7. Kao
Japan
www.kao.co.jp
Beauty Sales: $6.3 billion
Corporate Sales: $13.2 billion

Key Personnel: Motoki Ozaki, president and chief executive officer; Takuo Goto, senior executive vice president, global production and engineering, global environment and safety; Hiroshi Kanda, executive vice president, global consumer products, global marketing development; Norihiko Takagi, executive vice president, president, international business, consumer products; Masao Hirota, president, global beauty care business.

Products/Brands: Personal care, skin care, hair care and color cosmetics, such as Kanebo, Bioré, Curél, Sofina, Segreta, Asience, Merit, Goldwell, Molton Brown, John Frieda and Jergens.

New Products: Sofina Beauté, Bioré Deep Moisturizing Cotton lotion, Segreta hair esthetic treatment, Kanebo Dew Superior.

Comments: Kao’s beauty care business was the impetus behind its corporate sales rising 7.0% for the fiscal year ending March 31, 2008, with beauty net sales increasing 7.5% to $6.3 billion. The beauty sector, which includes prestige cosmetics and premium skin care and hair care products, accounted for almost 50% of total sales. Kanebo Cosmetics was a major contributor to growth. Overall sales were the strongest in Asia and Europe. In the Asia and Oceania regions, sales increased a whopping 25% over the previous year, while European sales jumped nearly 14%. Both Japan and the Americas showed single-digit growth rates below 5%.
  
Kao underwent a major reorganization in 2007, combining the consumer products and cosmetics business, which has reportedly revitalized the organization. Despite rising raw material prices, Kao’s CEO Motaki Ozaki said that the company had exceeded its performance projections due to “aggressive launches of high-value-added products and successful efforts to strengthen sales capabilities…in Japan and Asia.” In 2008, Ozaki said the company will continue its focus on “strongly growing Asian markets,” particularly China, which he says is key to its growth. He admits, however, that while his company was an early entry into the Asian markets more than 40 years ago, it has not kept pace with changing lifestyles and distribution patterns. Focus will now be more on improving sales per store rather than adding doors.
  
Kao plans on doubling its mega-brands with sales of 10 billion yen or more to 16 by 2010. In fiscal 2007, Kanebo Cosmetics launched mega-brands Dew Superior, a skin care line, and Coffret, a makeup brand. Kanebo is the major target for expansion.
  
In the U.S. and Europe, Kanebo Cosmetics underwent a total renewal of the Sensai premium skin care range, resulting in growth. British brand Molton Brown also performed well. Sofina Beauté, an anti-aging skin care line, got off to a good start and helped to strengthen the Sofina brand. Bioré and Bioré U also did well. The company also launched Bioré Shower Cream in four countries—Thailand, Indonesia, Malaysia and Vietnam—where the use of body soap
is increasing. However, sales of brands such as John Frieda and Jergens were sluggish due to increased competition in U.S. markets.