The U.K. division of Shiseido has grand, sweeping plans to double its U.K. sales and leapfrog into the region’s top five largest beauty companies by 2025.
That ambition is not far-flung. Shiseido’s U.K. business’s retail sales grew nearly 21% in 2023, with skin-care sales growing by 55%, makeup sales by more than 10% and fragrance sales seeing an 11% boost, according to Charles de Montalivet, Shiseido Group’s U.K. managing director. Shiseido sells 11 brands in the U.K., led by Nars, Drunk Elephant and the Shiseido brand.
According to Shiseido’s year-end earnings results published in February, Drunk Elephant saw a 77% year-over-year increase in its 2023 global sales. Nars also a 14% year-over-year global sales growth, while Clé de Peau saw a 2% increase. Across the Europe, Middle East and Africa segments, Shiseido is projecting 2024 sales for its skin-care, makeup and fragrance divisions to see a 13% growth on a like-for-like basis, with Drunk Elephant and fragrance expected to outperform the industry.
According to de Montalivet, the U.K. is the fourth-largest beauty market in the world and is currently underpenetrated by the Shiseido Group. Currently, Shiseido is the No. 8 largest beauty conglomerate in the U.K., behind other names like L’Oréal Group and Puig, he said, citing Circana data. The combo of high growth and underpenetration is a recipe for substantial growth, poising Shiseido to become the No. 5 largest beauty conglomerate in the U.K.
“The U.K. is absolutely a strategic market for Shiseido Group,” said de Montalivet. The U.K. is a trendsetter market where there are a lot of new brands and new concepts. It’s a place where you want to be an observer.”
Shiseido has four key growth pillars for the market. The first is to expand physical distribution for its Nars, Drunk Elephant and Shiseido brands. Brick-and-mortar sales in the U.K. for Shiseido Group brands are expected to grow by 37% in 2024. De Montalivet declined to share the names of new or expanding retail partnerships but said Shiseido will open a fifth freestanding Nars store in the market. Notably, Sephora re-entered the U.K. market after 18 years in March 2023.
Shiseido’s second priority is to boost local sales of its five fragrance brands, including Narciso Rodriguez. Today, fragrance represents less than 20% of the Shiseido Group’s sales in the U.K. To grow fragrance sales, the brand will use new marketing initiatives focused on entertaining and immersing consumers, plus innovative formulations that may serve as functional fragrances, according to the company.
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The third priority for growth is online innovation — e-commerce represents about half of Shiseido Group sales in the U.K. market. To grow e-commerce, Shiseido Group will introduce new online services for its brands, like virtual makeup try-ons for Nars and skin analysis for Shiseido. It will also improve the user experience for those working with virtual consultants. In addition, Shiseido is creating a new loyalty program with different tiers based on annual purchases — it will debut in late 2024. Later in 2024, Nars will test the U.K. TikTok Shop, said de Montalivet.
Finally, the fourth pillar of growth will center on nurturing Shisido’s newer brands, like French beauty brand Ulé and microbiome skin-care brand Gallinee. The focus will be growing brand awareness and getting the products into customers’ hands through sampling at retail partners via gifts with purchase, according to Geraldine Jacquinot, U.K. marketing director for skin care at Shiseido. In February, Ulé introduced digital product passports to its Vitamin C serum. The DPPs detail everything from the product’s ingredient composition to the processes behind its manufacturing processes. According to Glossy’s previous reporting, the move was intended to drive more informed purchasing decisions and encourage the adoption of eco-friendly practices.
“The U.K. consumer is really at the forefront of trends,” said Jacquinot. “The U.K. consumer is quick to pick up on any new trends, and they are a savvy consumer of ingredients and skin [knowledge].”
