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Published on March 13, 2008

Premium Japanese cosmetic manufacturers Shiseido and DHC believe this year will be a better than last year, though they are still concerned about Thailand's political and economic environment.

They foresee the premium cosmetic market in Thailand growing by 5 per cent.

Chief officer of the international business division at Shiseido's Tokyo headquarters, Carsten Fischer, said yesterday the market still had good potential as women were far more educated about cosmetic use than before.

DHC (Thailand) president Tassanee Ratanaruangrai said the cosmetic market had an advantage over other businesses in that women still want to spend money on beauty.

DHC began penetrating the Thai market three years ago through its special distribution channel featuring express delivery service directly to its customers. The company has confidence that its sales will grow at the same 5 per cent rate as last year to Bt500 million. It also expects its members to increase to 75,000 from 70,000.

Meanwhile, Shiseido will achieve better growth after failing to reach its target last year due to the difficult political and economic situation. Fischer declined to reveal figures.

To achieve its financial and membership targets, DHC has allocated Bt200 million as a marketing budget. The company plans to increase customer relationship management (CRM) activities and to invest more to develop its IT system and personal and marketing activities, to arrange road shows, and to cooperate more with business alliances to offer discounts for DHC's members.

It will also expand its service channel by investing Bt30 million to establish its first shop called DHC Olive Beauty at the Siam Paragon shopping complex. The shop, featuring a modern Japanese-style atmosphere, will be its flagship store where customers - mainly working females aged 25-45 and modern housewives with high purchasing power - can meet DHC for beauty services and other activities. The shop's service areas will be allocated into two main parts: 60 per cent beauty spa and 40 per cent displays and counters.

Of DHC's total sales last year, its skincare products ranked first with a 70 per cent contribution, followed by health foods with 20 per cent and food supplements with 10 per cent. Its current 70,000 members purchase an average Bt3,500 per time.

Meanwhile, Shiseido will focus on its high performance product lines particularly skincare and fragrances. It will also focus on developing products that fit Thai consumers. Last year, the company established a research and development centre in Thailand as part of its plan to follow Shiseido's global policy in spreading research and development as well as marketing centres around the globe to gradually transform itself from a Japanese company into a global company.

Shiseido's global turnover last year was 725 billion yen (Bt222 billion), rising by 4.4 per cent. Overseas sales contributed 36.4 per cent of the total turnover. The company expects overseas sales to play a greater role in driving its global turnover as many overseas markets show a better growth rate than in its home country where growth is almost flat.

Nitida Asawanipont

The Nation