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What was the most difficult business decision that you’ve had to make?
The acquisition of Bare Escentuals—not because it was such a difficult decision but it was a difficult environment. The financial crisis had just started. We’d started to accelerate our globalization and you had the stock price collapse and then partly rebuilt so every evaluation was difficult to read. Was it cheap, was it not cheap? Nevertheless, we believed that this was really a very good opportunity.
How has that business evolved since the acquisition?
It’s very positive. From a financial point of view, we are above our expectation. It’s also important from a learning perspective. We’ve learned from Bare Escentuals a lot about digital media and Bare Escentuals has gathered a lot of knowledge from us. Just one year after the acquisition, we launched skin care based on Shiseido technology yet developed by the Bare Escentuals team. We’re moving with the Bare Escentuals brand, especially in Japan. In the U.S. we’re moving into more store-based businesses.
How has the earthquake affected business and the consumer psyche in Japan and Japan’s future?
It’s a tremendous tragedy that we all experienced and it reminds me daily how [unpredictable] the whole system is. Life...it can all be turned around in barely two minutes. There’s a strength and resilience in this country and especially as a society. Shiseido is really a part of the fabric of Japanese life. So what Japan has to deal with, Shiseido has to deal with and we are working hard on rebuilding the country together to show the strength of the Japanese character. The unity and self-restraint that the company has and the country has are very important.
It’s not only an issue of the area where the earthquake happened but it’s the sentiment of the whole country. We have to start working so that enjoyment is nothing to be ashamed of. Over the next few months there will be a return back to a normal lifestyle. But what will remain is the experience of going through this crisis, starting to rebuild, and that energy can help infuse a new lifeblood into the country.
Japanese consumer confidence was low before the quake. How long do you think it will take to recover?
I honestly don’t know. We all have to work on that. The good thing is that you see a stronger momentum in the western part of Japan and hopefully that will bring a wave of goodwill and momentum into the east.
Has the earthquake situation impacted your international business?
Not in that big a way. We have a lot of overseas factories and actually most of our products that we sell internationally are produced out of Japan. Safety has become another big topic, so we work very closely with an outside [radiation testing agency] to make sure that our products are safe. We have [Geiger counters] so we can have seamless quality control across the whole supply chain and distribution chain.
How do you see China evolving and how central is that to Shiseido’s overall strategic plan?
China is a very, very important market. We are now 30 years in China. We invested the first 10 years in R&D and education without actually doing business and then we started to do our own business. We started to build up a dedicated Chinese brand, Aupres, developed specifically for the Chinese market and the Chinese beauty approach. The multidimensional aspect of beauty is driven by the kind of breakthrough that Chinese beauty has in Asia and in the world now. You see more catwalk models from China. You see that the actors and actresses are making inroads into Hollywood. We have established a bigger business set up. We have trading and R&D facilities. The whole Chinese business infrastructure becomes much more diverse and stronger.
How complex are Chinese women in their skin care routines? Is it evolving in the direction of the classic Japanese example of the multistep process?
We believe it’s going that way, that the Chinese consumer will have a multistep approach. They are very eye-focused. Eye cream is becoming bigger and bigger. You will have an in-bath usage, because like Japanese women, they have an evening shower or bath routine. So you see a lot of similarities, but because of the size of the country you see differences, some based on climate for example. You have a very dry north and a rather wet south.
What do you do to relax?
I like driving—fast. What I really enjoy is that concentration that you need when you drive fast. It kind of wipes your mind because if you have a certain speed you have to concentrate on the traffic and the road and that basically takes every other kind of thought away and that’s very relaxing. Whenever I can—when I’m in Germany obviously it’s easier [laughs]—I try to drive. Vacation, I like scuba diving and it’s similar as well because you have this environment that is so beautiful and silent but you always have to be aware of the danger. Third, I like to run. I’m not a big runner. But again, this physical fatigue makes me relax.