Kao’s marketing strategy transformation: Using AI and scientific evidence to strengthen competitiveness and drive skin care business recovery (Goldman Sachs)
Goldman Sachs attended Kao's (4452.T) marketing strategy briefing.
Goldman Sachs attended Kao's (4452.T) marketing strategy briefing. The core change is that Kao plans to use AI-driven recommendation systems and strong scientific evidence (such as dermatology research) to significantly improve its digital marketing efficiency and brand competitiveness. This shows that Kao is shifting from the traditional "advertising investment" model to the compound growth model of "precision marketing + product strength". Goldman Sachs believes that this strategy is particularly critical to improving its bottlenecked skin care business (such as Kanebo/Kanebo). The logic behind it is that AI can optimize customer reach and conversion rates, while strong scientific endorsement can enhance brand trust and build differentiation in the increasingly competitive Japanese and Chinese cosmetics markets. The market may have underestimated the operational efficiency and growth points that AI technology can bring to traditional consumer goods giants. One-sentence conclusion: Kao is reshaping the core competitiveness of its skin care business through "AI digitalization" and "scientific evidence". The strategic shift is expected to drive structural improvement in its revenue and profit margins in the medium to long term. Positive/negative: Positive for Kao (4452.T). The market's concerns about Kao mainly focus on sluggish profits, but the results of its strategic transformation under new management are underpriced. Data verification is required in the future. Catalysts: 1) Kao's upcoming 2Q26 financial report, focusing on changes in marketing expense rates and signs of recovery in the skin care business; 2) user conversion rate data of AI recommendation systems in Japan and China; 3) sales performance of high-end skin care brands (such as SENSAI) in the Chinese market.