Investment Strategies
as a Skin Beauty Company
Under SHIFT 2025 and Beyond, Shiseido will provide a personalized experience for each of our consumers and become the world’s No.1 in skin beauty. To that end, we will aggressively invest in our brands, innovations, and people to enhance our value creation.
Enhancing Investment to Strengthen Our Brands
We will define the strategic positioning of each brand in our portfolio to enhance its value.
We have designated four global brands as top priorities—SHISEIDO, Clé de Peau Beauté, NARS, and Drunk Elephant—where we plan to invest heavily across all regions. In Asia, we will further develop brands such as ELIXIR and ANESSA. We will also add value to our fragrance business through our unique R&D. By focusing on the diverse consumer values and differences in regions, we will strengthen locally led value creation and product development at regional headquarters, just as BAUM has done in Japan and Ulé has in EMEA. Furthermore, we will expand the men’s makeup and skincare markets, which hold incredible growth potential.
To nurture and grow these brands, we will increase our marketing investments by more than 100 billion yen between 2023 and 2025.
In addition, we will explore various investment opportunities through M&A and corporate venture capitals to develop new business areas.
NARS, Drunk Elephant & Tory Burch
The Future of Skin Beauty
The pandemic forever changed the way consumers shop and what they purchase. They are now hyper-focused on wellness and the health of their skin through efficacious ingredients. As a result, complexion and skincare have blended into one and clean, sustainable products with skincare benefits are highly in demand. Accordingly, NARS quickly pivoted its strategy and capitalized on these trends to give consumers what they were asking for.
In 2022, NARS launched Light Reflecting Foundation. This unique foundation is a makeup-skincare hybrid that defends skin against environmental stressors and strengthens the skin’s natural barrier. In its first year of launch, Light Reflecting Foundation became No.1 launch in the prestige beauty category in the US market. As NARS moves forward, we will continue to leverage Shiseido’s skincare technology to develop best-in-class innovation that integrates skincare benefits.
At Drunk Elephant, we believe healthy skin equals happy skin, and all products are created using only biocompatible ingredients that benefit the skin. While more than 60% of Drunk Elephant’s business is done in the US, we opened 25 new markets in 2021 and 2022. In the upcoming years, we will continue to have a laser focus on facial skincare as a way to fuel brand awareness and build loyalty. At Drunk Elephant, we are also actively focused on sustainability and are launching a refill program to drive replenishment. We feel confident Drunk Elephant will become one of the top global brands in the future.
I am incredibly proud of what NARS and Drunk Elephant have achieved and optimistic about the future. These two brands are the future of Skin Beauty and will continue to play an integral role in helping Shiseido become the world’s No.1 skin beauty company.
April 2023
Strengthening Our Innovation and Supply Networks
Maximizing Shiseido’s R&D capabilities globally is essential to enhancing our brand equity. Our Global Innovation Center (GIC) in Japan will expand basic research while collaborating with our five regional innovation centers around the world. Under SHIFT 2025 and Beyond, we will continue investing around 3% of our net sales into R&D to further strengthen this global network.
To boost the competitive advantage of our brands, we will focus on refining the high quality of Japanese products and strengthening our supply network to increase productivity and improve cost efficiency. We will raise the utilization rate of the three domestic factories we’ve established since 2019 in Nasu, Osaka Ibaraki, and Fukuoka Kurume. In a manufacturing line in the Fukuoka Kurume Factory, the productivity has improved by 300% by utilizing cutting edge technology including IoT and robots. We will roll out these advanced technologies to other plants as well.
(Start of operations: Dec. 2019)
West Japan Distribution Center
(Dec. 2020)
(May 2022)
Investing in People
We will also expand our investment in people, the source of value creation, to enhance our brands and accelerate innovation.
PEOPLE FIRST is our philosophy and is based on the belief that investing in our talent increases corporate value. SHIFT 2025 and Beyond represents a shift from defense to offense, and under this strategy, we will increase employee engagement to further evolve our workforce into a globally competitive team.
We have always valued diversity, and by focusing on diversity and inclusion, and encouraging diverse work styles, Shiseido strives to be a company that can attract highly skilled talent from around the world.
For talent development, we will reskill our people in digital through avenues such as the SHISEIDO+ Digital Academy, where more than 8,000 employees worldwide have already received training, and the Shiseido Interactive Beauty Company Limited, where we bring IT specialists together for intensive training. Under our job-grade-based HR system, we will continue to support career development for every individual, offering a variety of training and study abroad programs and investing considerably into leadership training.
To accelerate these initiatives, we plan to open Shiseido Future University in the autumn of 2023, a facility for the professional development of Shiseido’s next leaders.
