Recently, Japanese cosmetics giant Shiseido Group announced that it has successfully completed the divestiture of its personal care business and transferred its entire stake in FineToday Holdings Co., Ltd. to CVC Capital Partners, and the transaction is expected to be officially completed on June 30.
FMCG has learned that since the launch of its strategic transformation in 2021, Shiseido has decided to focus on the high-end beauty market, and sold its business units, including a number of well-known personal care brands such as fino, KUYURA, SUPER MiLD, and TSUBAKI, to CVC at a price of 160 billion yen (about 9.8 billion yuan at the current exchange rate). To ensure a smooth transition, Shiseido and CVC jointly established FineToday Shiseido and gradually transitioned to the independent FineToday Group. The group has not only set up an R&D center in Japan, but also actively expanded into the international market, especially in China, where it has successfully established itself as the world's largest market through the establishment of Shanghai Fittings Cosmetics Management Co., Ltd.
FineToday Group's growth rate is impressive, not only the rapid expansion of the market territory, but also the news of its upcoming listing on the Tokyo Stock Exchange in Japan, with an estimated valuation of between US$2 billion and US$3 billion (about 14.5 billion yuan to 21.8 billion yuan), marking its maturity and growth as an independent entity.
This series of actions by the Shiseido Group is a key step in its long-term strategy "VISION 2020" and its follow-up "WIN 2023" and "SHIFT 2025 and Beyond", which aims to increase the profitability and brand value of the overall business through a premium brand priority strategy. Despite the strong performance of the personal care business during the pandemic, Shiseido remained on a premiumization path in response to market changes and higher profit margins.
With an ambitious goal in mind for 2030, Shiseido has set a dual-track development path that requires sales to grow to 2 trillion yen (about 90.4 billion yuan) and an operating profit margin of 18%. Despite the current challenges, with Shiseido's operating margin of just 4.1% in 2023, the Group firmly believes that it is possible to achieve a significant jump in CAGR through the transformation of premiumization, especially in the Chinese market, where premium brands have become a key engine of growth.
The Chinese market is crucial to Shiseido, which accounts for a quarter of its sales, and premium brands account for 70.5% of sales, compared to 31.6% in Japan. Therefore, Shiseido's "SHIFT 2025 and Beyond" strategy has made it clear that it will increase its investment in high-end brands such as Shiseido, CPB and The Ginza in the Chinese market, especially to accelerate the market penetration of The Ginza and further tap the huge potential of the high-end market through the strategy of online and offline integration.