TOKYO — Shiseido Co. Ltd.’s German subsidiary, Shiseido Deutschland GmbH, began selling Shiseido brand cosmetics in Slovakia last Friday.
Slovakia will be the sixth Eastern European country in which Shiseido brand products are sold, following the Czech Republic in March 1997, Hungary in September 1997, Croatia in October 1997, Poland in November 1998 and Russia in March 1999.
According to the Japanese beauty giant, the scale of the Slovakian market for prestigious cosmetics, primarily overseas high-end brands, is estimated to be approximately $10 million annually on a wholesale base. Dollar figures are translated from local currencies using current exchange rates.
“The demand for high-quality products has risen dramatically in the country as information on fashion became more readily available, particularly information from sources in the neighboring countries such as Poland, the Czech Republic, Austria and Hungary,” said the firm in a statement. “Shiseido decided to begin sales operations as the Slovakian cosmetics market is expected to expand steadily with industrial development there,” it added.
The decision to have Shiseido Deutschland handle sales in Slovakia was based on Slovakia’s deep economic ties with Germany, its leading trading partner.
Shiseido Deutschland generated $74.5 million dollars for fiscal 1999 through about 1,600 shops in Germany, Belgium, Luxembourg, Austria, Czech Republic and Hungary.
Shiseido Deutschland will handle sales in Slovakia through Midio, a local retailer which already sells Shiseido brand products in the Czech Republic. The Midio group has approximately 100 outlets, both retail and wholesale, throughout Eastern Europe, including Hungary, the Czech Republic, Slovakia, Bulgaria and the Ukraine.
In the first year, retailing of Shiseido products will take place in three stores in Bratislava, the capital city. Skin care, makeup and fragrance products will be introduced, including Shiseido The Skincare, Shiseido The Makeup and Shiseido Zen.
“Through our marketing efforts in Slovakia we will extend our image as a prestige cosmetics brand. These efforts will include providing superior products and offering advanced counseling services,” said the firm.
Shiseido is gaining momentum in overseas business expansion. As reported, Shiseido will launch sales of cosmetics in India in February. By 2003, the project will generate annual sales of just over $50,000 on a wholesale basis through department stores in major cities such as Mumbai and New Delhi.
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Shiseido first launched overseas sales in Taiwan in 1957. Today, excluding Slovakia, Shiseido products are sold in 61 countries, including 29 European countries, where sales began in Italy in 1963.
“Potential of the overseas market is increasing while the domestic market as a whole has been ripening in the change of the nation’s distribution-channel structure. A double-digit increase in the Asian beauty market and a stable increase of about 5 percent in Europe are seen for these several years,” said Akira Gemma, president of Shiseido.
Shiseido plans to broaden the scope of the operations, targeting the share of overseas sales in consolidated net sales of 25 percent or more in fiscal 2003. For the first half of the fiscal year ended Sep. 30, sales from overseas made up 17.1 percent. For the period of the previous year it was 16 percent.
“To achieve this expansion, we are strongly pursuing our “Global Multibrand Strategy,” in which we promote multiple brands — centering on the prestigious Shiseido brand — through various channels to best reflect people’s diverse values and needs,” said Shiseido.
“Now is the time for preparation to pursue our global multibrand strategy,” said Gemma of Shiseido.