Japanese cosmetics company Shiseido has cut its full-year profit forecast due to a drop in demand from Chinese consumers. The decline follows Japan’s release of treated radioactive water from the Fukushima nuclear plant. The company now expects a core operating profit of 35 billion yen ($231 million) for the year, 42% less than previously forecast, and has also lowered its sales forecast to 980 billion yen, down 2%.
Sales in China and the travel market fell about 10% in the third quarter after the Fukushima water release. In response, Shiseido cut back on marketing and suspended promotions. The company expects the impact of this issue to last until the first quarter of 2024. The Fukushima water release, while meeting global safety standards, has led to tensions, with China suspending imports of Japanese seafood and concerns about Japanese cosmetics spreading on social media.
Shiseido’s revised profit forecast highlights the challenges faced by international companies in dealing with geopolitical and environmental issues. The company’s performance reflects the broader impact of international relations and public perception on business, particularly in sensitive sectors such as cosmetics. This situation has led to a significant decline in Shiseido’s share value, in contrast to the general market growth.
