ProjectShiseidoProjectShiseidoDraftReportDraftReportSeptember,2001September,2001ChinaMarketResearchChinaMarketResearch2I:ExecutiveSummaryPage3II:TargetOverviewPage5III:MarketandProductsPage21IV:DistributionChannelPage29V:SWOTAnalysisandOurCommentsPage60VI:FinancialAnalysisPage64VII:AppendixPage67TableofContent3I:ExecutiveSummaryII:TargetOverviewIII:MarketandProductsIV:DistributionChannelV:SWOTAnalysisandOurCommentsVI:FinancialAnalysisVII:Appendix4ExecutiveSummary•ShiseidoGroupenteredChina’scosmeticsmarketin1981.ItsetuptheShiseidoLiyuanandZotosplantsstartedmakingAupresandZain1992and1998respectively.•ShiseidoGrouphasmaintainedfastsalesrevenuegrowthoverthepast3years.AupresandZabrandsbothhaveseenrapidincreaseinsaleswhileShiseidobrand’sgrowthrateseemssteady.•ShiseidoGrouphascreatedaalmostcomplete“salesbycounters”distributionsystemwithoutusinganydistributors.Ithasopenedover400countersinmorethan70Chinesecities.Inallthecounters,itsproductpriceisstrictlyconsistent.Inaddition,theGroup’slogisticsandinventorycontrolsystemseemtobeundereffectiveandefficientmanagement.•BeautyAdvisorsofShiseidoGroupareemployeesoftheGroupandtheirfixedsalaryishigherthanallnon-ShiseidoBA’s.Forthemostpart,ShiseidoGroup’sBeautyAdvisorsaremoresatisfiedwiththeircompensationpackagethanthe“promotionpercentage”.•ShiseidoLiyuanhasperformedbetterfinanciallythantheindustryaverageandZotos’,butZotosstartedproductiononlyin1999.5I:ExecutiveSummaryII:TargetOverviewIII:MarketandProductsIV:DistributionChannelV:SWOTAnalysisandOurCommentsVI:FinancialAnalysisVII:Appendix62000ShiseidoLiyuanreceivedacertificationfromChinaCenterforEnvironmentManagementSystem.ZotosstarteddistributingproductsinmajorcitiesinChina.2001Shiseidoestablisheditsfirstflagshipstore,SalondesCosmétiques,inBeijing.Shiseidoplanstolaunchmen’scosmeticsinChinainOctober.YearMajorBusinessEventsPassedISO9002certification.ShiseidoLiyuancompleteditssecond-phaseexpansionoftheplant.Shiseidoconductedmarketresearchin4majorcitiesforintroductionofMen’scosmeticsinChina.ZotosstartedproductioninShanghai.ShiseidoLiyuanstartedbulkZaproductionofskincareproducts.LaunchedAupresDxseries.LaunchedShiseidoperfume.1999Shiseido’sChinachronicleTargetOverviewSource:OpeninformationfromShiseidoIndustryinterviewPwCanalysis71996ShiseidoLiyuancompleteditsfirst-phaseexpansionoftheplant.1997ShiseidoLiyuanlaborunionestablished.FlowerFriendsstarteddistributionofimportedShiseidoproducts.1998AsecondBeautyCentercalledPlacedelaBeautéopenedinShanghai.ShiseidoestablishedShanghaiZotosCITICCosmeticsCo.,Ltd..inShanghai.YearMajorBusinessEventsAupreslineofproductsenteredthemarketinChinaABeautyCenteropenedinBeijing.19941993ShanghaiRepresentativeOfficeopened.TianjinRepresentativeOfficeopened.ShiseidoLiyuanstartedproductionofmainlyAupresskincareandmakeupproducts.Shiseido’sChinachronicleTargetOverviewSource:OpeninformationfromShiseidoIndustryinterviewPwCanalysis81988Productionofhighqualityhair-careproductsstartedunderthethirdShiseidoTechnologyTransferAgreement.1991BasedonthefourthTechnologyTransferAgreement,Shiseidoincreasedthenumberofproducts.ShiseidoLiyuanCosmeticsCo.,Ltd.,ajointventurecompanystarteditsoperationsinBeijing.1992St...