The Glamour Erosion: A Shift in the Asian Beauty Market
The world of Asian beauty is experiencing a seismic shift as the once stalwart shares of Asia’s largest beauty groups are plummeting. Japan’s Shiseido recorded its most significant drop in almost four decades, while South Korea’s Amorepacific faced its worst day on the market in 14 years. These sharp declines serve as a cautionary tale for global peers, signaling a broader change in the beauty industry landscape.
- Shiseido’s Troubles:
- Shiseido’s unprecedented decline was triggered by a reported first-half operating loss of ¥2.7bn, a sharp contrast to the profit of ¥13.6bn the previous year.
- The company attributed this loss to weak demand from China, its critical market outside Japan, following the Fukushima nuclear power plant incident.
- Despite undertaking cost-cutting measures and employee retirements, the market remains skeptical of Shiseido’s recovery.
- Amorepacific’s Fall:
- Amorepacific’s shares plummeted by a quarter after reporting second-quarter earnings that missed expectations.
- The Chinese cosmetics market, now the world’s second-largest, has seen a shift in consumer behavior towards domestic brands for reasons beyond affordability.
- Premium skincare and makeup lines, previously profitable for both Shiseido and Amorepacific, are now facing challenges as consumers in Asia move away from upmarket preferences.
- Changing Trends in China:
- Chinese consumers are adopting patriotic shopping habits, gravitating towards domestic cosmetic brands for reasons beyond price.
- The rise in per capita disposable income in China has not translated into increased spending on foreign beauty products.
- This shift in consumer behavior has the potential to have long-lasting implications for the global beauty industry.
As the allure of premium beauty products wanes and consumer preferences in Asia undergo a transformation, global beauty companies, especially those with high-end offerings and exposure to China, may need to rethink their strategies to navigate this evolving landscape effectively.
For inquiries, contact june.yoon@ft.com.
In essence, the tides are turning in the Asian beauty market, urging industry players to adapt swiftly to the changing preferences of discerning consumers.
