By Yue Linwei, In front of the Shanghai plant of Japanese consumer goods giant Kao Corp in Maqiao township, Minhang district, east China’s Shanghai, lies the “Huawang” Road (Huawang is the Chinese translation of Kao). When the plant was just established in the 1990s, this road was merely a gravel path. Today, it has evolved into a modern four-lane highway.
“The road’s transformation reflects Kao’s flourishing development in China over the past 30 years and the shared prosperity between Kao and the Chinese market,” said Gu Ren, general manager of Kao Commercial Shanghai Co., Ltd., during an interview with People’s Daily.
On Gu’s desk, there are two photographs. One, taken in 1996 when Kao’s Shanghai plant was newly built, shows the factory surrounded by villages and farmland. The other is a recent image depicting a modern industrial park featuring residential areas, lush greenery, and beautiful surroundings.
“The huge Chinese consumer market is full of vitality. We never waver in our commitment to deeply engaging with the Chinese market,” Toru Nishiguchi, senior managing executive officer of Kao, told People’s Daily.
He said that China’s continuous optimization of its industrial structure in recent years has created broad opportunities for foreign enterprises.
Kao first entered the Chinese market in 1993, initially focusing on the sales of facial cleansers and shampoos. Over the years, Kao’s brands have gained significant recognition among Chinese consumers. “Today, Kao (China) Holding Co. Ltd. has grown into a comprehensive group encompassing household products, cosmetics, and industrial chemicals,” Nishiguchi explained.
“China has been expanding high-level opening up,” said Nishiguchi, who has extensive work experience in China. “The Chinese market remains resilient and dynamic. Thanks to China’s booming daily consumer goods market, Kao’s Chinese businesses have grown rapidly.”
According to data from the National Bureau of Statistics of China, cosmetics retail sales in China reached 414.2 billion yuan ($56.52 billion) in 2023, more than ten times the sales recorded in 2006.
It was in 2006 that Kao (China) began its cosmetics operations in the Chinese market. From 2006 to 2023, the company’s cosmetics sales in China also surged by more than ten times, according to an executive of the company. “We have been growing and thriving together with the Chinese market,” Nishiguchi remarked.
During the interview, Nishiguchi highlighted a new product launched by Kao in February 2024, which was developed primarily by the Chinese R&D team. The entire process of the product – from research and testing to production and sales – was carried out in China, said Nishiguchi.
“When developing the product, we have taken into account the personalized needs of Chinese consumers,” Nishiguchi said. He believes the product’s success in the Chinese market is due to its alignment with Chinese consumers’ pursuit of a better life and validates Kao’s localized business strategy in China.
“As China’s economy continues to develop, Chinese consumers need more personalized, diversified, and high-quality products. These emerging trends in the Chinese consumer market present new opportunities for Kao to expand its presence in the country,” he remarked.
“From a global perspective, Kao’s business outside Japan accounts for about 45 percent of its total sales,” Nishiguchi noted. “China has always been our most important overseas market, contributing to Kao’s development in the entire Asian market,” said Nishiguchi.
Just a 15-minute drive from Kao’s Shanghai plant is China’s Maqiao Artificial Intelligence (AI) Innovation Experimental Zone, a hub for integrating AI into urban development. The zone has attracted a number of high-tech companies specializing in cutting-edge robotics over the past five years. The industrial robots adopted by Kao’s Shanghai plant in August 2024 was developed by companies within this zone.
Gu said that Kao (China) is steadily promoting the automated, digital and unmanned transformation of its production lines, which is also supported by China’s intelligent manufacturing.
In recent years, Kao (China) has invested tens of millions of yuan in the intelligent transformation of its production lines on an annual basis, continually increasing the localization rate of its technical equipment.
China is taking solid steps to accelerate the development of new quality productivity forces as part of its efforts to promote high-quality development. Nishiguchi sees this as a catalyst for fostering innovation and boosting production efficiency. “While pursuing its own development, the Chinese market has been creating new business models and opportunities. Kao will remain focused on its core strengths, developing new technologies and products to drive our development in China,” he said.
