Interview: Shiseido Travel Retail Japan powers ahead as new Ultimune line gets off to a flier

Prologue: Having made its travel retail debut on 1 March – immediately after a blockbuster two-day unveiling in Tokyo attended by The Moodie Davitt Report – the much-anticipated new Shiseido Ultimune Power Infusing Serum has got off to a strong start in the channel. On the eve of the launch, Martin Moodie spoke to Shiseido Travel Retail Japan Vice President Tatsuya Nagai at Japan Duty Free Ginza in Tokyo, about the new line and how Japanese travel retail, buoyed in recent times by a low Yen, continues to outperform its North Asian neighbours.

It’s late February on a gorgeously clear late winter’s day in Tokyo. Shiseido Travel Retail Japan (TRJ) Vice President Tatsuya Nagai’s mood is equally as bright as he chats optimistically about the imminent launch of the new Shiseido Ultimune Power Infusing Serum.

We’re at the impressive Japan Duty Free Ginza store, the elegant eighth floor retail emporium in Mitsukoshi Ginza, in the heart of Tokyo’s and the nation’s most famous shopping district.

The store – a joint venture between Japan Airport Terminal Co (67.5%), NAA Retailing Co (27.5%) and Isetan Mitsukoshi Holdings (5.0%) – is an apt setting for our conversation due to Shiseido Company’s star-studded portfolio dominance of the expansive and high-class beauty zone.

In four days’ time the much-anticipated fourth iteration in Ultimune’s stellar 11-year history will be rolled out here and across Shiseido TRJ’s entire Japanese store network and Nagai is convinced it is going to be a major success

{Note: a well-justified conviction as it turned out. In late April, Nagai told The Moodie Davitt Report, “Since the launch of the new Shiseido Ultimune serum in March, travellers resonate with the brand and product value with early strong purchasing response in travel retail Japan.”}

“This is the biggest initiative for us this year. As the world’s first Memory T cell anti-ageing serum, it is a very big innovation in the skincare category. It’s a breakthrough technology which, I think, will change consumer behaviour,” says Nagai, a 33-year veteran of the Japanese beauty powerhouse.

The company is doing everything in its considerable power to ensure that happens, dressing the exteriors of renowned Ginza landmarks such as the Mitsukoshi and Matsuya department stores and the famed Shiseido Parlour in Ultimune branding to support the launch.

“Ginza is a very famous place in Japan, so we believe a lot of travellers will see these promotions and it will have a big impact on awareness,” Nagai observes.

Awareness and sales. And that spells further good news for Shiseido TRJ coming off a remarkable 2024 when revenue rose +60% year-on-year from an already solid rather than post-COVID base.

That performance was aided by the prevailing weak Yen, which drove a strong increase in visitor numbers to Japan (36.9 million in 2024, up +47.1% year-on-year and +15.6% over the previous high of pre-pandemic 2019).

Japanese outbound travel in 2024 rose +35.2% to just over 13 million though that number is still -35.2% (same percentage) down on 2019’s 20,080,669. With inbound numbers expected to pass 40 million this year and outbound Japanese travellers to reach 14 million (up +8.5%), 2025 is also shaping well.

Nagai knows such numbers intimately, having been tasked in April 2021 with turning the TRJ business around after the ravages of COVID. “At that time it was almost zero business,” he recalls ruefully. Today, though, it’s a case of strong tailwinds – a rarity in an otherwise deeply troubled North Asian travel retail beauty market.

“We have many brands in TRJ and as a group we are number one in Japan,” he observes. “Our sales last year increased by more than +60% and this year we have made a very good start. As I mentioned, our business was very small in 2021 but today we are the fastest-growing department in the Shiseido group.”

Shiseido is a strong number one across Japan’s travel retail market, operating airport, downtown, inflight and offshore duty-free locations from the southern island of Okinawa to Hokkaidō in the north.

The 2024 numbers tell a hugely impressive story but there’s far more to the narrative than relying on passenger growth. Shiseido Travel Retail seized on that momentum with a flurry of retail innovations, including the opening of new counters for NARS (the French beauty house founded by makeup artist and photographer François Nars in 1994 and acquired by Shiseido in 2000) at Narita International Airport last September and at Haneda Airport two months later.

“Before that we only had NARS at Kansai Airport and downtown in Tokyo with Lotte Duty Free so the new counters have really helped us grow the business. Right now we are putting a lot of effort behind NARS,” Nagai comments.

“We used to focus mainly on the Japanese-origin brands but today NARS is one of our core brands in TRJ and is very popular. It also attracts many nationalities, not just Chinese and Japanese but also Koreans, Indian, other Southeast Asians and western people. That brings us a lot of opportunities.”

While TRJ’s year-on-year growth in Q4 2024 slowed in percentage terms (+30%), that was only because the tourism revival started in late 2023, meaning a higher baseline comparison, Nagai explains. “Our sales are continuing to go up, not down.”

Besides the sheer strength of its brand portfolio, Shiseido Travel Retail offers other attractions to today’s evolving consumer base, he notes. “I believe that we have a very good balance. We have a long history of tradition, an image built around authenticity and our Founder Arinobu Fukuhara’s respect of art. But we also offer the latest technology featuring breakthrough innovations.

“We call it richness. Right from our origins, Shiseido has always tried to create a richness for the consumer. And I think, especially recently, many consumers have discovered our richness. They like our products because our packaging and visual imagery are very artistic. And inside there is also very high and modern technology, featuring major innovations. So that balance attracts.” {Main story continues following the panel below}

A moment of the beautiful journey The waiting is nearly over. It’s 28 February and in a few hours, Shiseido Travel Retail Japan (TRJ) will roll out the new Shiseido Ultimune Power Infusing Serum at Haneda International Airport, writes Martin Moodie. It’s early morning here at Tokyo’s second gateway, from where I’m due to catch my flight to Hong Kong, unfortunate timing given that the launch takes place tomorrow, 1 March. Shiseido Travel Retail Japan (TRJ) Vice President Tatsuya Nagai and colleagues are kindly on hand to take me on a pre-launch tour of the beauty house’s expansive Haneda offer, focused mainly on the richly elegant Shiseido Haneda Boutique operated in partnership with Japan Airport Terminal Co (JATCo). This flagship is based on a nicely storied concept themed ‘A moment of the beautiful journey’. To ensure travellers do indeed have a beautiful journey, involving ‘a good trip with good skin’, the boutique is split into three distinct areas – Discovery Zone, Gift Zone and Personal Beauty zone – collectively packed with an extensive array of Shiseido products (including a Haneda Boutique exclusive set), digital technology and personalised services. “We want to help you prepare your skin and mind so you can enjoy the trip of your lifetime with your five senses,” Shiseido says. “Shiseido Haneda Boutique is a place for everyone to experience the unique Japanese hospitality of Omotenashi, enjoy a memorable encounter, and find a new inspiration.” Nagai shows me to ‘Make Your Mark’ in Gift Zone, which allows customers to personalise select purchases through an engraving service, thus creating an original memento from the trip. Letter and pattern options allow shoppers to create their own design, anything from Happy Birthday messages to Shiseido Haneda Boutique branding. The Wrap It Up service within Gift Zone immerses shoppers in the traditional Japanese culture of gift wrapping with Haneda-original furoshiki cloths, gift boxes and mizuhiki ribbons, all presented with the revered Omotenashi touch. My Beauty Lounge encourages store visitors to experience a moment of luxury to reset their skin and mind pre-flight. “Travellers can sit down and relax here while trying our products,” Nagai explains. And they can even make up here before they travel. It’s very convenient for those on long flights.” Next stop is Discovery Zone, where the consumer is greeted by an intriguing array of advanced but user-friendly digital tools, including virtual makeup try on, and touch-free skin analysis, complemented by very human personal consultations. Nagai invites me to try on a virtual lipstick to see how the technology works. “Okay, put me in the brightest Shiseido red!!” I declare almost as boldly as the lipstick itself. “There you go,” Nagai says with a quickfire touch of the screen and a beaming smile as he admires my newly beautified look. Truly a travel retail-exclusive.

Nagai is optimistic that despite a recent strengthening Yen, government predictions of another strong inbound and outbound year for tourism will be delivered. He is equally upbeat for the longer term, buoyed by the Japanese government’s aim to attract 60 million visitors in 2030. That represents a +63% increase over 2024 levels, resulting in ¥15 trillion (US$98 billion) of visitor spending, a significant slice of it in duty free no doubt.

“So that’s why each airport is now trying to expand capacity,” Nagai continues, citing the renovation and expansion of Fukuoka International Airport (which took place on 28 March, complete with a sizable Shiseido Travel Retail zone, following the opening of arrivals duty free nine days earlier). The project delivered a series of upgrades not only to capacity but also to the overall passenger experience.

“So the big airports – Haneda, Narita and Kansai – are nearly reaching capacity. But other than these big airports, there is more room to grow the travellers.” With such capacity enhancements, it’s vital to maximise the related commercial opportunities, Nagai says. Strong communication to travellers, not just the dominant South Koreans and Chinese but other visitor nationalities, will be critical.

“We have a very big OOH presence at each strategic airport such as Haneda, Narita, Kansai and Fukuoka. And through Social Networking Service (SNS) we can communicate with travellers during their trips to Japan with targeted advertisements and brand awareness campaigns. Then at the counters we offer a very good service to the consumer called Omotenashi [a unique and deep-seated Japanese concept of service that combines hospitality and care], while encouraging passengers to try our products. Our staff are also trained in various languages.

“We have a mission at TRJ that we should be a showcase for the Shiseido brands, especially to those overseas travellers. The airports are a last opportunity to showcase our brands so that’s why we try so hard to make the traveller happy through the combination of our products and our good service.”

Nagai wisely avoids any predictions on what will happen to the Yen (trading at ¥142.83 to the US$ as we published this article vs ¥149.32 on the day of our interview) during 2025 and says the company should not rely on currency swings to dictate its travel retail approach.

“It may go up; it may go down but regardless of how the Yen is doing we are simply focusing on our service and the quality of the products. Fortunately, the Yen is currently doing well for us but if that turns around we will still offer good service and products to attract travellers. Once they try our products, I believe they will use them repeatedly.”

Our conversation moves on to the evolving behaviour of Chinese travellers, historically – and still – so critical to Japan’s tourism and travel retail sectors. How does Shiseido TRJ view that evolution?

“Their behaviour has changed from before COVID-19 – it is totally different,” Nagai responds. “Before COVID-19, they just purchased many pieces. But now they compare the product and the price and value.

“They are also very savvy about product quality and the level of technology or innovation. Fortunately that plays to our strengths. Because of the quality we are very confident that Chinese people will continue to choose our products. In fact the average purchase amount per Chinese traveller isn’t dropping, it’s actually a slight increase.”

Given the travel retail beauty sector’s over-reliance in the past on Chinese shoppers, bulk and otherwise, how does Shiseido view the shopping behaviour of other nationalities?

“Actually, many nationalities love to come to our counters recently, but the fastest-growing ones are Taiwanese and Koreans,” Nagai replies. “Taiwan is growing very rapidly and Southeast Asians – especially people from Thailand, Indonesia and Singapore. And now, because of NARS, we are also attracting more Indians and Europeans.”

Fragrances is also a key category to attract Western and Indian consumers, Nagai points out, resulting in the launch of Shiseido Ginza eau de parfum into Japan travel retail this month.

Interest in wellness products has also surged since COVID, prompting the company in July 2024 to launch Shiseido Ultimune Probiotic Powder, which is claimed to double the power of the skin barrier and repair from inside.

“So now we have products targeting both inner and outer beauty,” says Nagai. Protection of the latter has been key to the sustained growth of one of the company’s biggest success stories of recent years, suncare brand Anessa, an Asia-wide leader in the category.

“Anessa is a very strong performer for us. It has been the number one suncare brand for 20 years in Japan and is also very popular in other Asian countries. It was one of the factors in last year’s +60% increase and is growing very fast year-on-year.”

NARS’ strong performance (it was Shiseido TRJ’s fastest-growing brand last year and has proved a particular hit with younger consumers) and an encouraging debut from Clé de Peau Beauté’s new Precious Gold Vitality Serum and the March 2025 launch of new items from The Ginza [The Ginza Hybrid Gel Oil, The Ginza Essence Lotion and The Ginza Essence Emulsion] offer further encouragement.

Shiseido’s in-store approach was also shaped by the pandemic but in a positive way, Nagai says. “Because the stores were closed at the time, our staff had to stay home. So we focused on training for them. Through educational materials such as video, we helped our consultants improve their service and we even offered training in language skills, such as Chinese and English. And so during this period, they grew their skills a lot.

“They learned about the products, service and our new digital technologies. So all this kind of activity helped the business recover very strongly.”

Not just recover but surge ahead. Our time is up and after a quick tour of the Shiseido area within Japan Duty Free Ginza, it’s time for Nagai to bid a temporary farewell. He has pressing business to attend to, in the ultra-promising shape of Ultimune’s new iteration, one of the highest-profile lauches in Shiseido TRJ’s history.