BEAUTY REPORT: SHISEIDO TRAVEL RETAIL


Shiseido Travel Retail sets +22% CAGR target to 2020


Shiseido Travel Retail has targeted a 20% contribution towards group incremental revenue between 2017 and 2020. Luke Barras-Hill learns that overall growth of +78.8% in 2017, including +81.3% in Asia Pacific, represents a solid start in realising that target.


ASPAC +81.3% STR’s future growth trajectory hinges on four essential drivers: core brands,


insights-driven


marketing, sales productivity and operational excellence. Asia Pacific remains the bellwether


Above: Shiseido displays at Bangkok Airport.


A


n unwavering commitment to striking a top four position among DF&TR’s beauty


giants by 2020 means Shiseido Travel Retail (STR) is jostling to increase its sales at every opportunity. Net revenue from STR accounted


for 4.4% of the Shiseido Group’s total in 2017, but the division’s aspirations reach higher. To 2020, STR hopes to generate a CAGR of +22%, and 20% of the group’s incremental revenues over the period. This links intrinsically to its ongoing Vision 2020 strategy, with operational performance management (OPM) forecast to grow by 10% as part of the group’s next phase 2018-2020 acceleration plan. This will hope to spur operating profit upwards of the $740m netted in 2017. STR achieved ¥44.5bn


($404.6m) sales in fiscal 2017 – a huge improvement on the ¥24.8bn/$223.8m (excluding Japan and fragrance TR) in 2016 – and first quarter


First quarter sales for the three months ending 31 March 2018 hit ¥21.4bn (+41.9% YOY).


TRBusiness 44 TRBUSINESS


sales for the three months ending 31 March 2018 hit ¥21.4bn/$194.5m (+41.9% YOY). “2017 marked the culmination


of the first phase of Shiseido Travel Retail’s Vision 2020 plan, during which we focused on ‘tending our garden’ and are now reaping the benefits,” comments Elisabeth Jouguelet, Vice President Marketing and Innovation. “I believe that there were many


contributing factors to our success, such the embedding of new structures and ways of working across all our travel retail regions – both internally and with our external partners. “Our four core brands really


powered forward – Shiseido, Clé de Peau Beauté, NARS and Dolce&Gabbana. In addition, we added IPSA to our travel retail portfolio and opened the first Laura Mercier counter under STR management in Bangkok’s King Power Downtown Rangnam Complex. This performance has surpassed our expectations and set a solid foundation for us to further grow our business in the next phase from 2018 to 2020.”


of travel retail regional development and accounts for 68% of STR’s sales, with EMEA at 21% and the Americas at 11%, confirms Kenji Calméjane, General Manager Travel Retail Asia Pacific. Between January and September, STR Asia Pacific outperformed growth for the travel retail division, at +81.3% and +78.8%, respectively; the biggest region is also the fastest growing. “We’ve made a very strong start to


the year,” comments Calméjane. “We’ve continued our momentum


from 2017, where we were buoyed by the boom in J-Beauty, continued growth in Chinese travellers and the growth of cosmetics in general across Asia. “Asia Pacific has pioneered a


number of initiatives that we can now look back on as best practice. For example, our omni-channel approach with ‘The Beauty of Thailand’ for Shiseido; the animation of Clé de Peau Beauté in selective locations with DFS and Tasa Meng; our expansion of NARS counters in markets such as Thailand, Korea and Singapore; and starting the first steps of some of our rising star brands such as IPSA and Laura Mercier.”


Lip service pays Within cosmetics, the lip segment continues to thrive as the increasing diversity of products combined with quick-apply applications and marketable slogans satiate demand. “The lip segment has definitely helped to boost growth and it is


JUNE 2018


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