Shiseido, the renowned Japanese cosmetics company, faced a significant setback in 2020 with a substantial drop in sales, resulting in a loss for the company. The impact of the Covid-19 pandemic hit particularly hard in Shiseido’s home market of Japan, where sales plummeted by 29.7% to 303.0 billion yen. Faced with the slow recovery from the pandemic’s effects in Japan, Shiseido responded by introducing new products tailored to meet the evolving needs of consumers. These innovative offerings included the mask-proof BB cream called MAQuillAGE, as well as medicated hand sanitizer and hand cream.

Sales in the Americas region also experienced a notable decline, with annual sales dropping 25.7% to 91.4 billion yen. The decrease was primarily attributed to lockdown measures and stay-at-home orders, coupled with an increase in retailers filing for bankruptcy. However, the region did witness growth in e-commerce, primarily driven by the success of the prestigious skincare brand Drunk Elephant, which Shiseido acquired the previous year.

In the Europe, Middle East, and Africa (EMEA) region, sales totaled 94.3 billion yen, marking a 20.4% decrease. The Asia Pacific region also saw a decline in sales, reaching 59.2 billion yen, which represented a 15.3% decrease compared to the previous year. However, China stood as the only market where Shiseido witnessed growth, with sales increasing by 9.0% to 235.8 billion yen. The recovery in the Chinese market commenced in late March, following a challenging start to the year due to the pandemic. Shiseido’s remarkable performance on China’s Singles’ Day also contributed to its growth in the market.

For the entire year, Shiseido reported a substantial net loss of 11.7 billion yen, a significant decrease from the net income of 73.6 billion yen in the previous year. Nonetheless, in the fourth quarter, the company’s net sales only fell by 6.2% compared to the same period in the previous year, amounting to 267.2 billion yen. Furthermore, net profit for the period increased to 2.0 billion yen, up from 1.1 billion yen in the previous year’s corresponding period.

Looking ahead, Shiseido expects to bounce back and achieve profitability in fiscal year 2021. The company predicts annual net sales of 1.1 trillion yen, indicating a 19% increase compared to 2020. Additionally, net income is projected to rise by 23.2% to 11.5 billion yen.

Apart from these financial results, Shiseido confirmed in January that it was engaging in talks with investment fund CVC to sell its personal care business, which primarily comprises shampoo, shower gel, and skincare brands distributed in Asia. This deal, estimated to be valued between 150 and 200 billion yen, aligns with Shiseido’s broader strategy to refocus on high-end cosmetics and aims to establish the company as the global leader in this segment by 2030.

Useful links:
1. Shiseido 2020 Fourth Quarter Results
2. Shiseido reports annual loss as pandemic keeps shoppers at home