Kao (4452) Status update summary

Shifting marketing and consumer dynamics in the AI era

• AI is transforming the customer journey, with agentic commerce and AI-driven recommendations now central to purchase decisions.

• The zero-click rate for searches has surged to 66.4%, with AI summarizing and recommending products before consumers visit brand sites, blurring traditional boundaries between awareness, search, purchase, and sharing.

• Trusted quality and scientific evidence are now more important than the volume of reviews for AI-driven brand selection.

• Rapid digitalization and AI proliferation are transforming consumer behavior and corporate marketing.

Scientific marketing and product development principles

• Five principles—social significance, exclusive uniqueness, performance by cost, consumer quality, and marketing—guide product development and form the foundation for enduring brand value.

• Scientific marketing integrates field data through hypothesis, testing, and validation loops to build brand equity and drive consumer loyalty.

• Case studies like Sofina, The Answer, Bioré UV, and Curél illustrate the application of these principles in product launches and global expansion.

• Lean Startup methodologies and rapid PDCA cycles enable efficient market expansion, as seen with Bioré UV's phased launches and strong sales growth outside Japan.

AI-powered marketing innovation and global expansion

• Global Marketing i-Kao visualizes AI recommendations, word-of-mouth penetration, and enables predictive sales analytics, integrating AI tools for recommendation monitoring and consumer insight generation.

• The tool centralizes global data, monitors AI-driven brand recommendations, and manages consumer feedback across markets.

• AI avatars allow hypothesis testing in new markets, accelerating market entry and consumer understanding.

• The platform connects global marketing intelligence digitally, enabling rapid, reproducible scaling of best practices and knowledge sharing across regions.

• The new One Kao approach expands HQ capabilities globally, enhances collaboration, and accelerates growth through the AEMEA DX Marketing Center and shared digital platforms.