Group 1 - Major Japanese cosmetics companies are facing significant challenges, with varying performance across different brands and markets [2][7][30] - Kao Corporation reported a remarkable increase in operating profit by nearly 108%, while other companies like Kose and I-ne experienced declines of 17.7% and 17.0% respectively [2][7] - Several brands under major Japanese cosmetics companies are struggling, with notable declines such as a 57% drop for the brand "Zui Xiang" and decreases for brands like Anessa, Shiseido, Decorte, and POLA [2][10] Group 2 - The Japanese cosmetics market is facing challenges, with a 3.4% decline in the overall market and specific brands like Kose's Sekkisei down by 0.5% [2][30] - The performance in the Chinese market is dragging down overall sales, with many companies planning to withdraw, liquidate, or close stores by 2025 [2][28] - Kao is the only company among the five major Japanese cosmetics groups to show growth across all markets, with increases of 2.4% in the Americas, 3.0% in Europe, and 2.3% overseas [2][30] Group 3 - Shiseido's operating profit turned positive, but net sales showed only a slight increase of 0.82%, indicating ongoing challenges [9][30] - Kose's net sales increased by 0.9%, but its operating profit fell by 17.7%, highlighting the difficulties faced by the company [9][30] - POLA ORBIS reported a decline in net sales by 1.4%, primarily due to reduced sales from its core POLA brand [21][23] Group 4 - I-ne's skincare segment saw a significant increase of 432%, while its hair care segment declined by 10.8% [27][28] - Kao's beauty-related sales for the first half of 2025 reached 211.5 billion yen (approximately 10.32 billion RMB) and 118.5 billion yen (approximately 5.78 billion RMB) for cosmetics, with both segments showing profit growth [13][15] - Kose's high-end brand sales showed mixed results, with Sekkisei growing by 11.4% while other core brands like Decorte faced declines [16][18] Group 5 - The overall performance of Japanese cosmetics companies indicates a need for strategic adjustments, especially in light of economic downturns and increased competition in the Chinese market [37][40] - Companies are exploring growth opportunities in Southeast Asia, but face challenges from numerous competitors in these emerging markets [47][28] - The Japanese domestic market also presents challenges, with brands like Zui Xiang ceasing operations and Kose's Sekkisei facing a slight decline [42][45]

Core Viewpoint - Japanese cosmetics companies are facing significant challenges in the Chinese market, with declining sales and profits, prompting a need for strategic transformation to regain market share and adapt to local consumer demands [2][3][14]. Group 1: Market Performance - Shiseido's sales in China fell by 10% in the first half of 2025, while Kose's business declined by 7.3%, and POLA's net profit dropped by 38% due to market weakness [3][10][13]. - The overall sales of Japanese cosmetics in China have been adversely affected by the rise of local brands and external factors such as the nuclear wastewater incident [3][4]. - In the first half of 2025, Shiseido's global sales were 469.83 billion yen (approximately 22.86 billion RMB), down 7.6% year-on-year, but core operating profit increased by 21.3% to 23.37 billion yen (approximately 1.14 billion RMB) [7][8]. Group 2: Strategic Adjustments - Japanese companies are focusing on high-end markets and localizing their operations to better meet consumer needs in China [16][22]. - Shiseido plans to integrate its China and travel retail operations into an independent profit center to enhance brand synergy and respond to the trend of high-end market penetration [16][32]. - Kose is implementing a strategy of channel optimization and brand restructuring, emphasizing high-end and mass-market segments while enhancing local R&D and marketing efforts [24][31]. Group 3: Future Outlook - Despite current challenges, Japanese companies remain optimistic about the long-term growth potential in the Chinese market and are accelerating their transformation efforts [16][32]. - The focus on high-quality growth rather than short-term sales boosts is evident in Shiseido's strategy, which includes significant investments in core brands and new product launches [18][32]. - The ability to adapt to local consumer preferences and integrate local insights into product development will be crucial for Japanese brands to maintain competitiveness in the evolving Chinese beauty market [27][32].