Shiseido Sells off its Mass Consumption Brands to Focus on High-end Skincare

Shiseido China decided to sell its brands Za and Pure&Mild to URUOI. The transaction is expected to be completed in March this year.

It is reported that Shiseido China decided to sell its brands Za and Pure&Mild to URUOI. The transaction is expected to be completed in March this year and Shiseido did not disclose the specific amount of transaction.

Talking about the reasons for the sale, Shiseido said that as the group is implementing its medium-and-long-term business strategy of Win 2023. It gradually focused on a business structure with beauty as its core. The company promotes business transformation to develop the leading brands. It strengthen its business roots and develop into a global group of beauty and skincare. With this in mind, Shiseido believes that the Za and Pure&Mild need external resources to drive their further growth.

URUOI is understood to be a beauty brand management group. Shiseido China said, “URUOI has a consumer-centric omnichannel operation and its online business operation is particularly outstanding. We believe URUOI is the ideal partner to support both brands to reach new heights.”

After the transaction is completed, URUOI will be responsible for the future development plans of both brands but Shiseido will still provide support for the production of related products during the transition period.

Public information shows that Za is established by Shiseido in 1997 for 18 to 21-year-old young women. Za focused on primer, foundation and its primer was once a best-seller. It had a certain degree of popularity in Chinese young consumers. The other brand, Pure&Mild, was established in 2001, which focused on plant-based skin care. It was also one of the first popular skincare brands to enter the Chinese cosmetic store channel. In March 2013, Pure&Mild transformed online with its official flagship store settled in the Chinese e-commerce platform Tmall.

However, the performance of both brands online in China does not seem to be as good as it could be. In terms of data from the Chinese e-commerce platform Tmall, the accumulation of previous years has not given them a better competitive advantage. Its followers and sales volume are even far less than those of emerging Chinese beauty brands established in recent years. In the industry’s view, Shiseido chose to sell it in order to focus on its core business.

In fact, Shiseido had already made two other brand divestments prior to the sale of the Za and Pure&Mild.

In February 2021, the Shiseido Group sold its 10 mass consumers brands including some personal care business such as TSUBAKI and SENKA to European private equity giant CVC Capital Partners for 160 billion yen (about $1.399 billion).

In August 2021, Shiseido transferred three of its premium makeup brands, bareMinerals, Buxom and Laura Mercier, to U.S. private equity fund Advent Capital for $700 million. This deal is scheduled to close in December 2021.

Together with Za and Pure&Mild, which will be completed in March this year, the Shiseido Group has sold a total of 15 brands. At this point, Shiseido basically completed the divestment of affordable brands, leaving 13 mass consumption cosmetic brands, including mid-to-high-end brands such as ANESSA, Revital, ELIXIR and d program.

From the various actions in recent years, we can see that Shiseido is firmly determined to focus on high-end skincare brands. In terms of the group’s strategy, apart from selling off a series of brands, Shiseido’s layout in the high-end beauty market is also noteworthy.

Last year, Shiseido Group’s high-end brands THE GINZA, BAUM, Effectim and DrunkElephant have entered China and launched their efforts in the Chinese market with the help of China International Import Expo.

In the matrix of brands in Shiseido, THE GINZA ranked top in its brandds. In September 2021, the first department store and the first boutique of GINZA were inaugurated at SKP in Beijing and IFC in Shanghai in China, which was the first time the brand was sold outside of Japan. Effectim, a high-end technology anti-aging brand focusing on “instrument + skincare”, also opened flagship boutiques in Beijing and Shanghai.




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