Procter & Gamble has said sales of high-end SK-II skincare brands fell 34% between October and December.
Procter & Gamble has reported that sales of its high-end SK-II skincare brand fell by 34% between October and December, which the firm’s executives attributed to anti-Japanese sentiment in addition to China’s slow recovery12. Last year, Japan began releasing treated radioactive water from its Fukushima nuclear power plant, which was hit by a massive tsunami in 2011. China opposed the move and banned all seafood imports from Japan, despite the UN’s assurance of its safety. Disinformation fuelled fear and suspicion in China, leading to consumers boycotting Japanese brands, including P&G’s SK-II. Rocks were thrown at Japanese schools and hundreds of hostile phone calls were made to businesses in Fukushima12.
However, P&G executives have stated that SK-II is already seeing sales turn around in recent months. “Our consumer research indicates SK-II brand sentiment is improving, and we expect to see sequential improvement in the back half,” said the company’s chief financial officer, Andre Schulten, on the company’s earnings conference call1.
This is not the first time SK-II or Japanese brands have faced a boycott in China. In 2012, a wave of anti-Japanese protests across China over a territorial dispute led to a halt in production at Japanese carmakers, Toyota, Honda, and Nissan, whose showrooms were attacked. Other Japanese companies affected included the electronics company Sony, fast fashion brand Uniqlo, and the shopping chain stores Aeon. The islands, known as Senkaku in Japan and Diaoyu in China, are controlled by Japan, but both China and Taiwan lay claim to them1.
P&G’s chief executive officer, Jon Moeller, said on the earnings call that previous tensions have also hurt SK-II’s sales, but the brand always bounced back. The company’s overall earnings were mixed as the firm cut its annual profit forecast due to a one-off charge related to its Gillette business. However, demand for the company’s daily-use products, mainly in the grooming and home-care segments, remained strong despite high prices1
