"Slow ingenuity" was once the most distinctive label of J-Beauty and one of its core competitiveness. However, in the context of the rapid development of the Internet and AI, this label is facing unprecedented challenges.

At the performance level, the challenges of declining profits, increasing profits without increasing revenue, and huge losses in profits have become the norm for Japanese cosmetics groups.

Our company has reviewed the performance of Nippon Paint Group, which has released its 2025 financial report, and found the following key information worth paying attention to:

1. The net sales of the four major Japanese cosmetics groups did not increase or decrease by more than 4%, tending to be flat. In terms of decline, Shiseido Group and POLA ORBIS' net sales decreased by 2.1% and 0.6% respectively;

2. On the level of operating profit, Shiseido Group suffered a loss of 28.788 billion yen (approximately 1.295 billion yuan), while Kao Group's operating profit was the highest among the four Japanese cosmetics companies, with a significant increase of 61.24% year-on-year;

3. On the brand side, Drunk Elephant has plummeted by 39%, while Jurlique and POLA have declined for 3 and 4 consecutive quarters, respectively. The latter's annual sales decreased by 2.425 billion yen (approximately RMB 109 million);

4. Market performance showed a 4.3% decline in Shiseido Group's China and tourism retail businesses, a decline in POLA ORBIS overseas markets, and gains of over 8% and 4% respectively in the Asian markets of Hisilicon Holdings and Kao Corporation;

5. Since 2025, struggling Japanese cosmetics giants have frequently dissolved their Chinese subsidiaries, engaged in liquidation, store closures, and layoffs;

6. In the 2025 International Beauty TOP list, Shiseido Group, which ranks first in Japanese cosmetics, only ranks eighth, with a difference of 23.271 billion yuan from the previous LVMH Group. There is also a possibility of being overtaken by Puig Group (Shiseido Group is only 2.385 billion yuan higher than it).