The store will be set up next month and will begin to retail the company's premium end cosmetic products, that have until now been distributed in the region via a distributor, by January 2008.
The new development is a strategic move from the company, which is one of the three Japanese cosmetic groups that is challenging the dominant Western companies in the global top ten ranking list.
Industry experts believe that Russia is set to be one of the most profitable markets in Eastern Europe during the run up to 2010.
Euromonitor says that cosmetic and toiletries sales grew by 14 per cent in 2006, making it the fourth fastest growing market in the world.
With a notable upsurge in the level of disposable incomes in the area, premium cosmetic sales have also begun to soar, and with the company putting the focus on its high end products it will no doubt benefit from increased presence in this dynamic market.
However, with many cosmetic companies taking note of the potential in the Russian market, many are beginning to rethink their branding strategies and are making more acquisitions and mergers in order to remain ahead.
Larger multinational cosmetic players such as L'Oreal have have been stressing the importance of developing markets such as Russia for strategy in 2007.
It is competition such as this that has pushed Shiseido to make its overseas business a focus for further development, with the company previously stating that 'the cultivation of the new markets holds increased potential due to economic growth in recent years'.
Domestic businesses in Russia are also beginning to tap into the demand for consumer goods, which has reached significant levels, and are creating beauty lines that attempt to challenge the larger multinationals such as Shiseido.
Camilla Butler of Euromonitor stated, " Local companies have begun finding their feet again in the last few years and are producing innovative products using some of the latest ingredients, Faberlic is a prime example".