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Kao to pour resources into Asia-friendly Sensai and Kanebo brands

Consumer products giant aims to double margin in cosmetics

Kao announced a new strategy to turn key group cosmetics brands like Kanebo into big global names.

TOKYO -- Consumer products manufacturer Kao will concentrate investment on 11 of its roughly 50 cosmetics brands, with an emphasis on developing high-end offerings to better compete in greater Asia.

Under plans announced on Friday for a new global portfolio, the Tokyo-based company will focus resources on product development and marketing for 11 "global strategy brands," that include Sensai, Kanebo and Kate.

Kao expects the new strategy to boost sales in its cosmetics business beyond 300 billion yen ($2.71 billion) and roughly double that segment's operating profit margin to 10% in 2020.

The company will also shift away from developing brands tailored to specific distribution channels, such as department stores and specialty stores. It will start managing brands in a way that better appeals to a broader audience.

Geographically, Kao sees Asia as its most important market, thanks to growing demand for high-end cosmetics there. It will launch the flagship Sensai brand in China in 2020. The freeplus skincare brand will be expanded in the Chinese and Southeast Asian markets as well.

"We will refine the defining qualities of each brand and accelerate growth in Asia and Europe," Kao executive officer and Kanebo President Yoshihiro Murakami told reporters on Friday.

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