Shiseido Cosmetics to Target Masstige Market in Indonesia
Masahiko Uotani, President and CEO of Shiseido (right) shakes hands with Franky O. Widjaja, Vice Chairman of Sinar Mas upon establishment of new joint venture company.
Shiseido (TOKYO:4911) has concluded a joint venture agreement with PT Sinar Mas Tunggal, a group company of the Indonesian conglomerate, Sinar Mas Group.
Shiseido Co., Ltd. and the Sinar Mas Group will hold equity shares of 65% and 35%, respectively of the newly established PT Shiseido Cosmetics Indonesia. Business operations are scheduled to commence in July 2014.
In the Indonesian market, which offers high growth potential, Shiseido will strive to boost sales not only by continuing to foster its Shiseido global brand, but also by stepping up focus on the masstige market. This sector is the stated to be largest cosmetics market zone and is anticipated to maintain strong growth.
Masstige, coined from “mass” and “prestige,” refers to a category that is “more expensive than mass-produced products, but more moderately priced compared to prestige products.”
A Shiseido counter in Indonesia
Indonesia has the world’s fourth largest population of 244 million (2012), about 60% of which are under the age of 35.
Notably, the younger population in urban areas is growing at a remarkable pace, generating anticipation for further growth in income and consumption.
The Indonesian market as a whole has achieved rapid recovery from historic economic downturns and the cosmetic market specifically has been growing at a robust annual rate of over 10%, which is projected to be sustained according to Shiseido’s estimates.