Core Strategy - Kao Corporation plans to revamp its cosmetics business with a focus on six core brands: Sensai, Molton Brown, Kanebo, Sofina, Curel, and Kate [2][10] - The company aims for a net sales target of 400 billion yen (US$2.68 billion) and an operating margin of 15 percent by 2030 [2][11] Brand-Specific Plans - Curel is expected to see accelerated growth, with plans to increase its store presence in Europe by sixfold and generate 50 percent of total sales outside Japan by 2027 [3] - Sensai and Molton Brown will target the Asian luxury market, aiming for a 150 percent increase in Sensai sales and a doubling of Molton Brown sales in Asia by 2027 [4] - Kanebo and Kate will adapt their strategies to the unique characteristics of each Asian market, starting with a target of boosting sales by 150 percent in Thailand by 2027 [5] - Sofina and its sub-brands will be consolidated to enhance sales in Asia by 50 percent by 2027 [5] Profitability and Growth Initiatives - The revamp includes a broader focus on improving profitability and fostering long-term growth through core technologies, cost reductions, and the application of digital and AI technologies [6] - The restructuring process will be led by Tomoko Uchiyama, who emphasizes the company's adaptability to market dynamics [7][8]

Group 1 - Japanese cosmetics companies are experiencing collective anxiety in the Chinese market, with Shiseido's executives acknowledging a decline in brand equity [2] - The Japanese beauty industry has been a significant player in China for over 40 years, but recent years have seen challenges due to the rise of local brands and external pressures from Western competitors [2][3] - In the first half of 2025, major Japanese beauty companies reported declines in their Chinese operations, with Shiseido's sales dropping by 10%, Kosé's by 7.3%, and POLA's net profit plummeting by 38% [2][3] Group 2 - The performance of Japanese beauty companies reflects a broader restructuring of the beauty industry, highlighting the need for multinational companies to adapt to the changing market dynamics in China [3] - Despite global profit growth, the persistent weakness in the Chinese market is a common challenge for these companies, indicating a significant shift in the competitive landscape [3][16] Group 3 - Shiseido's overall sales in the first half of 2025 were 469.83 billion yen (approximately 22.86 billion RMB), a decrease of 7.6%, while core operating profit increased by 21.3% to 23.37 billion yen (approximately 1.14 billion RMB) [7][10] - The Chinese and travel retail segment for Shiseido saw sales of 173.94 billion yen (approximately 8.46 billion RMB), down 12.4%, but it contributed nearly 80% of the group's core profit [10] Group 4 - Kao Corporation reported a global sales increase of 2.7% to 809 billion yen (approximately 39.3 billion RMB) in the first half of 2025, with operating profit rising by 19.9% to 69.5 billion yen (approximately 3.3 billion RMB) [10][13] - Kosé's sales were 160.5 billion yen (approximately 7.8 billion RMB), a slight increase of 0.9%, but operating profit fell by 17.7% to 11.3 billion yen (approximately 0.55 billion RMB) [15] Group 5 - POLA ORBIS Group's total revenue was 832.53 billion yen (approximately 38.3 billion RMB), a slight decrease of 0.7%, with net profit dropping by 38.1% to 4.64 billion yen (approximately 0.23 billion RMB) [16] - The performance of these companies illustrates a clear divide between global profitability and challenges in the Chinese market, with POLA facing additional difficulties due to delayed strategic adjustments [16] Group 6 - Japanese beauty companies are optimistic about the long-term potential of the Chinese market and are accelerating transformations to navigate current challenges [17] - Strategies include focusing on high-end products, channel innovation, and localization to better respond to the evolving consumer landscape in China [17][19]