Core Viewpoint - Kose Group is committed to the Chinese market, viewing it as a core part of its global strategy and a key driver for innovation and sustainable growth. The company has transitioned from a defensive to an offensive strategy in China, emphasizing its long-term development plans [2][5][17]. Group 1: Strategic Positioning - Kose Group's chairman, Shinohara Kazuhiko, emphasized that the channel optimization and brand restructuring starting in the second half of 2024 is not a retreat but a necessary evolution for long-term growth [5][17]. - The company aims to redefine high-end value and strengthen brand presence in the competitive Chinese market, particularly through its premium brands Decorte and Sekkisei [7][12]. Group 2: Market Performance and Challenges - The high-end cosmetics market in China is experiencing a compound annual growth rate decline of 3% from 2021 to 2024, with market size shrinking from 257.8 billion yuan to 236.4 billion yuan, indicating a loss of 21.4 billion yuan [10]. - Kose recognizes the need to adapt to changing consumer demands and has initiated a structural reform to enhance its competitive edge in the high-end segment [12][32]. Group 3: Product Strategy and Innovation - Kose is focusing on three high-end product lines to enhance brand loyalty and consumer desire, including the Decorte AQ series, which has seen significant online engagement and sales growth [15][21]. - The company plans to introduce new products targeting high-end segments, such as the LIPOSOME lip essence and a quantum-computed formula for a new skincare product, aiming to capture market attention [17][18]. Group 4: Marketing and Consumer Engagement - Kose is enhancing its marketing strategies by leveraging social media and e-commerce platforms to reach a broader audience, including younger consumers and male demographics [22][23]. - The company is also simplifying its product lines to better align with market demands while maintaining its classic offerings [24][32]. Group 5: Localization and Talent Development - Kose is committed to localizing its research and development efforts, having stationed researchers in China since 2004 to better understand consumer needs [38][40]. - The company emphasizes the importance of cultivating local talent to drive innovation and responsiveness in its operations, with plans for ongoing training and leadership development [44]. Group 6: Future Outlook - Kose is optimistic about the long-term growth potential of the Chinese beauty market, focusing on personalized and effective product offerings to meet evolving consumer expectations [48]. - The company's strategic transformation is seen as a comprehensive restructuring that integrates R&D, marketing, and organizational frameworks to foster sustainable innovation capabilities [48].