Cosmetics maker Shiseido Co. is seeking to increase sales in China by 15 percent or more every year as rising incomes in the world's fastest-growing major economy spur demand for consumer products.
"Interest among women in skin care, makeup and hair care is increasing, boosting cosmetics use," incoming President Hisayuki Suekawa, 51, said in an interview Thursday in Tokyo.
He will be the youngest president from outside the Tokyo-based company's founding family when he assumes the post in April.
Shiseido aims to boost overseas sales to 50 percent of its total by 2017 from an expected 42 percent this fiscal year as demand in Japan drops amid sluggish wage growth and an aging population.
The 138-year-old cosmetics maker, which competes with L'Oreal SA and Procter & Gamble Co., introduced the DQ skin care brand for drugstores and hair-care products for salons last year in China, whose economy grew 10.3 percent in 2010.
"China's expansion promises growth for Shiseido," said Toshiro Takahashi, an analyst at TIW Inc. who has a "positive" rating on the stock. "The company's strength is having drugstores as a sales channel, which will allow it to lure customers in inland China."
China accounted for about 10 percent of Shiseido's ¥644 billion revenue in the year ended in March, spokeswoman Megumi Kinukawa said.
Shiseido acquired Bare Escentuals Inc. last year for $1.8 billion and entered nine markets, including South Africa and Mongolia, this fiscal year.
"We are interested in acquisitions if there is an opportunity," Suekawa said, without elaborating.
Net income may decline 26 percent to ¥25 billion for the year ending in March on a valuation loss in its securities holdings, Shiseido forecast in October. Sales may rise 6.8 percent to ¥688 billion.