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By
Reuters
Published
Feb 5, 2009
Reading time
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Shiseido may buy India, Middle East distributors

By
Reuters
Published
Feb 5, 2009

TOKYO, Feb 5 (Reuters) - Shiseido Co (4911.T), Japan's largest cosmetics maker, may buy distributors in India, Vietnam and the Middle East to boost its sales growth in these emerging markets, the company's top executive said on Thursday.

The company, which aims to expand via its overseas operations, has bought a distributor in Russia and is currently building a production hub in Vietnam.

"For the emerging markets of Vietnam, India and the Middle East, we have to come up with new business models. We may need new partners then," Shiseido president Shinzo Maeda told a news conference.

Taking full or partial stakes in existing distributors and forming joint ventures may give the firm a more direct way to reach consumers, he said.

"We already sell our products in these areas through (independent) distributors. But reaching out to customers directly is probably a more direct route for us to penetrate the Shiseido brand into these markets," Maeda said.

Shiseido still aims to increase the number of shops it has contracts with in China to 5,000 by March 2011 from 3,300 last year, despite the economic slowdown.

"I think we can continue achieving sales growth of around 20 percent in China in the year to March 2010 and the year after," Maeda said.

Shiseido will concentrate its investment efforts on 40 cities around the world and will keep seeking opportunities to acquire other brands, he said.

For the year to March 31, Shiseido expects to post revenue of 700 billion yen, down from 723 billion yen a year earlier, and an operating profit margin of 8 percent. (Reporting by Yumiko Nishitani; Editing by Hugh Lawson)

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