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Shiseido goes West: Americas CEO Ron Gee talks buying early beauty innovation

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Jan 23, 2024
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Photo illustration: Gabriella Turrisi/Axios. Photo: Teddy Maki

Japanese beauty giant Shiseido wants to be on the ground floor of beauty innovation.

Why it matters: It's tasked Shiseido Americas CEO Ron Gee with giving the 150-year-old-plus company a fresh face through M&A and investment.

Driving the news: The company in December launched Long Term Investments for the Future (LIFT) Ventures, its first fund targeting emerging Western investments.

Details: LIFT's investments will tend to be "smaller in nature," Gee tells Axios, adding it doesn't have a steadfast dollar range.

  • "Some of these early-stage technologies could be interesting to be part of that journey, where we bring not only our science background, but our go-to-market expertise," Gee says.

Between the lines: The venture fund is in its fledgling stages, he says, and Shiseido hasn't yet had the opportunity to discuss whether some of its investments could be a candidate for the larger company.

The big picture: Strategics in the beauty space have gone "downward in sizing," in terms of identifying smaller, high-growth brands earlier in their life cycle.

  • It used to be that targets had to hit $100 million in net revenue, and that was the "demarcation line for certain assets to say, 'I'm ready to go to market,'" Gee says.
  • He believes what has moved the market downward is beauty startups' ability to get access to growth capital at earlier stages in their journey.
  • "LIFT is square on in that area, in that ability to kind of get [them] that smaller framework of support," Gee says.
  • "That would not typically be on our radar" a few years ago, he says.

Of note: Rivals Estée Lauder Cos. and L'Oréal have also established venture capital arms to identify and invest in emerging brands.

Context: Shiseido has made several moves to strengthen its positioning in the Western hemisphere over the past few years.

  • The company acquired skin care favorite Drunk Elephant for $845 million in 2019. In September 2022, it acquired London-based microbiome skin care brand Gallinée for an undisclosed price.
  • In April 2022, the company launched Ulé, a prestige, eco-conscious skin care upstart, in France.

Meanwhile, alongside heading LIFT Ventures, Gee is also the global head of M&A at Shiseido Group.

  • He keeps the firm's broader M&A strategy and LIFT ventures in two separate compartments, he says.
  • But LIFT serves to help it understand where some of the market opportunities are for its brands and where it should allocate resources in the future, he adds.
  • For its part, Shiseido has been mostly focused on building its prestige business, most recently adding prestige skin care brand Dr. Dennis Gross to its family of brands.

Yes, but: Shiseido divested several brands during the pandemic, including selling its low-cost personal care business to CVC Capital Partners for about 160 billion yen, and its Asia-Pacific professional hair care business to Henkel.

  • The company also sold bareMinerals, Buxom and Laura Mercier to Advent International's Orveon Global for an undisclosed price.

What's next: Shiseido has struck partnerships in the supplements and drinks area, especially in the Asian markets, Gee says.

  • "No doubt that those are areas of opportunities that we would consider globally," he says.
  • "It's, 'how do we bring that concept of inner beauty and make that part of who we are as a company?"
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