Impact of Economic Downturn on Beauty Industry
Discover how Shiseido’s profit plummeted 73% due to China’s sluggish cosmetics market. Learn about the challenges facing the beauty industry and Shiseido’s outlook for 2025.
Image Credit : Nikkei Asia (Photo by Tomoki Mera)
Shiseido’s Profit Plunges 73%: What’s Behind the Beauty Giant’s Sluggish Sales in China?
The global beauty industry is facing a significant challenge, and Japan’s Shiseido is no exception. The cosmetics giant recently reported a staggering 73% drop in full-year profit, primarily due to sluggish sales in China.
China’s Cosmetics Market: A Prolonged Downturn
China’s cosmetics market has been experiencing a prolonged downturn, with consumer spending on beauty products declining significantly. This trend is attributed to various factors, including:
- Economic uncertainty
- Rising household savings
- Worsening economic sentiment
As a result, international beauty companies like Shiseido are facing intense competition from domestic Chinese brands. Consumers are increasingly opting for local brands, which has further exacerbated the decline in sales for foreign companies.
Shiseido’s Performance: A Mixed Bag
Shiseido’s full-year operating profit fell to 7.58 billion yen ($49.9 million), down from 28.13 billion yen the previous year. However, the company’s net sales in Japan increased by 10%, driven by purchases from tourists.
Outlook for 2025
Shiseido forecasts a sales decline in China for 2025, citing continued economic uncertainty and intense competition from domestic brands. In contrast, the company expects sales in Japan to grow by 10%, driven by tourism and domestic demand.
Key Takeaways
- China’s Cosmetics Market: The market is experiencing a prolonged downturn, affecting international beauty companies.
- Shiseido’s Performance: The company’s profit plummeted 73% due to sluggish sales in China.
- Outlook for 2025: Shiseido forecasts a sales decline in China but expects growth in Japan.
Surangama, Staff Reporter
