Cosmetics firms fighting for foothold in China

Tomoki Matsubara / Yomiuri Shimbun Staff Writer

Major Japanese cosmetics companies have stepped up efforts to increase their presence in China, where foreign cosmetics firms, including L'Oreal of France, have been striving to gain a bigger share of the huge Chinese market.

With domestic sales of cosmetics leveling off, securing a large share of the Chinese cosmetics market, which could become as big as Japan's, is seen by cosmetics firms as indispensable for future expansion.

At a press conference held Thursday to announce its three-year business plan starting fiscal 2008, Shiseido Co. President Shinzo Maeda said China's cosmetics market has grown by 10 percent a year, but Shiseido is aiming for annual growth of 20 percent there.

Shiseido this month revamped its Aupres range, which features skin care products designed for Chinese consumers, for the first time in 14 years, and raised the prices of products in the range by 20 percent to 30 percent.

Aupres products, which are on sale at about 700 outlets of department stores across China, were approved by Beijing as Chinese athletes' official cosmetics at the 2004 Athens Olympics.

As Aupres has established itself as a recognized brand in China, Shiseido believes it can further increase its sales.

Shiseido, L'Oreal, and Procter and Gamble of the United States each has a large market share in China, but unlike Europe and the United States where perfume is popular, most Chinese women prefer skin care and makeup products, a trend also found in Japan, which benefits Shiseido.

Major foreign cosmetics firms began making advances into China between the late 1980s and the 1990s, but Shiseido started exporting its products to be sold at China's state-run department stores in 1981, becoming the first to find a foothold in the Chinese market.

With sales in China amounting to about 60 billion yen, the nation has become Shiseido's largest overseas market, surpassing the United States.

Sales of two other leading Japanese cosmetics firms--Kose Corp. and Kanebo Cosmetics Inc.--amounted to about 8 billion yen and less than 3 billion yen, respectively.

Kose will put on sale in June cosmetics made by the Rimmel brand that are favored by Chinese women, a British firm with which Kose has a license contract.