Shiseido adopts new cooperative strategy in China

Tan Weiyun
In the face of growing competition from local peers, the Japanese personal care brand is localizing and collaborating to meet Chinese customers.
Tan Weiyun

As China-grown cosmetic brands storm the local market with affordable prices and descent quality, Shiseido is taking a cooperative approach to meeting local customers.

The Japanese personal care leader opened its Beauty Innovation Hub in Shanghai at the beginning of the new year. 

As the first outside Japan, the hub is built as a community space where consumers, entrepreneurs, researchers and industry partners will connect to discover, collaborate, create and express the potential of true beauty.

“Shiseido is well-known for product innovations, but what we are seeing is how companies in China are innovating rapidly in their respective industries through disruptive business models. These companies embrace technologies to adapt to fast-changing consumer preferences and excel at delivering commercially viable solutions,” said Carol Zhou, Shiseido's senior vice president.

Shiseido adopts new cooperative strategy in China
Ti Gong

Shiseido has its first Beauty Innovation Hub outside Japan in the WeWork coworking space on Weihai Road.

“Shiseido Beauty Innovation Hub represents a new way of working to drive consumer-centric solutions that Chinese consumers will love. At this space, we want to be as close as possible to consumers, collaborate with Chinese startups and disrupters, and create innovation which will deliver true value,” she said.

Last year witnessed the rise of budget-friendly Chinese beauty brands such as Florasis, Perfect Diary, Judydoll and Popbee, which are emerging as major rivals to the international players who once dominated the market.

Euromonitor International estimates that the beauty and personal-care market in China will reach US$62 billion in 2020. 

According to research by the Hong Kong Trade Development Council, domestic brands now command 56 percent of the Chinese market, a sizable gain due to their expansion into second and third-tier cities.

Cooperation and localization, rather than head-on confrontation, is the strategy Shiseido takes. The Beauty Innovation Hub aims to work with local startups in the extended beauty space to experiment and create new businesses for Chinese consumers and globally. The hub serves as an open innovation platform for startups, opinion leaders, area experts, media and scientists.

“This is a bold move for us to work this way. It is a unique model and I think it’ll be reshaping the whole industry,” Zhou said.

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