【正文】 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。 Need Revising PwC 26 Shiseido Brand Flower Friends Sales Center Dah Chong Hang Guangzhou* Shiseido Liyuan Shiseido Liyuan’s Offices in 23 cities 49 Counters in luxury department stores in 22 cities** Consumer ? Flower Friends is the only distributor authorized to sell the Shiseido product in China. ? Flower Friends is fully controlled by Liyuan and uses Liyuan?s distribution work to sell Shiseido products in China Notes: * Dah Chong Hang is a general trading pany based in Hong Kong, sells Shiseido products in the Hong Kong and Macao markets since 1962. In 1998,SHISEIDO GROUP established a joint venture with DCH, Shiseido Dah Chong Hong Cosmetics Ltd..Dah Chong Hang Guangzhou is a subsidiary pany. ** Refer to Appendix for a list of the counters In addition to Liyuan?s work, Flower Friends also uses Dah Chong Hang is to sell Shiseido in Guangdong Province. Given rising consumer ine in many cities, Shiseido Liyuan has increased its total number of sales counters steadily from 38 in 1998 to 49 in Feb, 2001 at about 8% pound average growth rate (CAGR) over the past three years. ? Current Distribution Channel Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 27 ? Current Distribution Channel Aupres Brand Shiseido Liyuan Cosmetics Co., Ltd ? Shiseido Liyuan has opened 23 sales offices in China. However, the sales work is still under development and will have some changes / adjustments in the future. ? Dah Chong Hang is the only local distributor for Aupres in China and it is responsible for Aupres? sales in Guangdong Province. ? Shiseido Liyuan has increased the total number of sales counters rapidly from 168 in 1998 to 243 in Feb, 2001 at a 13% CAGR over the past three years. ? Shiseido Liyuan will try to raise the sales revenue per counter and limit the total number of counters to no more than 270. The original plan was to set up as many as 300 to 330 counters. Offices in 23 Chinese cities 243 Counters in high class to luxury department stores in 73 cities* Consumer ? Shiseido Liyuan?s Sales Department is in charge of the overall management of all its Aupres sales counters in China, but the daily sales management is usually the responsibilities of the local sales offices in each region. Notes: * Refer to Appendix for a list of the counters Dah Chong Hang Guangzhou Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 28 ? Current Distribution Channel Shanghai Zotos CITIC Cosmetics Co., Ltd Offices in 21 cities 220 Counters in middle to high class department stores* Consumer Notes: * The list of the counter is not available. ? Zotos has not only opened some counters in highclass department stores, but also in the midclass department stores where Shiseido and Aupres normally do not have their counters. ? Zotos has increased the total number of sales counters to about 220 in China and the actual figure may be even larger according to L?OREAL. ? Shiseido Zotos? Sales Department is in charge of the overall management of all its Za sales counters in China, but the daily sales management is usually the responsibilities of the local sales offices in each region. Za Brand Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 29 Shiseido Liyuan Total Regional Headquarter: 5 Local Office: 16 ? Distribution and Sales Support Regional Headquarter: Shenyang Office: Dalian Harbin Changchun Northeast Regional Headquarter: Shanghai Office: Hangzhou Nanjing Wuxi Ningbo East Regional Headquarter: Guangzhou Office: Zhuhai Shenzhen South Regional Headquarter: Beijing Office: Shijiazhuang Lanzhou Tianjin North Regional Headquarter: Chongqing Office: Changsha Kunming Chengdu Wuhan Southwest Distribution Channel Source： Industry interview China Economic Information Network PwC analysis Need Revising PwC 30 Shiseido Liyuan Sales Districts Northeast North East Sales Employee 17 29 38 Duties ? Set up sales counters in department stores ? Supervise sales counter? daily business activities ? Train beauty advisors ? Supply products to sales counters ? Provide aftersale services Sales Size in 2001 Monthly Sales Revenue Million RMB Monthly Sales Revenue 5 Million RMB Monthly Sales Revenue Million RMB South 19 Monthly Sales Revenue 4 Million RMB Southwest 25 Monthly Sales Revenue 5 Million RMB ? Distribution and Sales Support 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 Monthly Sales Revenue Million RMB Monthly Sales Revenue Million RMB Need Revising PwC 31 Regional Headquarter: Beijing Office: Tianjin Dalian