P&G reported a 34% decline in SK-II sales in Greater China, including domestic travel retail, in the latest quarter ending December 2023.
Overall, P&G’s beauty division grew just 1% due to a tough quarter at SK-II.
The company blamed the decline on Chinese consumers’ concerns about the safety of Japanese brands following Tokyo’s decision last year to release radioactively treated water into the Pacific Ocean.
This sparked a backlash, leading Chinese consumers to boycott Japanese products, including beauty and personal care products.
A quick search on Weibo, a Chinese online platform similar to X/Twitter, will yield thousands of comments supporting the boycott.
But P&G’s latest consumer research has more positive results.
“Consumer research in China shows that SK-II’s reputation is improving. And we continue to drive innovation and equity investment, reaching out to our most loyal and passionate user base to amplify that message. We really rely on it and it’s working well. So we expect that effect to improve year-over-year, quarter-over-quarter.”P&G Chief Financial Officer Andre Schulten said:
The company’s CEO, John Mueller, added that SK-II has overcome similar anti-Japanese obstacles in China.
“We have experienced similar, if not the same, consumer sentiment dynamics in the past with respect to this brand and the relationships between brands. [China and Japan]. And that has always been resolved by SK-II advancing to greater heights. ” Mr. Mueller, who is also P&G’s chairman and president, said:
The company expressed confidence in SK-II’s future in China and believes it will recover in the second half of this year.
“With our continued investment in SK-II, we are confident that our performance will recover in the second half of the year, as we have already seen, as sentiment improves.”Schulten said.
At the same time, the brand was striving to win back Chinese consumers through various communication efforts.
“What we are doing is doubling down on innovation, doubling down on communication around efficacy, product quality and brand quality, and leveraging the most loyal and passionate consumer groups to make the SK-claim. I believe II will help us improve our run rate in the second half.”Schulten said.
Mr. Moller highlighted a personal experience. “SK-II heavy user”I met him in Beijing.
“She said, ‘I’m more scared of the acne I’ll get if I don’t use this than I am of myself.’ [treated wastewater]”
nuclear fallout
Japan’s polarization movement has not only affected SK-II, but also many Japanese cosmetics companies.
Companies such as Shiseido and Kose have historically been highly regarded by Chinese beauty consumers; Negative impact on sales.
The luxury skincare brand, famous for its facial treatment essence known as “miracle water” among Chinese speakers, has faced challenges due to China’s slow economic recovery over the past year.
