeauty, with brand SHISEIDO drawing out your own inner and outer beauty to create the ultimate expression. Leveraging brand SHISEIDO’s status as a prestige brand representative of Japan, we will continue to create innovative products that deliver Japanese beauty to the world.

• Excluding the impact of the application of U.S. accounting standard ASC 606 in 2019
• As of February 2020, based on in-house research

Brand overview

Becoming a Japan-Based Global Luxury Brand

Shiseido launched the top-class brand Clé de Peau Beauté in 1982 under the name Clé de Peau. Since its creation, our mission has been to meet consumer demand for the highest quality at the highest standard, realized through the latest research results and commitment to accepting nothing but the best. For example, La Crème, a cream that embodies the Clé de Peau Beauté brand, established the luxury cream market faster than global competitors thanks to its exceptional quality.

In recent years, Clé de Peau Beauté has captured the No. 1 share in the Japanese market for prestige brands*¹ along with accelerated sales growth in overseas markets, achieving over ¥130 billion in sales in 2019 with CAGR up 24% between 2014 and 2019*².

Also in 2019, we commenced the Power of Radiance Program, a multi-year philanthropic endeavor unique to the Clé de Peau Beauté brand that aims to empower women around the world. Going forward, in addition to sales growth, we will enhance the social value of the brand, and continue to create value that secures Clé de Peau Beauté as a global luxury brand originating in Japan, beloved by consumers around the world.

• Data by Beauté Research
• Excluding the impact of the application of U.S. accounting standard ASC 606 in 2019

Brand overview

The Power of Radiance Program

Becoming a $1 Billion Brand in Retail

In 2019, NARS celebrated its 25th anniversary. Created by François Nars in 1994, NARS is a modern, authentic, and aspirational makeup artist brand that constantly challenges the status quo. NARS inspires self-expression and creativity and is known for being disruptive and witty. With iconic packaging, provocative product names and elevated levels of artistry, NARS appeals to diverse consumers around the globe.

In 2019, we hit a major milestone, delivering global retail sales of over $1 billion, and became a top 10 global makeup brand, based on in-house research. Net sales were up 14% compared with 2018, and up 24%* on a compound annual basis between 2014 and 2019, and we continued to improve profitability.

As we move into the future, we have set our sights on a new goal: global retail sales of $2 billion. NARS will continue to drive double-digit growth and has a clear road map. We remain focused on building our brand, creating an emotional connection with consumers, leveraging new technologies, delivering relevant innovation, distorting proven winners, employing localized strategies, and accelerating distribution in key markets.

Ultimately, we remain inspired by François Nars, who reminds us to “play and try to be a little more daring—break the rules.”

Excluding the impact of the application of U.S. accounting standard ASC 606 in 2019

Brand overview

Achieving Strong Double-Digit Growth in All Major Markets

Laura Mercier Cosmetics was founded in 1996 by world-renowned French makeup artist Laura Mercier, the pioneer of the “Flawless Face.” This global luxury line is known for its iconic products and effortless artistry techniques. By blending French je ne sais quoi with classic American ease, Laura Mercier inspires women to embrace their individual beauty. Acquired by Shiseido in 2016, Laura Mercier is distributed through specialty, beauty, and department stores across the globe.

The brand’s CAGR between 2017 and 2019 increased a remarkable 19%*¹, representing the significant impact of joining the Shiseido Group. In 2019, Laura Mercier showed growth in all key markets globally, opening over 200 new doors. The brand experienced strong double-digit performance in the Asia Pacific, Travel Retail, and EMEA businesses, even amid sluggish growth in the market. The brand also increased its market share in the U.S. and recorded double-digit growth in its e-commerce channel. Furthermore, the brand invested in accelerating brand awareness among the younger consumer segment via global influencer marketing initiatives. As a result, Laura Mercier improved nine rankings to become a top 10*² EMV (earned media value) brand by the end of 2019.

The brand will continue its shift toward younger, more diverse consumers across the globe and expand its brand value to more regions and more consumers in order to achieve $1 billion retail sales in the future.

• Excluding the impact of the application of U.S. accounting standard ASC 606 in 2019
• As reported by Tribe Dynamics

Brand overview

A Leading Clean, Natural Beauty Brand, Dedicated to the Power of Good

As creators of clean beauty, bareMinerals launched its ORIGINAL Loose Mineral Foundation with just five clean mineral ingredients in 1995. It transformed the lives of millions, giving them confidence through coverage that improves the condition of their skin. Through word of mouth and a genuine love for the brand, bareMinerals became the leading clean makeup brand.

Our globally relevant Power of Good mission is to support women to “Look Good” with our clean, natural, skin-improving products, “Feel Good” about themselves and their community, and “Do Good” for the planet and by empowering young women around the world.

As a brand with a strong conscience, 2019 was a turning point for bareMinerals. In April, we launched the Power of Good Fund by giving back 1% of profits from all direct-to-consumer sales in the U.S., and raised over $750,000 for women’s empowerment charities, supporting education for 2,500 adolescents, and provided financial independence for 340 female entrepreneurs. It was also a year in which we began our sustainability program with our exclusive recycling program in the U.S. and recycled over 10,000 kilograms of plastic through drop-off locations in boutiques.

Along with the Power of Good brand reboot, we tightened distribution and increased digital penetration to an all-time high of 21%. This resulted in the reversal of a three-year declining retail trend accompanied by growth of key strategic partners in the U.S., EMEA, and Japan.

Our vision for the future is to continue to lead with a conscience. We will accomplish this by delivering clean innovation with added focus on skincare, accelerating growth in our core markets, expanding our global footprint, driving sustainability, and empowering young women through the Power of Good Fund.

Brand overview

What Is “Clean”?

Becoming a Beauty Brand with Net Sales of €1 Billion

Created in 1985, Dolce&Gabbana has a unique identity inspired by the love of Italian heritage, which the two Designers have been constantly revisiting. It is the balance between the south and the north of Italy, authentic and modern, innovative and traditional, royal and real. Dolce&Gabbana makes you the king and queen of your everyday life.

Dolce&Gabbana is a global beauty brand, with a significant brand recognition and track record in all regions. After being acquired by Shiseido, Dolce&Gabbana has been achieving dynamic growth supported by its DNA as a powerful fashion brand. This growth has been driven by efficient brand investments, distribution quality improvement, and the rejuvenation of our fragrance pillars such as “Light Blue” and “The One.”

In 2019, we took the brand to the next level with the launch of “K by Dolce&Gabbana,” the most successful masculine fragrance launch of the year; the relaunch of Dolce&Gabbana Makeup; and the introduction of our unique and new store design concept. We also shifted the perception of retailers and consumers by recruiting new targets, building loyalty, and fostering love for the brand among existing consumers. Through the success of these efforts, we achieved net sales growth with a CAGR of 12%* between 2017 and 2019. Our ambition is to become the next €1 billion beauty brand, maintaining a high growth pace globally.

We will continue to elevate the brand through the consolidation of our fragrance portfolio. At the same time, we will roll out makeup and launch a new skincare line. By doing so, we will expand the brand on a global basis while strengthening our presence in Asian markets.

We will also increase brand visibility through sustained investments in media, an enhanced online presence, and the improvement of our brand position in stores, establishing high standards of excellence in execution.

Excluding the impact of the application of U.S. accounting standard ASC 606 in 2019

Brand overview

Representing Asia as a Japanese Brand

ELIXIR is an anti-aging skincare brand created in 1983. Since rebranding in 2016, sales have doubled to ¥80 billion, making it a top-three brand of the Shiseido Group.

As ELIXIR continuously realizes sales growth in Japan, in 2018 and 2019 it also attained the No. 1* share in Japanese skincare markets (excluding inbound) across all sales channels. In the Chinese market, ELIXIR saw 50% growth for three consecutive years from 2017 to 2019. Centered on our unique brand value of TSUYADAMA—the inner glow revealed on cheeks only when skin is firm and transparent—we have developed a wide range of ELIXIR products that can easily achieve differentiation and cater to the needs of consumers. In addition, we are actively engaged in localization activities that focus on the different consumer needs and customs of each market.

Going forward, we will continue to achieve growth in existing markets and strive to cultivate new ones so that even greater numbers of people can experience the luminosity of skin supported by TSUYADAMA, and in so doing make ELIXIR a Japan-based brand that represents all of Asia.

INTAGE SLI Japanese Skincare Market; from January 1, 2018 to December 31, 2018, and from January 1, 2019 to December 31, 2019 (share by revenue)

Brand overview

Expanding Japan’s No. 1 Sun Care Brand Worldwide

ANESSA has been the best-selling sunscreen brand in Japan for 19 consecutive years*. It is also beloved by many consumers in Asia, including those in China. One of the reasons behind this success is the tremendous trust in its product functions, such as its strong UV protection. We have led the market with the ANESSA brand, working constantly to incorporate the latest protection technologies created through a century of Shiseido’s UV research.

The objectives of this brand going forward are to realize ongoing growth in Asia and expand into new markets. In achieving these objectives, we will spur new innovations and change the relationship between people and the sun to a positive one, as we strive to create healthy and beautiful lifestyles.

INTAGE SRI Sunscreen Market; from November 2000 to October 2019. ANESSA brand (share by revenue)

Brand overview