A Japanese personal care company has revealed that its products are highly in-demand among Chinese tourists.  However, the company continues to struggle to increase its sales in the Chinese market.

The latest figures from Shiseido Co Ltd shows that its 2015 annual sales were up by 12.6 percent at 763.1 billion yuan ($6.7 billion). Experts attribute the boost in sales to Chinese tourists' interest in its products.

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The corporation also announced a spike in its operating income by 77.4 percent to 37.7 billion yen ($330 million). However, its business in the mainland apparently only grew by 2 percent.

Norio Tadakawa, the CFO and corporate officer of the cosmetic and fragrance producer, explained that "We have seen a substantial increase, both in sales and income, mainly due to our major brands in the domestic market." He claimed that last year, Shiseido's operations in both major Chinese cities Beijing and Shanghai faced some difficulties.

According to Tadakawa, for several years, the company has experienced a flatline in sales across Shanghai. But the enterprise, which also offers skin care and hair care products, aims to break the trend and increase its sales by 10 percent across China this year. 

Tadakawa said that the company is hoping to tap into the potential of China's middle-class market, thus expanding consumption and diversifying its products. He cited the fact that growth of e-commerce in China is anticipated to increase by 20 percent.

The company plans to set up an innovation center in the mainland to help its growth. However, Tadakawa admitted that penetrating the market can be quite challenging, noting the tough competition from South Korean brands. 

In fact, a study conducted by Kantar Worldpanel China revealed that in terms of high-end items, sales of South Korean brands are nearly three times higher than Japanese products, with figures at 33 percent versus 11.6 percent, respectively.

Shiseido's sales results are not that far from that of its local rival Kao Corp., which claimed that its results went up only by 5 percent compared with last year to 1.47 trillion yen ($13 billion). 

According to Laurie Du, an analyst from Mintel Group Ltd., Chinese consumers have relatively become acquainted with other international brands from travelling overseas frequently, particularly Japanese items bought in Japan. She added that made in Japan products now account for 29 percent of all skincare products sales in China - a figure higher than sales of products from South Korea and France. 

TagsShiseido, Japan cosmetics, cosmetic brands, Chinese Market