Shiseido shuts down all domestic direct-operated stores to contracted stores

Today, the “Huan Cai Space” of Shiseido’s direct-operated stores opened on Nanjing West Road for the past three years will be formally announced in Shanghai. Subsequently, the two flagship stores in Beijing and Hangzhou will also be closed. After the group has “farewelled” to the history stage, the Shiseido contracted stores all over the country will take the lead and will open 1,700 stores throughout the year.

The reporter learned yesterday that the flagship store of Nanjing West Road, the first direct-selling store opened by Shiseido in China, will be officially closed today. The two flagship “Rejuvenated Space” stores in Beijing and Hangzhou will also be closed on September 10 and September 25 respectively. By then, Shiseido will no longer have direct sales stores in China.

"Now our store business has developed very well. These stores have completed the historical mission of their demonstration stores." Shi Yuntang (China) Investment Corporation Propaganda Department of Corporate Communications Ni Yun explained the reason for closing the store yesterday. She stated that at the time, the “Open Space” outlets in the three places were mainly used for the demonstration of the national chain stores of Shiseido. "Now that the three-store shop rental contract is just due to expire, the role of the demonstration has also been very good, so we will close these stores."

In 1991, Shiseido Shiseido, Japan's cosmetics giant, formally entered China. In a time span of more than a decade, the company's presence in China was limited to counters in high-end department stores in big cities. In 2003, Shiseido launched a new China strategy to further explore the small and medium-sized cities. In September of that year, the “Refreshing Space” flagship store opened in Shanghai and opened the prelude to the Shiseido store business. Subsequently, Shiseido launched a contracted store model in large and small cities where department stores are not yet popular.

“By the end of last year, we had reached 1,009 franchised stores, and by the end of the year, Shiseido's franchised stores will exceed 1,700,” said Ni Yun.

According to reports, the so-called contracted store is different from the Avon store model that the industry is familiar with. In fact, it is the Shiseido company that chooses the existing cosmetics stores to cooperate and set up Shiseido counters to sell products, shops and Shiseido. Contracts are often signed every year.

According to the plan, the store business will become the main channel for the development of Shiseido in China along with the department store business. Japan's Shiseido Co., Ltd. Masaharu Maeda, president of the company, said in an interview with the Morning Post that Shiseido is expected to grow at a rate of 35% each year in China. By 2008, the franchise stores will continue to bloom, reaching 5,000. At that time, sales revenue in China will reach 100 billion yen.