As Shiseido Group moves forward with the next phase of its Vision 2020 corporate transformation, the cosmetics giant has strengthened its commitment to the travel retail channel with the opening of a new learning and innovation office hub in Singapore.
The new HQ is will be Shiseido Travel Retail’s centre of value creation and facilitate the group’s flexible and agile decision making across the channel, housing Shiseido Travel Retail, the regional headquarters of Shiseido Asia Pacific and the affiliate office of Shiseido Singapore.
Indeed, Asia remains the growth engine for perfumes & cosmetics in travel retail, but the region’s influence and reach is spreading worldwide.
In an interview with DFNI Editor Kapila Ireland, Shiseido Travel Retail Americas & Local Markets LATAM General Manager Vincent Baland discusses the Group’s activities and performance in the Americas and how Asian travellers are driving growth, even in this region.
DFNI: How has Shiseido performed in travel retail in the Americas?
Vincent Baland: Last year (2017), the perfumes and cosmetics (P&C) category grew more than 5% within travel retail in the Americas (Generation Research). This was driven by excellent performance in skincare, which grew around 12%, and make-up, which grew 9%, while fragrances was also up 2%.
Against this backdrop, Shiseido Group grew more than 80% and strongly increased its market share. The group has moved up two places from eighth to sixth in global P&C rankings. Our ambition is to break into the top four. We are now very close to achieving a 6% market share [5.8%] for P&C in travel retail in the Americas.
Which brands helped generate such phenomenal growth?
Skincare was the main driver of growth in P&C last year for us with Clé de Peau Beauté being one of our fastest growing brands – mainly in North America in the Asian doors of Vancouver, Toronto, Los Angeles, and even JFK in New York.
The game changer for us was Dolce&Gabbana which we grew strongly. The brand is ranked among the Top 8 in airports in the Americas, which is a strategic channel for us.
Having brands performing so well on both the fragrance and cosmetics sides was a key factor in Shiseido Travel Retail growing above the market last year. Clé de Peau Beauté, Shiseido and Dolce&Gabbana are the three brands that have helped us gain market share last year.
Does the fragrances category continue to dominate in the Americas?
The Americas region remains very fragrance-oriented. Fragrance still accounts for around 65% of the market, while skincare accounts for 23% and make-up 12%. That’s why the excellent growth of Dolce&Gabbana has been so key for our performance.
To what extent is growth in skincare being driven by Chinese and Asian consumers?
These consumers are very important, particularly in North America, but they are not the only reason we are growing so fast in the skincare category in the Americas. The Shiseido brand is actually very strong in Brazil. In fact, we are in the Top 4 cosmetics brand in both the local market and travel retail.
You seem to have quite a legacy in Brazil with Shiseido?
Yes, we’ve been in this strong position for quite some time now. Brazil is the only market in Latin America where we do have a subsidiary. This allows us to source critical data and knowledge about Brazilian consumers.
What activities does Shiseido Travel Retail Americas have lined up this year?
We have a lot of things happening this year both in fragrance and cosmetics. With Dolce&Gabbana, we have a major launch in the fragrance side, especially with a new masculine line.
Make-up is still growing faster than fragrances, and it’s very important for us to be strong in this category.
In that context, we are looking to launch NARS – which is already a phenomenal success in the US, Asia and Europe – in selected North American doors, with flagship positions and eye-catching visuals. The brand will launch in Los Angeles and Hawaii with DFS. In addition, we will also introduce Laura Mercier in these same locations.
The third axis of our development in 2019 is Clé de Peau Beauté. We are looking at selectively expanding the distribution to key airports such as San Francisco and JFK.
And in terms of fragrances?
In addition to our main launch with Dolce&Gabbana, we will be launching new lines for Issey Miyake and Narciso Rodriguez.
For fragrances, Brazilians are the strongest market for us in the Americas, followed by Argentineans.
Where do you see the biggest opportunities in Latin America?
We’ll be looking at growing our market share and ranking in the region, and we have many opportunities and new launches to help us achieve this. Overall, the biggest opportunity for growth undoubtedly comes from Asian travellers, especially in North America. In the US and Canada, these consumers are really driving our growth in locations like JFK, and the West Coast.
Finally, what does a great trinity partnership look like to you?
There is a lot said on this topic and everyone has their own view of how the trinity should work. For me, it is important that the three entities offer value to the traveller. And there must, of course, be a fair balance between the airports, operators and brands.