【正文】 ation Network PwC analysis ZOTOS Total Regional Headquarter: 3 Local Office: 18 Need Revising PwC 32 Zotos Sales Districts District I District II District III Sales Employee 45 56 21 Duties Sales Size in 2001 Monthly Sales Revenue Million RMB Monthly Sales Revenue Million RMB Monthly Sales Revenue Million RMB ? Distribution and Sales Support ? Set up sales counters in department stores ? Supervise sales counter? daily business activities ? Train beauty advisors ? Supply products to sales counters ? Provide aftersale services Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Sales Size in 2000* Monthly Sales Revenue Million RMB Monthly Sales Revenue Million RMB Monthly Sales Revenue Million RMB * The total sales size of all districts is above 30 million which is larger than the sales revenue in the profit and loss account. It will probably that the sales size from Zotos refers to the sales revenue in retail price. Need Revising PwC 33 ? Brands and department stores Aupres Shiseido Za Store listing fee no no no Others Payment term consignment consignment consignment ? Department stores do not set any monthly sales revenue target for the three brands given the brands? strong reputation in the market. ? Shiseido and Aupres usually do not involve in promotional activities held by the stores. Za participates in some of the promotions held by the stores. Business Type Stores’ earning 30days 30days 30days 20~25% of turnover 25~30% of turnover 25~30% of turnover Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 34 ? Logistics system General Process Product Plant Warehouse Regional Sales Center Warehouse Regional Sales Office Warehouse Sales Counter Products can be delivered by air in case of emergency. Distribution Channel Transportation by Road Transportation by Railway Transportation by Air Source： Industry interview PwC analysis Shiseido amp。 the amount in 1998 and 1999 are deduced from the figure in 2000 and the growth rate based on our data from 40 departments all over China. Perfume is excluded from the sales amount and the total market share. Unit: Million Yuan RMB Need Revising PwC 24 I: Executive Summary II: Target Overview III: Market and Products IV: Distribution Channel V: SWOT Analysis and Our Comments VI: Financial Analysis VII: Appendix Need Revising PwC 25 Distribution Channel ? Shiseido Liyuan and Zotos have set up an extensive distribution work in China and they both are only interested in selling directly through sales counters in department stores instead of distributors。 Equipment maintenance Finance amp。 Marketing Dept Import products sales** *Handles imports of raw material and finished products. **Beijing Flower Friends Cosmetics Sales Center Target Overview Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 19 ? Organizational Structure Zotos Production Management Dept Warehouse amp。 opened in Shanghai and provided beauty counseling for Shiseido and Aupres? loyal customer.* ? Passed ISO 9002 certification in March. ? Shiseido Liyuan pleted its secondphase expansion of the plant. ? Launched Aupres Dx series. ? Launched Shiseido perfume. ? Shiseido Liyuan started bulk Za production of skincare products. ? Zotos started production in shanghai. SHISEIDO GROUP ? SHISEIDO GROUP in China * With 3,000 RMB annual spending on the Shiseido brand or 1,500 RMB on Aupres, a customer is qualified to bee a member of the Center. Need Revising PwC 10 2000 ? Zotos started distributing the product in major cities in China. 2001 ? SHISEIDO GROUP plans to launch men?s cosmetics in China in October. Year Target Overview Source： Open information from Shiseido Industry interview PwC analysis Shiseido Aupres Za ? Shiseido Liyuan received ISO14001 for Environment Management System. ? SHISEIDO GROUP established its first flagship store, Salon des Cosm233。tiques, in Beijing. The new outlet will sell SHISEIDO and AUPRES cosmetics. SHISEIDO GROUP ? SHISEIDO GROUP in China Need Revising PwC 11 ? Shiseido China Group Structure Shiseido Zotos CITIC Cosmetics Co., Ltd International Business Dept, Shiseido Co., Ltd Shiseido Asia Headquarter Shiseido Liyuan Cosmetics Co., Ltd Beijing Flower Friends Cosmetics Sales Center** Overseas Management Legal Entity in China Business Scope Produce and sell Aupres in China Exclusive right to sell Shiseido in China Produce and sell Za in China 65% share 80% share *Asia Headquarter controls the Chinese market operation through the China representative office. ** It is 100% owned by Shiseido Liyuan Target Overview Source： Industry interview China Economic Information Network PwC analysis SHISEIDO GROUP China Representative Office* Need Revising PwC 12 ? Company Profile Shiseido Liyuan Cosmetics Co., Ltd. Company Type SinoForeign Equity Joint Venture Registered Capital (USD Mn) * Partner and Share Partner 1: Shiseido Co., Ltd. (Japan) Partner 2: Beijing Liyuan Co. ** 65% 35% Sales Revue in Retail Price 390 Sales in 2000 (RMB Mn) Total Employees 1,164 (including beauty advisors) Location Beijing Start Year 1991 Main Business Production and sale of Shis