TL;DR: Shiseido's 33.35 billion JPY loss is not a simple recession or an "aging" problem. It is a profound strategic failure of branding. The company is still selling "function" (ingredients, technology) to a market that has decisively shifted to buying "identity" (a lifestyle, an emotional value, a state of being). Compounded by a corporate "speaking speed" too slow for the modern attention economy, Shiseido's crisis is a critical warning: your product is irrelevant if your brand is speaking the wrong language.
James here, CEO of Mercury Technology Solutions.
I've been closely following the news surrounding Shiseido's recent financial crisis. A reported loss of 33.35 billion JPY has the market buzzing with the usual diagnoses: the brand is "aging," it's "out of touch," it "can't keep up."
These are surface-level observations. As a CEO, I am not interested in the symptoms; I am interested in the underlying systemic failure.
If we look at this from a strategic "business and traffic-flow" perspective, the problem is not that Shiseido's products are suddenly inferior. The problem is a catastrophic disconnect between their brand story and the market's new mindset.
Shiseido is a case study in what happens when a brand, built on a legacy of function, fails to see that the market has fundamentally re-anchored itself in identity.
Disconnect #1: The Functionality vs. Identity Chasm
The old branding playbook, which Shiseido mastered, was simple: sell the function. You sold the superior ingredient, the proprietary technology, the scientifically-proven result.
That era is over.
The new generation does not buy products; they buy identity. They are not asking, "What will this product do for me?" They are asking, "What does this product say about who I am?"
They are purchasing a lifestyle, a feeling, and an emotional value. Shiseido is still locked in functional communication, while the market has evolved to "I choose this brand because it represents the state of being I aspire to." This is a profound story-telling gap.
Disconnect #2: "Speaking Speed" vs. "Attention Speed"
The traditional Japanese corporate culture (and indeed, many legacy corporate cultures) prizes stability, caution, and process. In a slow-moving, predictable market, this is a competitive advantage.
In today's high-speed, short-form-video, KOL-driven attention economy, this culture is a fatal liability.
Brand relevance is no longer a fixed asset; it is a dynamic, high-stakes competition for milliseconds of attention. The market will not wait for your 12-month product-planning cycle. Your brand's "speaking speed" must be as fast as the "speed of consumer attention." Shiseido doesn't lack brand power; it lacks the velocity to participate in the real-time cultural conversations that define relevance today.
Disconnect #3: The Value Proposition Shift (From "Beauty" to "Being")
This is the most critical disconnect. Look at the high-growth brands in the wellness and beauty space today. They are not selling "beauty" in the traditional sense. They are selling a state of being.
The market's core need has shifted from an external-facing goal to an internal-facing one:
- "I want to be more relaxed."
- "I want to regain a sense of control."
- "I want to take care of myself."
- "I want to feel more powerful and centered."
This is a demand for an internal state, not an external appearance. When the market's core desire has evolved from "looking better" to "feeling better," any brand that is still leading with a message about product function will inevitably be left behind.
Conclusion: Your Brand's Language Must Evolve
Shiseido's crisis is not a recession. It is a language shift. The era's native tongue changed, but Shiseido is still speaking an archaic dialect.
This is a critical warning for every brand in every industry, but especially for those in beauty, wellness, coaching, and media. Your real competition is no longer in the lab or the factory.
It is in the narrative.
People are no longer buying a "thing." They are looking for a brand that makes them feel seen, understood, supported, and validated. They are buying a story that they can see themselves in.
This is precisely why the wellness and "mind-body" sectors are becoming so valuable. They are selling a non-commoditizable asset: a desired state of being. This is the new, unassailable value proposition.
At Mercury, this philosophy is the core of our GAIO (Generative AI Optimization) and SEVO (Search Everywhere Optimization) strategies. The old model was to optimize for what people are searching for (e.g., "best moisturizer"). The new model is to optimize for why they are searching (e.g., "how to feel less stressed").
We help our clients build a "Trust Layer" that is not based on product function, but on a deep, resonant understanding of the customer's desired identity. We architect your brand story to make you the definitive, authoritative, and resonant answer to their deepest needs.
The market has changed. Consumption has changed. Your brand must change with it.
Mercury Technology Solutions: Accelerate Digitality.
